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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

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A Busy and Upset Thursday, for Better and Worse

Thursday was a busy day for us, what with rehearsals for our annual theatrical turn and Kansas State University’s Wildcats pulling off a big upset in the national college basketball tournament and the trash needing to be taken to the curb, which made it hard to keep up with a busier than even usual news day.
The stock markets swooned as a trade war with China broke out, a former Playboy “playmate of the year” gave a lengthy interview about her past adulterous affair with then private citizen Donald Trump, and a national security advisor regarded as one of the steady hands in the White House was replaced with a hothead from Fox News, along with other noteworthy developments.
Candidate Trump ran on a promise to protect certain American industries with punitive tariffs, and President Trump has “tweeted” that “Trade wars are good and easy to win,” and after he fired the steady hand who’d been his economic advisor who’d urged restraint it was no surprise that he announced stiff tariffs on steel and aluminum on $60 billion worth of tariffs on a variety of Chinese goods. Neither was it a surprise when the European Union threatened retaliatory tariffs, nor when China announced them on Thursday, nor when stock markets around the world swooned on the news.
Perhaps the trade war will prove as good and easily won as Trump predicts, but we share all of the stock markets’ doubts. There is no historical precedent for a good and easily won trade war, after all, and they’ve all gone so badly they wound up with everyone losing. For all its faults the free-trading post-World War II global economic brought great prosperity and relative peace to both America and the rest of the world, and despite his salesmanship we can’t see Trump persuading all those other countries to give up their share of the pie.
Although it’s less likely to immediately affect your next 401K statement, the former Playboy “playmate of the year’s” interview with the Cable News Network’s Anderson Cooper was of more than prurient interest. Not that there wasn’t plenty of prurient interest to be had, of course, what with a billionaire playboy and future president doing the nasty with his nudie model girlfriend while his nudie model wife was at home nursing their recently born son, but at this point in the post-President Bill Clinton era even the evangelicals seem rather jaded about that sort of thing. The bigger problem is yet another blow to Trump’s believability, because he’s denying the affair and the former Playboy “playmate of the year” seems by far the more credible of the two.
She’s got notebooks and photographs and hotel receipts and other corroborating evidence of an affair, and her on-camera account of the affair has a verisimilitude no actress can achieve. She freely acknowledges that the adulterous affair was mutually consensual, didn’t describe any of the unwanted groping that Trump has bragged about and numerous women have alleged, said that he was handsome and charming, sadly recalled how he had offered to pay their sexual encounters, and even insisted that she voted from Trump and still supports his presidency. So far she doesn’t seem to have profited from the past affair, and when she credibly says she doesn’t want to hurt Trump we can’t imagine what her motive might be other than to come clean.
Which only adds to the credibility of the pornographic video performer who is also alleging an adulterous affair with Trump right around the same time, and whose interview with the same Anderson Cooper is scheduled to air on Sunday’s episode of the Columbia Broadcast System’s “60 Minutes.” Trump likes to brag about how he drives the news ratings, and our guess is that on Sunday night Cooper and CBS will benefit from that more than he does.
The porn performer’s story has an even more prurient appeal than that centerfold model’s, as it doesn’t have any of the weepy and cliched I-thought-he-loved-me parts and includes salacious details about rolled-up copies of Forbes Magazine with Trump’s picture on the cover. She describes a more transactional relationship where provided what she considered routine sex in exchange for a chance to be a contestant on Trump’s reality show, and although she’s brazenly capitalizing on her notoriety with a “Make America Horny Again” strip club tour her story also has a ring of truth to our ears.
The $130,000 that Trump’s lawyer admits he paid the porno performer just before the election might constitute a violation of campaign finance law, too, which adds to Trump’s already expensive legal bills from the ongoing “Russia thing” and various other matters. Trump has lately been shaking up his legal team, with Washington’s most high-powered attorney declining the offer but a conspiracy theorist from Fox News joining the team, but their task of defending his credibility will be even harder.
The recent shakeups in the administration are also unsettling. The outgoing national security adviser was three star Army general H.R. McMaster, one of the steady hands who offered such sage advice to Trump as “DO NOT CONGRATULATE” in a recent phone call with dubiously reelected Russian dictator Vladimir Putin, which Trump of course rejected, and the incoming national security advisor is John Bolton, who does not strike us as an upgrade. He’s a past United Nations Ambassador and longtime figure in national security circles, but his brusque style seems to have found a better fit at Fox News, where he routinely has urged Trump to follow his natural and nationalist instincts. He’s no more likely to restrain Trump’s impulsive temperament that the Fox News guy who replaced the steady hand economic advisor that warned against a trade war.
On a busier than usual Thursday news cycle, it all adds up a certain unease. It’s a sad state of affairs when a Playboy model and porno performer are more believable than a president, but here we are. The same recklessly impulsive fellow who got himself into those tawdry messes is now waging a global trade war and in charge of preventing the military kind, and he’s firing steady hands and hiring cheerleaders.
On the other hand, rehearsals went well, K-State whipped that snooty Kentucky squad and moves on to its 13th “elite eight” game, and we got the trash out to the curb.

— 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