Cromwell

To Trump, everything—relationships, war, politics, and foreign trade, to name a few–is a zero-sum game with a clear winner and a loser.  That’s why he loves sports so much.

You can expect him to take credit for all of the medals that Americans win in South Korea, and to criticize anyone who looks like a “loser.”  One hopes the athletes will keep a safe distance from him, but that won’t be easy for them, with conservative trolls lurking ominously on social media at home.

He’s just lucky that these are the Winter Olympics, because it would be easy to imagine a replay of what happened on the podium in 1968 in Mexico City if the athletes were largely minorities.

 

One of the most obnoxious things any human being can do is float some outrageous or insulting idea and then walk it back by calling it a “joke.”  Trump does it all the time. He did it again with his suggestion that anyone who didn’t applaud him at the SOTU is a traitor.

I’ve seen the film clip.  He certainly didn’t appear to be joking, and there is no reason to believe that his followers understood it that way.

This is a perfect example of how you can expect him to behave if there is a major war or terrorist attack, and next time, he won’t even pretend to be “joking.”

So the markets have finally reached the conclusion that cutting taxes in a boom will result in inflation and higher interest rates.  Well, duh.

The crash is coming on the heels of an upturn so large that only a prolonged rout can overturn it.  The fairly minor increases in wages, inflation, and interest rates arising from the tax bill to date don’t warrant that kind of a reaction.  In my opinion, however, these will be the enduring impacts of the legislation:

1.  Real estate, particularly in blue states, is going to take a significant hit as the result of higher long-term interest rates and new limitations on deductions.  Due in part to regulatory changes subsequent to the Great Recession, however, we won’t see declines similar to those in 2008.
2.  Wages in services that cannot be automated or offshored (e.g., construction, lawn maintenance, and health care) will increase as long as the labor market remains tight.
3.  Wages in manufacturing, however, mostly will remain flat.  There is no such thing as a tight labor market when you can move your factory to India.  It will take a long time to run out of Indians.
4.  Higher interest rates will make it harder for companies to expand, but they will have enough cash on hand that they can do it without the assistance of banks. The real question is, will they?  Everything I see indicates that the answer is no, due to ongoing weaknesses in aggregate demand driven by demographic changes and the decline of the American middle class, which was not addressed by the tax cut.

In short, in the long run, the tax bill will exacerbate inequality and damage the housing industry, but will do nothing to address the real issues in the American economy.

As I will explain in a subsequent post, the ongoing crash in world markets should, if properly managed, only be a blip.  However, confidence is everything in the markets, and our government’s response will fall to:  a gasbag huckster who ran a bunch of Atlantic City casinos into the ground; a plutocrat with no relevant experience in dealing with these situations; and a completely brand new Fed chairman.

If they succeed in screwing this up, they could turn a forgettable market correction into a big, beautiful bear market and a recession.  It’ll be amazing. Believe me.  Believe me.

You’re probably aware of the ongoing debate about Trump and his authoritarian impulses.  Some people find him a danger to the country; others think he’s too lazy and slipshod to really threaten our institutions.  To me, the two are not mutually exclusive; the real test will come when we face a genuine national crisis, such as a war or a massive terrorist attack.

What’s beyond debate is that he is destroying the public’s faith in institutions which should be, and always have been, nonpartisan.  The judicial system, the MSM, the CIA, the FBI, the DOJ–even the NFL–have come under fire, and Republicans no longer believe in them.  That’s purely on Trump:  he didn’t create the blue/red divide in our country, but he makes it worse every day, and no one ever dreamed of taking on the FBI until now.

The first job of the next president is going to be to restore morale within the government and trust outside it.

So the Super Bowl champs are from Philly.

The oddsmakers look kind of silly.

Nick Foles was just great;

Brady coughed it up late;

The Bud Light folks said “Dilly Dilly.”

Here’s what I would demand:

1.  A path to citizenship for all current illegal aliens.  If it needs to be easier for Dreamers, so be it.

2.  Money for better treatment for refugees at the border.  The current system is a national disgrace.

3.  No decrease in the number of legal immigrants.  Demographically and fiscally speaking, reducing legal immigration makes no sense.

4.  No withdrawal from NAFTA.  No elaboration is required.

Here’s what I would be willing to give up:

1.  Go ahead and build the wall.  Sure, it’s wasteful and stupid, but it doesn’t do that much harm.  Think of it as a big public works program.

2.  Make the legal immigration quotas more skills-oriented.   We have the right to take only the economic refugees that we want.  That would include agricultural workers, for obvious reasons.

3.  More money for enforcement, apart from the wall.  If the system as a whole is fair, there’s nothing wrong with enforcing it.

Will anything like this really happen?  I’m not holding my breath.

Life in the time of Trump.

He hates the FBI.

While he stomps and claims

He’s been defamed,

The story just won’t die.

Republicans won’t do their job

To check and to resist him.

They’ve offered him their strong support.

They’ve chosen to assist him.

That the GOP Congress would enact a huge, regressive tax cut is about the least surprising thing in the world.  What is novel, however, is the clear policy preference for business owners over high wage earners, as manifested in the pass-through provisions of the legislation.

Where did this come from?  I think there are two reasons:

1.  The GOP has genuinely started to believe all that rhetoric about “job creators.”  As a result, the idle rich are seen as being more virtuous than hardworking  high wage earners.

2.  High-earning professionals disproportionately vote for Democrats due to the GOP’s position on science and the culture wars.  The pass-through legislation contains distinctions relative to professions that only make sense if you view them as a reward or punishment for voting patterns.

Naturally, this approach makes the party’s neo-Victorian approach to the poor look like rank hypocrisy.  More on that at a later date.

Trump is, of course, polling very poorly, but he takes consolation in the fact that the stock market is soaring.  He’s not the only reason for that, of course;  markets are going up all over the world.  It would be churlish, however, to suggest that his tax cut and deregulation program didn’t have something to do with it.

The problem is that the stock market is overvalued by most standard historical criteria.  What happens when we have a correction?  Will he feel compelled to overreact in order to deal with the damage to his self-image?  It could easily happen.

On the one hand, the “King of Debt” talks down the dollar in order to boost exports, and his Treasury Secretary did the same thing at Davos last week.  On the other hand, he promotes a tax cut bill that is designed to encourage foreign investment and increase the deficit and interest rates, which will push the value of the dollar up.

I don’t get it.  Do you?

The purpose of the Black Lives Matter movement is to educate individuals and governments about institutional racism in the judicial system and law enforcement and to get the government to do something about it.  Whether you sympathize with the movement or not (I do), you can’t say there is anything illogical about their goals or tactics.

#MeToo is a different matter.  The movement seems to consist primarily of rich and famous women appearing on TV to denounce sexual harassment by rich and powerful men.  Who is the audience for this, and what can it accomplish?  Here are some possibilities:

1.  If the point is to send a message to men who don’t engage in that kind of behavior, it’s irritating and pointless.  As I’ve said previously, I don’t need to be told that sexual harassment is wrong any more than I need to be told that robbing banks is wrong.
2.  If the point is to reform the harassers, chances are that they don’t even recognize themselves as harassers.  That battle needs to be won by affected individuals fighting back in the trenches on a day-to-day basis, not by celebrities wearing pins or flowers on TV.
3.  If the point is to speak to other, similarly-situated women, that is a very small universe, and why inflict the message on everyone else?
4.  If the point is to inspire women who are not rich and famous to fight back against their oppressors, do celebrities really have a right to speak for them?

In my opinion, #MeToo is just about aimlessly blowing off steam.  That’s understandable, but it doesn’t accomplish anything in the long run.

The most appropriate response is, compared to what?  The authoritarian models would be Russia and China.  A few rhetorical questions are in order:

1. Are refugees from Africa and the Middle East lining up to get into either country?
2.  Has economic growth in Russia outstripped the US in recent years?
3.  Do Putin’s military successes in Crimea and Syria somehow make Russia a better place to live?
4.  Do the Russians produce anything that anyone wants to buy except petroleum products?
5.  Are the people of Hong Kong happy about increasing Chinese efforts to control the politics in their city?
6.  Would you like to live in a country that kidnaps citizens of foreign nations and holds them in secrecy?
7.  Would you like to live in a country that severely limits your access to foreign web sites?
8.  Is inequality in China increasing or decreasing?

No, liberal democracy has not failed, particularly relative to the alternatives.  Individual politicians and governments, yes;  the systems themselves, no.

I don’t know what Mueller knows, and he has vastly more experience in this field than I do, so I’m unlikely to second-guess his conclusions, whatever they may be.

Assuming, for purposes of argument, that Trump lets him finish his job, it appears to me that there are four possible outcomes of the investigation:

1.  He has Trump indicted.  This is very unlikely, as no previous special counsel has tried it, regardless of the strength of the evidence.  It is much more likely that the ultimate resolution of any findings of illegality will be left in the hands of Congress.

2.  He writes a one page letter saying there is insufficient evidence to support any charges against Trump.  The public will not be satisfied with this, so I doubt he’ll do it.

3.  He writes a detailed report explaining why, in his opinion, there is insufficient evidence to support any charges against Trump.  In all likelihood, there will be ammunition for both parties in this report.  Obviously, impeachment will not ensue.  The report, if anything, will help the GOP slightly in the election.

4.  He writes a detailed report explaining why, in his opinion, there is adequate evidence to support charges against Trump.  Democrats will cry for his impeachment, but the GOP won’t bite; the foundation has already been established for an argument that Mueller was biased.  The report becomes a huge campaign issue and helps the Democrats.

#3 and #4 are the most likely outcomes.  Neither will result in impeachment, but #4, under the right circumstances, could lead to Trump’s resignation.

We know from experience that there are two kinds of Trump speeches.  The first, “Faux Reagan,” attempts to uplift and unite the country.   These tend to be pretty boring, because he doesn’t have the ability to pull them off:  his words are cliches; he grimaces and scowls instead of smiling; and he inflects at the wrong time.  On a more positive note, however, at least he doesn’t offend anyone, and he talks about the country instead of himself.

The second, “American Fuhrer,” is weird, but compelling.  He paints a dystopian picture of an American rotting away, filled with drugs, violent criminals, and murderous illegal immigrants.  The outside world is filled with sharks, and we have no real friends except Israel.  He alone can fix these problems.

Last night’s speech was predominantly “Faux Reagan,” but there was some “American Fuhrer” thrown in about illegal immigrant crime and North Korea to keep the base happy.  I switched to an NBA game every time he started banging on about some hero in the audience.  Mostly, it was just dull and mildly annoying.

I’m sure his fans will say it was a triumph.