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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

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Rainy Days and Mondays

Monday was a gray and rainy day here in the middle of America, with all the right lanes of Wichita’s streets flooding on our drive home from chores, and judging by the news we read in our nice dry office once we arrived home things were desultory all over.
That awful Omarosa Manigault Newman woman was still in the news cycle, which does no good for anybody. She’s the former reality star who got a high-level gig in the White House when her reality show co-star President Donald Trump was elected, but was fired by chief of staff John Kelly and is now described as a “low-life” by Trump because of the tell-book she’s about to publish. On Sunday’s “Meet the Press” she released a surreptitiously recorded tape of Kelly’s heavy-handed firing in the top-secret “Situation Room,” which made everyone involved look bad, and on Monday she released another surreptitiously recorded tape of Trump himself telling her that hated to hear about her firing, which is also embarrassing for all involved. She claims to have further surreptitiously recorded conversations with the president’s daughter and son-in-law and other high-ranking Trump administration officials, which we don’t doubt, and expect it will make all involved look bad.
Back east on Wall Street all the stock market indices were down again, and so far as we can tell that’s mostly because of the Turkish government’s fiscal irresponsibility and general craziness. Due to long-ago Cold War exigencies the increasingly Islamist Turks are full-fledged North Atlantic Treaty Organization members, and although they’re not fully-fledged European Union members they’re a big enough chunk of the western world’s economy that their impending bankruptcy is roiling the global markets. We’d happily blame it all on the once again “Sick Man of Europe,” but in this case Trump has congratulated Turkish President Recep Tayyip Edorgan on his recent promotion to de facto Islamist dictator, and is nonetheless waging war on both Erdogan and America’s democratically-elected leaders, and for now no one looks good in this stock market swoon.
Meanwhile, back in the U.S.A. Trump was meeting with the “Bikers for Trump,” and backing their improbable call for a boycott of Harley-Davidson motorcycles, which has lately been forced to shift some manufacturing to export markets as a result of Trump’s trade wars. The oh-so-polite Washington Post was shocked to notice that some of the self-proclaimed “outlaw bikers” had some pretty sexist patches on their leather and denim jackets, and showed up at the White House on their beloved Harley-Davidson “hogs,” and that also doesn’t make anyone look good.
There’s some good economic news, what with the low unemployment rate and rising wages, but if you look closer there’s a dark cloud inside that silver lining. Job creation has actually slowed since the last 16 months of the hated administration of President Barack Obama, and those long-delayed increases in wages have thus far been outpaced by a conspicuous uptick in the inflation rate, which in bi small part to do with all those tariffs Trump has imposed. The federal deficit is as high as it was when the evil Democratic triumvirate of Obama and Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi were running things in the aftermath of ’08 financial meltdown, and for now only the Democrats give even a hypocritical damn about it.
Trump’s former campaign manager Paul Manafort is still on federal trial regarding tax evasion and bank fraud charges, too, with Trump’s former deputy campaign manager Roger Stone providing some of the damning testimony so far, and Manafort will soon face another federal trial regarding his failure to register as a foreign agent for a pro-Russian Ukrainian government during the campaign. Federal Bureau of Investigation agent Peter Strzok was fired for his anti-Trump “tweets” to the woman he having an affair with with during the presidential campaign, which gave the pro-Trump media plenty of reason to talk about their version of the real “Russia thing” scandal, but given all the extra-marital scandals and outraged “tweets” from the president that also looks bad for everyone involved.
Worse yet, the damned Democrats seem even crazier. They’ve got self-proclaimed socialists running in various districts, and a lesbian Native American mixed martial artist nominated up in Kansas’ third congressional district, and “antifa” terrorists making the white supremacists look placid during the ongoing race riots popping up around the country, and so far they’re still clinging to that awful Pelosi woman. There’s even talk of nominating a porn star’s lawyer for the presidency, on the grounds that he’s an audacious reality star and “at least he fights,”and that so far he’s gotten the better of  of the president who paid off his client,  and in this day and age it might well prove a winning argument. A sane and centrist Democratic party might stave off disaster long enough for a revived Republican party to set things right, as far as we’re still concerned, but on this gray and cloudy it seems a remote possibility.
The floods are reportedly far worse back in Pennsylvania, where our parents happily lived for a few decades until they returned to Kansas a couple of years ago, and as always we acknowledge that things are tough all over. The local forecast calls for another rainy day today before we get back to another hot and sunny Kansas summer day on Wednesday, and those poor kids who have to start another dreary school day on the unconscionably early next Monday will surely appreciate that. We’ll hold out hope, too, but no one comes out looking good in the end.

— Bud Norman

Happy Fifth of July

The sultry days of summer used to offer some respite from the relentless onslaught of news, but these days there’s no escaping the stuff. On Independence Day no American politician dares to violate the sacrosanct rule against making news, even the gleefully rule-breaking President Donald Trump, but the rest of the world cares less about the Fourth of July and had some cute Thai kids trapped in a cave, allies fulminating about Trump’s trade wars and spats about military spending, adversaries in Russia and North Korea and Syria and elsewhere are celebrating their recent victories, and on this Fifth of July all the desultory domestic news will be back.
The American and global economies are still in pretty good shape, but the American and global stock markets will probably have another down day because of the trade war Trump is intent on waging against the rest of the world. Although we observe that Americans are still generally quite pleasant with one another in their social and commercial interactions, the longstanding arguments about everything from immigration to abortion to abortion are becoming even angrier. The “Russia thing” grinds on, and Trump’s upcoming summit with Russian dictator and suspiciously good pal Vladimir Putin probably won’t put an end to that. Environmental Protection Agency director Scott Pruitt still stands credibly accused of more than a dozen outrageous corruption scandals, even if you approve of his deregulatory zeal, much of which we don’t mind ourselves, and it sure does look like Trump and his family are similarly profiting in previously unaccepted ways from their public service.
Along with everything else it makes for a bleak Fifth of July, but we try to put in in historical context. On the Fifth of July in 1776 our forefathers were embarked on a seven-year war that is still the deadliest in our nation’s history on a per capita basis, and on the Fifth of July in many other years the nation was mired in economic depression and deadly wars and far more heated domestic arguments, but so far America has persevered through it all.
Winning streaks always come to an eventual end, and eventually the American republic will come to the same end as its Greek and Roman models, but after the bratwurst and beer and fireworks and old friendships we enjoyed on the Fourth of July, we’ll start this Fifth of July with more yard work and a hopeful sense that we’ll end before our beloved America does.

— 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

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