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The Art of the Unfinished Deal

Monday’s news was  full of the usual ominous legal developments regarding the “Russia thing,” as well the continuing fallout from President Donald Trump’s petty ongoing feud with the late Arizona Sen. John McCain, but there was also a rare story about actual policy matters. Trump has made some progress in his trade negotiations with Mexico, and naturally he was eager to overstate the accomplishment.
The White House press corps was invited to listen in on a congratulatory phone call between Trump and Mexican President Enrique Pena Nieto, and although there were a few embarrassing moments of silence while the staff scrambled to get the line working, both presidents praised what they’ve agreed to thus far and lavishly praised one another. Nieto also said three times in the brief call that he was hopeful Canada will also join in the agreement, which seemed to annoy Trump, and by the end it was clear that a deal had yet to be sealed.
The good news that a more cautious president would have modestly touted is that Mexico has agreed to new trade rules for automobiles, intellectual property rights and labor regulations. Such tweaks to current North American Free Trade Agreement are likely to keep some car-making jobs in the United States and Mexico rather than Asia, make it harder for foreign competitors to steal corporate America’s innovations, although Trump didn’t make a big deal of it many Mexican workers will get a big raise and safer working conditions.
The bad news that a more honest president would have admitted is that the new rules will likely make your next new car more expensive, China and the rest of the worst thieves of America’s inventions aren’t involved in the deal at all, and that the vast non-automotive sectors of the Mexican economy might take a hard hit that sends more Mexicans heading to the cross the border in search of work. Trump didn’t get the concessions he wanted on various tariffs, and he made concessions to Mexico about the length of time before he could renege on the whole deal and start all over again, but he could have made a case that incremental progress had nonetheless been made.
Trump has an unfortunate tendency to spike the football and do his end zone dance just short of the goal line, however, and on Monday he was boasting a great that’s far from done. As much as Trump hates it, NAFTA is still a ratified-by-the-Senate and backed by the full faith of the American government treaty, and Canada is a signatory to that treaty, and given the current state of relations with both trading partners since Trump’s election working out all the details is bound to be tricky. On December 1 Nieto will turn power over to President-elect Andres Manuel Lopez Obrador, and although Obrador was consulted in the negotiations he won office on a promise to take a harder stand against Trump, so things need to be wrapped up quickly. Canadian Prime Minister Justin Trudeau will also have something to say about it, and so far he’s taken a hard stand in the trade war Trump initiated.
Whatever deal Trump eventually gets will also have to be ratified by the Senate, and the mid-term elections in November could well further complicate that always complicated process.
Still, incremental progress in a long, hard process is an achievement worth noting, and we note that the stock markets were pleased to see a slight lessening of the trade war tensions. It’s not enough to crowed out all the rest of the news, though, and Trump isn’t the sort to make such modest boasts.

— Bud Norman

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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

Doubling Down on a Dumb Trade War

Way back when we were proud to be Republicans, it was largely because of the Grand Old Party’s principled stand for red-in-tooth-and-claw capitalism. When Republican nominee Mitt Romney accused President Barack Obama during a campaign debate of picking the economic winners and losers, and mostly picking the losers, we stood up and cheered. Now the Republicans are obliged to defend President Donald Trump’s protectionist trade war against the rest of the world, and to ignore the fact that he’s picking the economic winners and losers and mostly picking the losers.
On Monday Trump escalated the trade war with China by threatening $200 billion of tariffs on that country’s exports to the United States, his earlier threat of a mere $50 billion of tariffs having failed to force China’s capitulation to his trade demands, and of course China immediately responded with threats of retaliatory tariffs. Of course the stock markets hated the news, and so did everyone else with a basic understanding of the global economy. It’s bad economic policy, has warped America’s foreign policy to the point that North Korea’s nutcase dictator Kim Jong-Un is a an honorable leader much beloved by his starving people and Canada’s democratically elected Prime Minister Justin Trudeau is a weak and dishonest leader who awaits a special place in hell and all of our longtime allies are suspect, and in the long run it will prove bad politics.
Trump’s tariffs on steel and coal imports will surely be popular with people employed in those industries, but it will just as surely be unpopular with people who work in steel- and coal-buying industries, and anyone who buys anything made of steel or powered by coal, and the latter categories are by far a bigger voting bloc. There are also a lot of wheat farmers and airplane-makers who do a brisk trade with China and will surely be chagrined if China decides to buy from Argentina or Airbus, and a large chunk of Trump’s die-hard defenders will eventually notice that their shopping trips to Wal-Mart are suddenly far more expensive. The worst case scenario for a global trade war is the same as the last time a cocky and unprincipled Republican president tried it, which resulted in the Great Depression and eventually World War II, and even Trump will be hard-pressed to spin that outcome to even his most die-hard defenders.
The best-case scenario is harder to imagine. Red-in-tooth-and-claw capitalism has always resulted in the creative destruction of longstanding industries, such as buggy-making and Blockbuster video stores, but it has reliably replaced them with something the public has always found better. China isn’t the reason that coal-mining now employs a mere 50,000 workers in America, which is mainly because of mechanization and nuclear plants and fracking of natural gas and all those windmills along I-35 and other more healthy ways to generate the nation’s energy. We sympathize with those last remaining coal miners, but red-in-tooth-and-claw capitalism might well replace their jobs with something that doesn’t cause black-lung disease and an early death, and in any case they’re a small voting bloc.
Trump seems to believe the best-case scenario is back to the good old days when America mined coal and made all the world’s steel, and that his die hard defenders will prefer that to this high-tech age and what might come next. What might come next might well be far better, though, and we’ll bet on that rather Trump’s global trade war.

— Bud Norman

Feuding with Allies and Adversaries

President Donald Trump is in Singapore today, finishing his final preparations for tomorrow’s high-stakes summit with North Korea’s anti-American and nuclear-armed nutcase dictator. We’re holding out hope that it goes well, but the debacle Trump made of a routine meeting in Canada with six of our most stalwart allies over the weekend is not heartening.
Trump arrived late for the Group of Seven’s annual gathering, was tardy to or skipped altogether several of its planned meetings, and left early with trade wars and “Twitter” spats brewing against the other six nations and complaints that Russia’s anti-American and nuclear-armed nutcase dictator wasn’t invited. He was especially harsh about the host country’s pro-American and democratically elected Prime Minister Justin Trudeau, calling him “weak” and “dishonest” in in a series of “tweets,” and one of his advisors telling the Sunday morning shows that “there’s a special place in hell” for world leaders who dare invoke the wrath of Trump. He even rescinded America’s routine endorsement of the ritual “final communique “these things usually end with, and although Trump boasted that on a scale of zero to ten America’s relationships with it’s most stalwart allies was a solid ten, and blasted the “fake news” for saying otherwise, the world’s stock markets and most other objective observers around the globe will likely agree things did not go well.
America suddenly finds itself in a war of words and tariffs with Canada, of all places. Canada has an annoying tendency to punt on third downs during their football games and hold its news conferences in both English and French, and they can be awfully smug about their single-payer health insurance program, which we don’t want here, but that hardly seems reason to be feuding with its pro-American and democratically-elected Prime Minister at a time when Trump is lavishing praise on the anti-American dictators in North Korea and Russia. Except for that brief “fifty-four-forty or fight” contretemps way back in 1846 the Canadians have been polite and reasonable neighbors, and given that the size of the population and economy of the country is much smaller than America’s we don’t see them as an economic threat to the United States. Trump might well have some legitimate gripes about existing trade policies over soft lumber or dairy products, but those have always been worked out through existing world trade courts and other institutions without any personally insulting “tweets,” and given that Canada has been stalwart ally in nearly every actual war America has ever fought we can well understand why they resent Trump starting a trade war on the grounds of national security concerns.
Trudeau bluntly told the international press, in both English and that annoyingly redundant French, that although the Canadians pride themselves on being polite and reasonable they won’t be “pushed around,” and that he would go to to the trenches in any old trade war that Trump might want to start. The newly-and-dubiously elected populist leader of Italy agreed with Trump about letting Russia back in the former Group of Eight gathering, but he and the other five heads of states all agreed to retaliate against any tariffs Trump might impose. If this is a ten on a zero-to-ten scale of relations with our most stalwart allies, we shudder to think what a zero might look like.
Trump’s die-hard supporters will love it, of course. Over the weekend we talked with one who regards Germany’s previously pro-American and still democratically-elected Chancellor Angela Merkel as America’s most formidable adversary, and is glad that at long last we have a president who stands up to those snooty Europeans. On all the Sunday morning news shows Trump’s spokespeople were talking about Canada “knifing us in the back,” and explaining that it was a brilliant three-dimensional chess move meant to warn that nutcase North Korean dictator that if Trump is so hard on his most stalwart allies they should surely fear what awaits his adversaries. We can’t shake a lingering worry, though, that Trump is instead playing 52-card pick-up with the post-World-War-II order.
We also can’t shake an even scarier worry that this is all somehow personal for Trump, and has little to do with the more important geo-political and economic realities. Until he rode down that escalator in Trump Tower to launch his presidential campaign we never paid much attention to the failed casino-and-strip-club mogul and reality star, but since then we’ve watched him carefully enough to note that he takes things personally, and that he cares little for geo-political and economic reality. All of the other six heads of state in the Group of Seven, including that populist and dubiously-elected Italian, clearly regard Trump as a boorish and uneducated vulgarian intent on disrupting the post-World-War-II international order, and Trump surely knows that they make fun of of him when he’s not around, just like those swells on Manhattan’s social used to do when the vulgar usurper from Queens once showed up at their gatherings,
There’s also no shaking a worry that Trump’s peculiar antipathy to Trudeau is because the Canadian Prime Minister is objectively a more physically-fit and full-haired and handsome fellow than Trump, with bi-lingual skills and far better poll numbers in his homeland since his feud with Trump started, and that Trump can’t stand that. It’s especially worrisome when Trump segues from his Canadian debacle to that hight-stakes summit in Singapore about the Korean peninsula.
Kim Jong Un is several inches shorter than Trump, and even fatter, with just as ridiculous a hair-do, but we don’t expect he’ll be intimidated. He’s got nuclear weapons and inter-contintental ballistic missiles on his side, as well as an imbalance of power of conventional weaponry poised within range of South Korea’s essential-to-the-world-oder capital, and Trump’s trade wars with the more intimidating nuclear power of China haven’t yet yielded the expected negotiating advantage, even if they have enriched the Trump family’s various businesses. The fact that Trump is feuding with America’s most stalwart allies probably doesn’t worry him at all.
Still, we hold out hope.

— Bud Norman

The Avoidable and Inevitable Stock Market Swoon

Monday was another down day on Wall Street, and so far as we can tell there are several reasons for the recent stock market swoons. Part of it just the usual economics, but so far as we can tell the worst of it is some unusually stupid politics.
The seemingly biggest reason is that the Chinese have predictably imposed steep tariffs on many American products in retaliation for President Donald Trump’s unilaterally imposed tariffs on many Chinese products, and it seems a trade war has begun. At the same time, though, Trump is also waging war on some major American businesses, another heavy hitter has come under congressional scrutiny, and the usual economic disruptions are at play.
Trump has “tweeted” that “trade wars are good and easily won,” but the smart money on Wall Street and most sane observers elsewhere strenuously disagree. Trump has also retreated from some of his “tweeted” threats, which has always prompted stock markets rallies, but then he “tweets” another threat, such global economic powers as the European and Union and our neighbors to the north and sound issue retaliatory threats and the stock markets once again swoon. If the cycle continues until the rest of the world meekly accedes to Trump’s demand for American dominance of the global marketplace, we expect it will take a while.
In the meantime, one of the most dynamic sectors of the American economy is facing political problems, which are the worst kind of problems these days. Some of the biggest players in the high-tech industry that keeps coming up with all sorts of world-changing gizmos and gadgets and thingamajigs are now being “tweeted” about and summoned to congressional committees, which is not good for business, and the tech-heavy NASDAQ stock exchange has taken the worst hit lately in the recent downturn.
The on-line retailer Amazon.com has recently surpassed Wal-Mart as the world’s biggest store, and Trump has recently been “tweeting” that it’s a tax cheat which drives Main Street stores out of business and is bankrupting the United States Postal System. Much of that is entirely untrue and the rest quite debatable, but it’s been an undeniable drag on the drag on the company’s stock price, and given its enormous size there’s a big drag on the overall averages. For now there’s not much Trump can do about Amazon or its owner’s other notable property, The Washington Post, other “tweet” about it, what with those pesky constitutional prohibitions against bills of attainder and infringements of freedom of the press, but at least Trump is inflicting quantifiable financial pain on his even-richer nemesis.
The on-line social media giant Facebook has its own similar political problems, but for very different reasons. A web site that became extraordinarily profitable and powerful by allowing people to share videos of their cats and cell phone pictures of the taco they were about to eat and whatever else they had on their minds also wound up disseminating political propaganda from Russian-based “troll farms” through a firm tied to the Trump campaign during the last presidential election, and the resulting headlines have not been good for the company’s once red-hot stock price. All the propaganda was apparently pro-Trump, so Trump hasn’t “tweeted” anything about it, but the Democrats on those pesky congressional investigative committees have at least managed to inflict some quantifiable financial pain of their own. Facebook ended Monday down 16 percent from its recent high, and given its outsized influence that also accounted for much of that broader decline.
The computer chip-making giant Intel also took a huge on news that Apple Computers, another outsized company tech-sector and one of Intel’s biggest customers, is considering making its own computer chips. That’s the sort of business page news you’d expect on any day in the fast-moving and nerve-wrackingly dynamic high tech sector, though, and we’re the sort of red-in-tooth-and-claw capitalists and old-fashioned Republicans who are content to let the marketplace sort that out. As much as we love that old corner store that Mom and Pop once built out of brick and mortar, we equally hate bills of attainder and infringements on a free press, and we’ll let Amazon do whatever the state legislatures and the marketplace allows it do, and we’ll stay on Facebook just to keep apprised about which of our friends have recently divorced, so as to avoid any awkward comments.
Although we’re rapidly growing too old for such economic disruptions, we’ve long since learned to accept them as part of the ebb and flow toward something like progress. As rock-ribbed Republicans and red-in-tooth-and-claw capitalists we’ve long believed that all those sorry-assed consumers at the pay line could choose more wisely than the politicians, and we still resent those darned Democrats for presuming to make better picks of the winners and losers.
Nowadays, though, that seems to make us “Republicans in Name Only” or “cuckservatives” or “globalists,” as both parties have chosen their winners and losers. Steel and aluminum companies seem a good stock bet at the moment, but car makers and beer brewers and any other industries that use steel or aluminum look risky. If you have a stake in any of the several industries China is now slapping tariffs on, you might want to talk to your financial advisor about that. The Democrats can try to deprive all the social media-addled youth of Facebook, but we’d advise them that most of the political content from our friends is annoyingly liberal.
Oddly enough, yet another reason for the current nervousness on Wall Street is that the unemployment rate is currently low by historical standards and the overall economy seems to be doing well, so there’s the ever-present danger that the Federal Reserve Board will raise interest on loans past the virtually free-money rates that have sustained the whole enterprise since that last big crash. Such adjustments are another one of those disquieting disruptions we’ve learned to accept, but otherwise we’d prefer politics just stay out of it.

— Bud Norman

The Pros and Cohns of Protectionism

Even on a Tuesday day when a pornographic video performer called Stormy Daniels filed a lawsuit against President Donald Trump, the departure of National Economic Council director Gary Cohn was the biggest news out of the White House. The frequent comings and goings of Trump administration officials are usually newsworthy only because of the colorful characters involved and the chaotic situation they represent, but in Cohn’s case it could have serious consequences.
Cohn was one of economic advisers who tried to talk Trump out of imposing the steep steel and aluminum tariffs that were announced last week, as well as the rest of the protectionist agenda Trump has proposed, and his resignation suggests that talking Trump out of such cockamamie ideas is beyond his ability. The congressional Republican leadership also tried persuade Trump to reconsider, and although Trump is invoking national security reasons for imposing the tariffs so did his Defense Secretary and Secretary of State, as well as some of most stalwart defenders in the conservative media, so it appears that no one’s up to the task.
Cohn’s continued role in the White House gave faint hope to the free-traders, though, and his exit suggests the fight is over. His resignation wasn’t announced until the stock markets had closed for the day, but we expect the news will be met glumly when they open again today. Except for the aluminum and steel makers and a few other unionized industries hoping for similar protection from foreign competition, pretty much everyone is planning to pay more for aluminum and steel and try to pass the hit along the supply chain and down to the end consumer, steeling themselves for the inevitable retaliatory tariffs on American exports by friends and foes alike, and worrying what comes after that.
Cohn and the other sensible administration officials and the congressional Republican leadership and the conservative media defenders should have seen it coming all along, though, as well as all those steel-and-aluminum buying companies and export industries and other critics. Trump made quite clear during his seemingly quixotic campaign that he intended on waging a global trade war, and although he spouted off a lot of crazy talk that no one took seriously he was quite clearly sincere in about this particular threat. He’d been publicly critical of America’s trade with the rest of the world since President Ronald Reagan’s administration, claimed that America had been taken advantage of in every foreign relation since the Marshall Plan of President Harry Truman, and offered himself as the artful dealmaker who alone could set things right. Over the years Trump has been all over the place on abortion and immigration and “transgender rights” and almost anything else in the news — we like to joke that he’s taken more positions than Stormy Daniels — but he has never once wavered from a core conviction that he alone could renegotiate the entire world economy to America’s rightful advantage.
Although an estimable fellow, Cohn was never going to talk Trump out of this delusion. Cohn was always a controversial pick, with critics to both the left and right, and ill-suited to any role in Trump’s reality show. His only previous employer was at the too-big-to-fail Goldman-Sachs investment bank, where he rose through the ranks to a top spot, and the conspiracy theorizing sorts of liberals and conservatives have long noticed that Goldman Sachs has landed a noticeable number of former executives in both Democratic and Republican administrations for an noticeably long time, so that left him vulnerable. The stock markets and other centrist types were slightly reassured that at least Trump honored some of the time-honored presidential traditions, and held out hope Con would restrain Trump’s populist impulses, but a buttoned-down riser-through-the-corporate ranks has never prevailed in any reality show ever aired.
Cohn lasted on the reality show island longer than most of us expected, given all the anti-globalist conspiracy theorists who got a vote in each week’s cliff-hanging exile. He outlasted the defiantly nationalist chief strategist Steve Bannon, oh-so loyal and kinda cute communications director Hope Hicks, onetime establishment whipping boy and later chief of staff Reince Priebus, currently under-indictment former National Security Advisor Mike Flynn, that Omarosa woman who held some job or another before returning to a lesser-rated reality, along with countless others can’t quite recall. We think he did some good along the way, too.
As an observant Jew with universal human values, Cohn reportedly considered resigning after Trump insisted there were some “very fine people” marching alongside the neo-Nazis at a deadly rally in Virginia, and although he stayed on he helped fuel the public’s indignation. By sticking around he helped he shape and shepherd trough the Congress a tax bill that so far seems one the best things the Trump administration has done, and he’s also played a role in all the deregulation that has so far worked out well enough. He couldn’t talk Trump out of his crazy trade war, but at least his resignation might spook the stock markets and fuel the public’s indignation and give those congressional Republican leaders and other critics some chance of restraining the president’s populist impulses.
We’ll hope for the best for Cohn and all the rest of us, including that unfortunate visiting Swedish Prime Minister who wound up standing next to Trump during a joint news conference where both the American and Swedish press were asking all sorts of pointed questions about potential trade wars and the ongoing “Russia thing.” The video would have fed all the snarky late comics’ monologues if not for the lawsuit by the porn star, but even those easy and smutty jokes were among the first casualties of the trade war.

— Bud Norman

Steeling Ourselves for a Trade War

The smart money on Wall Street didn’t much like President Donald Trump’s announcement he would be imposing steep tariffs on imports of steel and aluminum, with the Dow dropping 500 points before recovering to end the day with a mere 400 point plunge.  Our own dumb money here on Perry Street in Wichita, Kansas, also didn’t much like it.
Neither did we like it when Trump was running for the Republican nomination for the presidency of the United States on an aggressively protectionist platform, but you know how that turned out. The protectionist racket is always tempting to the populist demagogues of both parties, and although we always prided our Republican selves on the the historical fact that our Grand Old Party has usually been less susceptible to such nonsense we must admit it does succumb from time to time. This time around we think that Trump triumphed in the primaries despite his protectionist policies, not because of them, which makes for some damned complicated politics, and as always we think it’s bad policy.
Which is damned complicated to explain, which makes it all the easier for a populist demagogue from either party to exploit. One can easily see how a 25 percent tariff on foreign steel and a 10 percent tariff on aluminum will bolster the fortunes of American steel and aluminum companies, not to mention their employees, and such a prodigiously glib populist demagogue as Trump can rightly note to his xenophobic followers that all that foreign steel and aluminum is made by foreigners, and that all that domestic steel and aluminum is made is made by Americans. Aluminum-makers don’t have quite the iconic status in American mythology as as those square-jawed and hard-hatted steelmakers in countless folk songs and Works Progress Administration murals, but you throw in wily foreigners and the feckless government negotiators who allowed them steal America’s wealth, and it’s a pretty compelling argument.
For now it’s harder to convince someone of the objective fact that to whatever extent the proposed tariffs benefit the steel-and-aluminum-selling industries they’re going to be just as costly to all the steel-and-aluminum-buying industries. All the official statistics show that domestic steel-and-aluminum-buying industries employ more Americans and make up a bigger share of the economy than steel-and-aluminum-selling ones, as one might expect, and eventually all the final consumers of the suddenly more expensive steel-and-aluminum products will also figure that out, as the smart money on Wall Street seems to have already done.
Not to mention that the rest of the world isn’t going to take Trump’s blustery threats lying down, as all his supine Republican primary opponents eventually did, so of course this mean trade war. All of the countries that Trump is slapping tariffs on can and have already announced that they will impose retaliatory tariffs on the stuff we sell them, as one might expect, and that’s also a bigger chunk of the American economy than steelmaking and aluminum-making. Trump is simultaneously threatening withdrawal from the North American Free Trade agreement, demanding a severe renegotiation our trade treaties with the European Union, has already withdrawn from the Trans-Pacific Partnership without offering any alternative but “America First,” and Wall Street isn’t the only stock-exchanging avenue in the world where they’re feeling jitters about the end of the post-World War II global economic order.
The post-World War II global economic order has worked out pretty good from our Republican perspective here on Perry Street, and even the smart money seems to agree. The global economy has expanded at an unprecedented rate,  all the predicted mass famines and global conflicts and nuclear holocaust have been largely averted, life expectancy rates have soared, and technological and cultural revolutions have provided plenty to do with the spare time. The Yankee dollar is still the word’s reserve currency, which sustains the otherwise unsustainable debt the Republicans are currently racking up, and America retains an economic might that Trump likes to boast about. Countless countries have joined the modern economic and Democratic and middle class world, and it’s hard to see a downside unless you think those wily foreigners stole all that money from us, and are the reason you don’t own a bigger boat of broader-screened television.
A lot of Republicans and Democrats apparently believe that, as they always have, but in the end bad policy is always bad politics. The self-described socialist Vermont Sen. Bernie Sander’s leftward wing of the Democratic fully agrees with Trump’s protectionist policies, but probably by the mid-terms and certainly the next presidential election they’ll be moving toward the center. For now those hated establishment types who crafted the post-World War II economic are reviled by the Trumpian Republican Party, but that also might not last long.
The protectionist racket is only popular so long as  it works, after all, and isn’t really a matter of political ideology or party affiliation. If you’re in an industry that’s vulnerable to foreign competition, you’re for it, and if you do a lot of export business with those wily foreigners you’re against it. Here in the reliably Republican state of Kansas the two biggest chunks of the economy are agriculture and aviation, respectively, which happen to be America’s biggest export industries, respectfully, and although Trump beat the likes of Democratic nominee Hillary Clinton handily in the general election he came in a distant third in the state’s Republican caucus.
Despite his popular vote thumping Trump’s protectionist promises put him over the Electoral College top in such rust-belt states as Michigan and Pennsylvania, which are saddled with industries more in need of protection from foreign competition, but in the end that won’t do him much good. Even in the protectionist states there are more steel-and-aluminum-buyers than steel-and-aluminum sellers, however, and the Democrats there aren’t going to vote for Trump even if he defies the National Rifle Association and brings about a single-payer national health insurance policy. With the smart money on Wall Street abandoning him, and the rest of the post-World War II global economic order retaliating, and economic logic holdings its usual sway, we think he’s already lost this fight.
At least he fights, as we’re sure the die-hard Trump defenders will say.

— Bud Norman

A Good Time to be in Switzerland

President Donald Trump is in Davos, Switzerland to hobnob with all the globalist elites who gather there every year, while back in the states all his nationalist and more working-class fans are fuming about his latest position on illegal immigration. This isn’t likely to last long, but it is a moment worth noting.
On Wednesday night Trump told an impromptu news conference that the “dreamers” who had been illegally brought here as children “had nothing to worry about,” as he jetted off for Switzerland on Thursday morning his staff was announcing a proposal to not only keep some 1.8 million of them here but also offer a path to citizenship, and by Thursday afternoon his usual apologists on right wing talk radio were quite literally screaming their objections. The proposal also included a demand for a $25 billion “trust fund” to to build a big, beautiful wall along the southern border, along with several far more reasonable proposals to curtail illegal immigration, but talk radio talkers and their callers were clearly unimpressed. A mere 25 billion won’t build the kind of sea-to-shining-sea 50-foot-tall and translucent and solar-power-generating wall that Trump vividly described during the campaign, and even the die-hard supporters who never took all that wall stuff literally did believe Trump’s oft-stated campaign assurances that he was going to kick out even the most unwitting and sympathetic illegal immigrants.
That $25 billion for a border if for now  too much ask of the Democrats, who even objected some of the far more reasonable border enforcement measures Trump was demanding, and the negotiations will be tricky. The Democrats are obliged by political reality to protect all those “dreamers” from deportation, and will eventually be obliged to give up something in return to the Republican majorities in both chambers of Congress and the Republican president, but they still hold a strong hand. All the opinion polls show that a vast majority of the country has no stomach for kicking law-abiding and military-serving and college-going semi-citizens out of the country they grew up in, several Republican congresspeople from the soft-hearted Chamber of Commerce wing of the party, and by now even Trump is in full retreat from his hard-hearted campaign trail talk and even talking about his love for the “dreamers.”
Some of those more reasonable border enforcement proposals Trump is proposing also poll well with a populace that is rightly alarmed by the country’s still-high levels of illegal immigration, and we expect the Democrats will eventually relent to most of them, but we doubt they’re quite dumb enough to up cough $25 billion for a border wall. Most of the non-talk-radio media are going to explain the negotiations as the cruel Republicans threatening to kick out a bunch of telegenically sympathetic “dreamers” to build some small portion of a wall that even the president’s chief of staff now admits was oversold on the campaign trail, Trump will be hard-pressed to argue that’s all “fake news,” there are a lot of soft-hearted Chamber of Commerce types of Republicans and all those congressional Republicans whose states and districts abut the southern border who also realize how silly the border wall ideal was all along, and as dumb as those Democrats undeniably are they’re not quite stupid enough to lose this fight.
Meanwhile, Trump was faring better at that fancy-schmantzy gathering of globalist elites in Switzerland. He had an awkward moment sharing a stage with British Prime Minister Theresa, gushing about all the rumors of tension in Anglo-American relations were “fake news” and insisting he and his British counterpart had a mutual admiration society, while she responded with classically British quietude and an apparent relief that Trump has backed out of a visit of her to country, but otherwise it went well. You don’t get to be a globalist elite without being shrewd enough to notice that Trump is highly susceptible to flattery, so most of his fellow hoity-toity hob-nobbers lavished it on, and Trump didn’t shove any prime ministers out of the way or otherwise embarrass himself as he’s done on past on international occasions.
The globalist elitists seem to genuinely like Trump’s tax-cutting and de-regulating agenda, as we generally do, yet they object to all that anti-free trade campaign trail talk he still claims to believe, as we more enthusiastically do, and we expect they’ll gain more concessions from Trump with their flattery than we have with our snarky criticisms. Trump has recently imposed tariffs on washing machines that have had the effect of making American-made washing machines more expensive, but he’s largely abandoned all that campaign trail talk about 45 percent tariffs on anything Chinese, and unless the talk radio-talkers get annoyed about that we’re hopeful that all of Trump’s promised trade wars can be averted.
When he gets back to states Trump will have to answer to all those talk-radio talkers and all those hard-line anti-illegal immigration and nationalist and protectionist Trump voters they speak for, though, and we’ll be interested to see where he winds up. If Trump’s not going to build that wall just to let a bunch of “dreamers” avoid the deportations he promised he’ll lose that 25 percent of the the country that comprises about 50 percent of his support, if he holds firm he’ll further annoy the other 75 percent, and on the whole we guess he’d rather be hobnobbing with all those billionaires in Switzerland.

— Bud Norman

Capitalism and Its Current Respectability

Lately the reports from The New York Times and The Washington Post and the rest of the respectable press have a strange new respect for the old-fashioned Republican sort of free markets economics, which we attribute entirely to president-elect Donald Trump.
Although Trump won’t take office for another five weeks or so, he’s already made news by cajoling the Carrier heating and air conditioning company into keeping 800 jobs that were slated for Mexico in Indiana, “tweeted” the cancellation of an order with Boeing for a new Air Force One fleet over alleged cost overruns, and once again threatened any company that’s considering a foreign work force with a 35 percent tariff. All of which is news that poses a dilemma for the respectable press.
The current operational definition of a respectable press is its instinctive opposition to anything that any Republican might do, and especially Trump, but the president-elect’s unorthodox style of Republicanism is not susceptible to the usual criticisms. Trump’s meddling in Carrier’s affairs is precisely the sort of industrial policy that Democrats have long championed, and although they usually prefer the stick of punitive tax hikes to such carrots as the $7 million in tax abatements that the state of Indiana will offer it’s not enough to hang a scathing critique on. Boeing and the rest of the military-industrial complex are usually cast as the villains, and any attempt to shortchange them is usually cheered. All the tough protectionist talk that got Trump elected isn’t much different from what self-described socialist Vermont Sen. Bernie Sanders eventually forced Democratic nominee Hillary Clinton to embrace.
Compelling arguments against Trump’s policies can only be found on the right, in the free market theories that until recently defined the Republican party’s economic platform, and in its desperation the respectable is suddenly willing to go there. All the stories now feature lengthy explanations of Trump’s inefficient market distortions by economists from such capitalist think-tanks as the Cato Institute and the American Enterprise Institute or the University of Chicago or some similarly red-in-tooth-and-claw economics department, and without the usual characterization’s of “right wing” or mention of any funding they might be receiving from the Koch brothers. They’re the same names that have been in the respectable press’ rolodex the past eight years, quoted briefly in the tenth or eleventh paragraph for the sake of balance, but suddenly they’re showing up right after the lead and getting a chance to rebut the Trumponomics that is now being added for the sake of balance somewhere in the ten or the eleventh paragraph.
We’re glad to see it, being red-in-tooth-and-claw capitalists and no fans of Trump ourselves, but it seems a case of much too little and far too late. The respectable press wasn’t making such a fuss about Trump’s Republican heresies back during the Republican primary, when it might have done some good, and these days the respectable press doesn’t seem to have much influence even with with Democrats. Such disreputable Democrats as the party’s newest congressional leader, New York Sen. Chuck Schumer, have long been the beneficiaries of Trump’s political donations, and they’ve always come through for him in the past, it’s hard to see how they’re suddenly going to be swayed the think-tank theories of a suddenly swept away Republican party to oppose the same sort of tax-abatement-dealing and corporate strong-arming and old-fashioned protectionism they’ve always wanted, and the respectable press will also have a hard time with that news.
The old tried-and-true ideas will surely stick around to denouement, with all the variations from those think tanks and economic departments and the help of such respectably anti-Trump conservative presses as National Review and The Weekly Standard and The Central Standard Times, even if it is eventually relegated to the tenth and eleventh paragraphs. Eventually they’ll get another try. In the meantime we’re glad to see the likes of The New York Times and The Washington Post helping out, however begrudgingly.

— Bud Norman

A Rip-Roarin’ Fight, and No Result

Thursday night’s episode in the Republican presidential mini-series was the most entertaining yet, and for those interested in issues it was also the most informative, but it did little to advance the plot. Everyone did well, everyone took a few blows, and no one scored a clear victory.
Even the bit players did well, although not well enough to matter. Former computer executive Carly Fiorina managed get some attention on the undercard debate with jabs at Democratic candidate Hillary Clinton’s marital problems and rival Republican Donald Trump’s crony style of capitalism, but at this point it seems unlikely to get her back on the main stage. Ohio Gov. John Kasich wasn’t an annoying scold, representing a vast improvement over past debate performances, but that won’t make any difference for a candidate who is far too centrist for the party’s pugnacious mood. Retired neurosurgeon Ben Carson, who was briefly a front-runner in the race, was as always affable and admirable but couldn’t quite overcome the concerns about his policy chops that have caused his drop in the polls. Florida Gov. Jeb Bush, whose calm and presidential demeanor only emphasizes that he is also too centrist for the moment, did well enough to hurt some of the other candidates but not enough to help himself.
There’s still an outside chance of New Jersey Gov. Chris Christie contending for the nomination, what with the first primary being held in friendly New Hampshire, and that chance was probably improved by another strong performance. Being governor of a northeastern blue state has left Christie with some dangerously centrist positions of his own, but he defended his record on guns with vigor and even had a few achievements to cite, and at least his famously pugnacious style suits the fighting mood. Christie also tried to make up for his past literal embrace of President Barack Obama by calling him a “petulant child” for trying to impose gun regulations by executive action, and for the most part he was spared attacks by the others.
That’s probably because at this point the main players are Trump, a real estate mogul and reality television star, Texas Sen. Ted Cruz, and Florida Sen. Marco Rubio, who were mostly saving their jabs for one another.
The first clash came when Trump was asked about his recent insinuations that Cruz’ birth in Canada makes him constitutionally ineligible to become president, a lame reprisal of Trump’s unsuccessful “birther” arguments about Obama, and in his half-hearted stab at the issue Trump carelessly quoted the notoriously left-wing Harvard Law School professor Laurence Tribe. Cruz, who had already done a fine job of jabbing back at a New York Times hit piece over a long-ago loan that he reported on one form but not another, seemed to relish the fight. He shrewdly quoted Trump’s September assurances about his lawyers being satisfied that Cruz is indeed eligible, getting a good laugh by noting that the constitution hadn’t changed since then but the poll numbers have — a point Trump later laughingly conceded — and of course by noting that his former professor Tribe is a notorious leftist. When the former United States Attorney and Texas State Solicitor with a solid winning record in court cases waved off Trump’s suggestion that he take the matter to court, saying “That I won’t be taking legal advice from Donald Trump,” which got another big laugh, only the most died-hard Trump supporter or eastern bloc Olympic judge wouldn’t have scored the round for Cruz.
Trump got some points back when Cruz was asked about his statement that Trump represents “New York values.” Cruz initially got the applause by telling the noisily Republican South Carolina audience that people understand the term, which got a knowing a laugh, and he recalled a past interview when Trump admitted that his positions on a host of social issues are in line with the New York City rather than the Republican consensus, but he didn’t make much the needed clarification that he wasn’t talking about the hard hat worker riding the subway home to the Bronx, but rather the hipsters and university faculties and media grandees and ward-heeling socialists and blow-dried crony capitalists and creepy celebrities and everything else about the city that even those hard hat workers riding the subway home to the Bronx hate. This allowed Trump to speak with an uncharacteristic quietness about the city’s many undeniable virtues, and warm even our hearts by noting that the great William F. Buckley was a New Yorker, and eloquently recall its resilient response to the country’s most deadly terror attack, so even the eastern bloc Olympic judges will give him that round. He also effectively blunted what could have been a pretty good line, because people really do know what Cruz was talking about, so we give him a few extra points as well.
Cruz and Rubio also clashed, with both taking a few blows. At one point Rubio packed an 11-or-12-point litany of attacks at Cruz in a few brief bursts of sound, and even a former national collegiate debate champion such as Cruz couldn’t speed-talk fast enough to answer them all. Cruz later responded with Rubio’s past defection on the all-important issue of illegal immigration, which is pretty much the sole reason Rubio is stuck in third place rather than running away with this race, and once again Rubio had no defense other than mostly ineffective counter-attacks. On the whole, we’d say that Cruz got the better of it but that Rubio showed the aggressive style that Republicans seem to favor.
We note that Rubio used everything from Planned Parenthood to Common Core against Christie, who is widely perceived as his remaining competition as “the establishment candidate,” as if any sane candidate in either party would want that title in this particular election year, and also against Cruz, whose Senate insurgencies have made him as unpopular with the hated establishment as any of the candidates and thus endeared him to the party’s base, but he didn’t seem to have anything to say about Trump. That’s likely because Trump has lately been more concerned with Cruz and thus has had little to say about Rubio, so we credit both with tactical shrewdness, but we would have like to have seen two figuratively if not literally mess one another’s hair a bit.
Trump mostly did well, too. Aside from from the nice rendition of “New York, New York” he scored well with a question about South Carolina Gov. Nikki Haley’s response to the president’s State of the Union address, in which her comments about not heeding the siren call of the angriest voices was widely understood as a criticism of Trump. Haley had already gotten a huge round of applause from her home state audience at the beginning of the debate, and he deftly praised her but admitted that he is indeed angry. An angry nation will surely understand, even if it can’t quite understand what Trump plans to do about it other than hire the best people and make America great again, and by the end of the evening Trump didn’t even seem the angriest man on stage. We think Trump got roughed up pretty well by all the candidates and even the otherwise disinterested and generally very good Fox Business News moderators on his proposal for punitive tariffs on Chinese goods, and trade matters in general, which is supposed to be the master negotiator’s strong point, but we suspect that went unnoticed by the large portion of the audience that was more interested in who got off the best insult.
Happily, though, we notice these debate audiences, if not the audiences at Trump’s rallies, seem to be tiring of his shock jock shtick, and that even he seems to be noticing. We counted three occasions when Trump was roundly booed for either boasting about his popularity or insulting the character of another candidate. After he called Bush a “weak man,” the boos were louder than Bush’s dwindling number of supporters could have possibly generated. On each occasion Trump appeared genuinely chastened, and we think he much preferred the warm applause from his more generous remarks about his hometown and South Carolina’s governor.
All in all, we still have no idea who’s going to win this thing.

–Bud Norman