Cromwell

Trade negotiations with the EU aren’t going well. How could they? Unlike the UK, the EU is a huge market with a large trade surplus with the US; unlike China, it is not an authoritarian and mercantilist entity that can easily impose its will on its citizens.

As you might expect, Trump is threatening much higher tariffs as a result of the deadlock. The EU will, of course, retaliate, and things will go downhill from there until the markets and the polls threaten Trump the way they did with China.

My real fear here is that Trump will take out his frustrations on Ukraine. The EU is determined to keep Ukraine safe and sovereign; can Trump resist the temptation to use Ukrainian independence for leverage in the trade talks?

Probably not, if history is any guide, which it usually is.

Trump wants to change the name of Veterans Day to “Victory in World War I Day” in order to emphasize his perception that Americans are winners. With that in mind, and in light of its origins, shouldn’t he also try to change the name of Memorial Day to “Victory in the Civil War Day?”

What, you don’t think the man who thinks American military bases should be named after loser Confederate generals would go for that?

Biden and Trump, in their wildly different ways, were both trying to overcome the worst features of the dollar store economy. Biden was defeated by inflation and the lack of votes in the Senate. Who will be responsible for the failure of the Trump plan?

The bond market, unhappy consumers, uneasy investors, and billions of nasty foreigners who refuse to submit to the Trump regime.

Two things are clear about nationwide injunctions: we don’t have, but need, some reasonable standards regulating them; and whatever they ultimately are, the citizenship issue should qualify for one. This is not a partisan issue. My guess is that the Court will create a test that involves fundamental rights, multiple decisions in favor of plaintiffs, or both.

The 4-4 vote on Oklahoma religious charter schools in the most obnoxious case yet involving state support of Christianity is only a brief reprieve; this issue is bound to come up again in some other red state. Finally, the preliminary decision to empower Trump to fire the members of independent agencies is deeply troubling, and the unprincipled carve-out for the Fed is based purely on politics, not sound legal reasoning. It sounds a lot like the completely unconvincing distinction between abortion and gay marriage in the Dobbs case.

About a week after telling Arab heads of state that America would no longer berate them about human rights, Trump subjected Cyril Ramaphosa to the Zelensky treatment at the White House. His clear intent was to humiliate the leader of a regional power over a bogus issue–the supposed genocide of white farmers in South Africa. What was the point?

To exercise his id and please Musk and the base, I suppose. But consider the larger impact of those TV images. Trump believes in personal diplomacy; what world leader, other than Bibi or MBS, will want to visit the White House after watching that ugly display? And South Africa has never behaved as an American vassal state; how can alienating it improve America’s image in Africa and the rest of the Third World?

J.D. Vance, in an NYT interview with Ross Douthat, says that we will know if the Trump economic plan is successful if we make a significant dent in the current trade deficit. Is he right?

I’ll answer the question with a question. Does it really make sense to say that the trade deficit is a more meaningful measurement of our economic well-being than per capita GDP, the unemployment rate, or the rate of inflation?

If Vance is right, in fact, we should be deliberately trying to generate a large recession, because it would reduce the trade deficit. I somehow doubt the American public would be very enthusiastic about that.

“Forget about the Godly Society. Forget about the most extreme case for the tariffs. We can’t rebuild the society and the economy of the 1950s with tariffs. We won’t have a huge increase in the number of manufacturing jobs. We won’t completely eliminate all of our bilateral trade deficits. That simply isn’t realistic.

But we can move the needle. Tariffs, along with tax cuts and massive deregulation, will create a better climate for investment in this country. Increased investment means more jobs and higher wages. In addition, the deals with our trading partners will increase exports in some fields, such as agriculture. There will be down sides, of course; prices will go up in the short run for American consumers, and it will take some time for the investments to bear fruit. There may be a period of stagflation this year, possibly even extending into 2026. In the long run, however, we will be better off.”

The principal problem with this analysis is that there are several reasons why the investment boom supposedly caused by the tariffs won’t materialize. First of all, since there no public consensus in favor of tariffs, investors will know that the tariffs could disappear when Trump leaves office. Second, Trump’s natural capriciousness means the current uncertainty regarding the purpose and amount of the tariffs will continue throughout his presidency. Third, declining American consumer confidence resulting from the tariffs will make investment less attractive. Fourth, there is no large pool of American skilled workers available at this time to work in the hypothetical new manufacturing plants, and the deportations won’t help. Fifth, the tax cuts mostly maintain the status quo; as such, they won’t encourage much more consumption. They will, however, increase the deficit, which will probably result in higher interest rates. Sixth, the deregulation promised by Trump apparently will be accomplished by legally questionable methods, which means it may never become effective. Finally, there is no guarantee that most of the trade negotiations over the reciprocal tariffs will succeed; if they don’t, the retaliation that is likely to follow could make the tariffs a net negative for exports.

In short, even the more conventional and moderate case for the tariffs isn’t likely to produce positive results.

The Senate has just passed by unanimous vote a bill providing a $25,000 deduction for tips. This legislation will: do nothing for genuinely poor service workers, whose income is already lower than the standard deduction; create confusion as to which occupations are eligible; create an unwarranted distinction between the incomes of service employees and poorly paid workers in other occupations; increase the deficit, to the extent the beneficiaries of the deduction were actually paying taxes; increase the pressure on customers to tip, which is already out of control; encourage owners of service businesses to cut wages of tipped employees; and generate strife between tipped and untipped employees in service businesses.

It just goes to show that legislation which is bipartisan can be stupid and opportunistic, too.

According to an article in Politico, Trump isn’t just opposed to clean energy because he thinks climate change is a Chinese hoax; he has decided the current Chinese lead in the field cannot be overcome, and believes we need to put all of our eggs into the fossil fuel basket.

Understand what that means for the long run. If Trump prevails on this issue, America will become an island of fossil fuels in a sea of clean, inexpensive energy. We will be both politically and economically isolated. We will be giving up millions of existing jobs in clean energy. And, of course, relying on fossil fuels in the face of climate change will result in more extreme weather, property damage, and deaths.

What other big country is putting all of its hopes on an economic asset that will grow less and less valuable in time? That’s right–the one that invaded Ukraine.

Inspired by Trump’s threat to have the Boss investigated for campaign finance violations.

BANNED IN THE USA

(Chorus)

Banned in the USA.

Banned in the USA.

Banned in the USA.

Banned in the USA.

______________

I was born in a deep blue state.

To be a rocker was to be my fate.

Trump came along with his song of hate.

I don’t think that’s what made our country great.

___________

(Chorus)

__________

I did my level best to back the blue.

To save democracy for me and you.

But in the end, we all lost, it’s true.

Now Trump is after me; that’s nothing new.

__________________

(Chorus)

_________________

Trump’s just a bully; we can call his bluff.

We can’t give in to him and all his stuff.

We still can win; it won’t be that tough.

Come on people! Have you had enough!

_____________

Banned in the USA.

Banned in the USA.

Banned in the USA.

I’m a cool rocking daddy in the USA.

__________________

Parody of “Born in the USA” by Bruce Springsteen

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Trump thinks climate change is a Chinese hoax. He is actively hostile to any attempt to prepare for the impacts of more frequent and powerful tropical storms. He wants to dismantle FEMA and return its functions to the states. In addition, he hates Ron DeSantis. What does this mean for a state that is already reeling from soaring insurance costs when the next hurricane hits, which could be as soon as a few months from now?

Nothing good, my friends. The only rays of hope here are that Trump owns property and depends on votes from Florida.

Ross Douthat doesn’t think that Trump has any kind of world view, not even “America First;” instead, to the extent that there is a Trump Doctrine, it is one that revolves purely around making random deals. Is he right?

Not exactly. It is true that making deals is a big part of Trump’s mindset, but so is mercantilism and the imperialism that springs from it. The other thing to remember here is that dealmaking means different things to Trump depending on the identity of the person on the other side. If it is an autocrat that he respects, he will offer terms that, in his eyes, are mutually beneficial; if not, the point of the negotiations will be to establish his dominance over the other party.

Netanyahu’s ultimate objective has always been to manipulate the American president into taking the lead role in a more or less perpetual war with Iran. He has on his side the admiration of large segments of the American right and Trump’s natural sympathy for a nation which, like American Christian nationalists, feels both entitled and surrounded by blind hostility. Will it be enough?

Netanyahu’s religion is alien to Trump. MBS, on the other hand, appeals to his autocratic prejudices, his aesthetic sensibilities, his materialism, and his enthusiasm for making deals. There was a time when MBS would have supported an Iran war, but not now; it would threaten his modernization project. In the end, he is likely to be the more persuasive of the two indispensable men.

We can probably be grateful for that.

Bibi Netanyahu is a religious man. He fervently believes that the Jews are God’s chosen people, and that he has been put on the planet to keep them strong and safe. He is the only person in Israel who can navigate between the shoals of mostly hostile world opinion. He is an indispensable man.

MBS, as far as I know, has few strong religious convictions. He wants to pull his country into the 21st century with the least possible amount of kicking and screaming from the reactionaries who have dominated Saudi politics for decades. He wants to be a modern version of Peter the Great. He is also an indispensable man.

Donald Trump has always argued that “he alone” can save America from crime, illegal immigrants, liberals, woke ideology, and foreigners who pick our pockets every day of the year. The failed assassination attempt undoubtedly increased the intensity of that feeling. He, like Bibi and MBS, is an indispensable man.

So what happens when the interests of these three indispensable men collide? For that, see my next post.

Trump was furiously making deals for the benefit of export-dependent American companies during his Middle East trip. That is part of the job, of course; all presidents do it. But Trump seems to do it with more relish than most.

There are two things to remember here. First of all, just because assisting Boeing is part of the job, that doesn’t mean it is the entire job; helping a few companies make money is no substitute for a coherent vision of foreign affairs. Second, selling farm products, energy, and weapons to foreigners is not going to make America as a whole rich again, let alone bring about the Godly Society.