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What Goes Down Must Come Up

After Wednesday’s brutal day on America’s major stock markets President Donald can no longer brag about their record highs, but if he wants to attempt a complicated and counter-intuitive argument he can claim some credit for the rosy economic conditions that have caused the recent swoon.
The markets tanked because the Federal Reserve Board now intends to slightly raise the artificially low interest rates that fueled the markets’ record run, which is because by now they’ve successfully brought the economy to below full employment and a potential 4 percent growth rate in the gross domestic product, and for now it’s more worried about an inflation rate that’s slightly outpacing the long-awaited wage increases that have lately occurred. According to the perverse logic of the stock markets, good news is bad news, just as back when high unemployment and low GDP growth were bringing interest rates down and raising the indices up bad news was good news.
All of this damnably good news started shortly after the big financial meltdown of ’08, which was caused by the subprime mortgage social engineering of President Bill Clinton’s administration but came to fruition in the final days of President George W. Bush’s administration. Bush and most of the Democrats and Republicans in Congress — including both both of the party’s presidential nominees — responded with a big bailout of some major banks that annoyed people on both the left and the right, and the Fed started printing money at a rate that alarmed any conservative old enough to remember the hyper-inflation of the ’70s. In retrospect, though, the center-left and center-right compromise seems to have more or less worked.
The economy was already officially out of recession by the time President Barack Obama was elected by a scared-to-death electorate and passed a pork-laden “stimulus package” through the overwhelming Democratic majorities in Congress, and after that a historically slow recovery slogged along on the easy money the Fed was printing. We’re still convinced that Obama’s anti-business regulatory and tax policies slowed the recovery, and that only the Fed’s foolhardy money-printing sustained it, but after a scared-to-death electorate elected a Republican majority in the House of Representatives in the “tea party” wave of ’10 there were no more “stimulus packages” or other major interferences and thus things improved slightly. As much as we still disdain Obama-nomics and hate to give the guy credit for anything, we have to admit that during the last two years of Obama’s presidency the economy was on a clearly upward path.
By the time a scared-to-death-of-something-or-another electorate gave an electoral majority to Trump, the unemployment rate was a respectable 4.8 percent and the GDP was growing at a not-great-but-not-bad 3 percentage points or so. As much as we disdain Trump’s trade wars and attempts to restore the coal-driven and low-tech economy of the ’50s, and as much as we hate to give the guy credit for anything, we also have to admit that economy has been on pretty much the same upward trajectory ever since Trump’s inaugural speech promise that “The American carnage ends right here, right now.” Trump’s exceedingly business-friendly regulatory and tax policies have no doubt helped, and his stupid trade wars and economic nostalgia haven’t yet hurt much, and by now the economy is rolling along at a rate we can’t blame the Fed for applying some slight pressure to the brakes.
Trump is already grousing about it, though, as he’d much rather be bragging about record stock market highs and new land speed records in economic growth and how nobody has ever seen anything like it. As much as we hate to give the guy credit for anything, we have to admit it’s another brilliant political ploy. If your stocks are down it’s because of that damned fellow who’s Chairman of the almighty Fed, that quintessentially quasi-governmental institution that actually runs everything according to all the leading “deep state” conspiracies since the days of President Andrew Jackson, and has nothing to do with Trump, who is surely an innocent bystander and fellow victim.
Trump did in fact appoint Jerome Powell as the chairman of the Fed, and Powell was confirmed by a Republican Senate, but so was Attorney General Jeff Sessions appointed by Trump and confirmed by a Republican Senate, and for now both are suspected conspirators in a “deep state” plots to overthrow Trump. Those smarty-pants know-it-alls at the Fed have a darned convincing case for raising the prime interest rate to a few notches lower than historical norms, tough, and if it keeps the economy chugging along at a optimal if not the-greatest-anyone’s -seen rate without inflation we’re sure Trump will be glad to claim the credit, and boast about how great it could have been if only he had been in charge. At this point the labor market is tight enough that further economic growth will require an increase in immigration, and Trump should also be grateful if the Fed spares him that dilemma.
These days our only interest in the stock market is in the long run, and over that dreary amount of time it’s survived the Great Depression and Stagflation and the Dot.com and subprime bubbles, and it’s even survived Obama and we figure it will probably survive Trump. We give some of the credit to those smarty-pants know-it-alls at the Fed, but most of it to all those anonymous schmucks who get up every morning and go to some office or factory or shopping mall and make the decisions and do the work that keeps our still mostly-free economy slogging along through good times as well as bad times.

— 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