Trump’s Long War with China

August 27, 2019

When will the trade war with China end? No one knows the answer to that question, but the Chinese are likely betting that they can outlast the Trump administration and in the process make the President settle for a non agreement with little impact on China. The Chinese are well aware that President Trump is anxious for a deal, especially since he promised that winning the trade war would be quick and easy and that something approaching a deal needs to be put in place before November, 2020.

What the Chinese know best is that when it comes to wars, military or trade, the United States can be bogged down for years without a clear victory and the loss of national treasure- witness Vietnam and Afghanistan and now tariffs. Trump has little patience for delay and an ego the size of Greenland, but the Chinese have a history of using delaying tactics and half-hearted negotiation schemes with the hope that their adversaries will simply give up and walk away. All Trump has is boasting, false promises and outright lies to bolster his phony claim that a deal is around the corner.

Trump was right that a new trade relationship with China was necessary and that past administrations, Democrat and Republican, had done little to level the playing field and carve out changes in the export-import regime. My guess is that a trade deal that included changes in intellectual property, access to markets, and industrial espionage could have been achieved without creating a climate of uncertainty and instability that now threatens growth in the global economy. But Trump was all about showing his base that he is a tough guy who was going to “fire” the Chinese as if trade and a global economy were a reality television show. While his supporters cheer on his trade posturing, they depend on cheap Chinese clothes, toys, sneakers, electronics and holiday trinkets.

Trump fashions himself as the ultimate deal maker, a tough guy and the father of America First; the Chinese fashion themselves as restrained, resilient in the face of threats, and confident that they are the future of the global economy or to take a phrase out of the Trumpian playbook- China First. Right now I would give the edge to the Chinese.

There are clear signs that US business executives are tiring of the Trump trade war and want a return to the days of market stability and consistent policy. These executives have too much invested in China and its cheap labor to just pack up and leave, no matter what commands come from the White House. So be prepared for a long war with stock market hills and valleys, corporate angst, and an inevitable downturn in the world economy, all of which could have been avoided with less bluster and false promises.

 


What’s Wrong With Being A Billionaire?

February 8, 2019

I think that most Americans would jump at the prospect of becoming a millionaire, especially in the times when so many people are living paycheck to paycheck. But hitting that billionaire mark is just too lofty for many of us. Being a billionaire in this country is certainly an elite club. Forbes magazine calculates the number at 540, a tiny club in a country with somewhere in the neighborhood of 320 million residents. But the real number to remember is that those 540 billionaires have a combined net worth of $2.399 trillion; yes you read it correctly $2.399 trillion.

The $ 2.399 trillion in the pockets of 540 people comes at a time when this country faces enormous income inequality as far too many people are in debt up to their eyeballs and have trouble scrapping the money for minor emergencies.  The Federal Reserve reports that the median American family net worth is $ 80,000, certainly a modest figure. But there are far too many Americans who fall beneath that number. The Institute for Policy Studies states that almost 20% of US households have zero or negative net worth; not surprisingly African- Americans and Latino households make up huge levels of that downward spiral- 30% of African-Americans and 27% of Latino households are in the zero or negative range.

Those 540 billionaires are starting to feel the heat as poll after poll supports policies that chip away at all that wealth and the inequality that accompanies the bulging bank accounts of the super rich. Already the billionaires are whining about increased tax proposals saying it deprives them of their hard earned wealth and will crush the economy. Nowhere is there the admission that the recent Trump/Republican Congress tax cut bill was heavily weighted to further enrich the rich or that stock market schemes like share buybacks have lined the pockets of these billionaires.

Sure most of these billionaires are hard working, savvy risk-takers who are model capitalists. Some of them like Bill Gates and Warren Buffet give away millions and millions of their wealth to noble causes.  But it is not an exaggeration or radical to state that something is wrong with an economic system that creates such inequality and outright poverty. Those middle class people and the African-Americans and Latinos work hard and take risks everyday but don’t get the bonus wealth that too easily comes the way of the billionaires.

There is no way that these calls to somehow end the wealth of the billionaires are realistic; in fact they are a bit wacky. The super rich will fight any confiscatory policies that diminish their status as billionaires and more importantly they have plenty of supporters from both parties in the Congress to derail legislation that ends their unique status. Slowly chipping away at their privileged tax status, giving a real tax boost to the middle class, and funding programs to address those Americans at the low end of the economic ladder seem the best strategy rather than public shaming, idle threats and legislative proposals that are going nowhere. These alternatives are not socialism or radical progressive claptrap but clearly in the tradition of making the American Dream accessible to all our citizens. As the comedian W.C. Fields said years ago, ” A rich man is nothing but a poor man with money.”

 

 


Soaking the Rich

January 25, 2019

It was inevitable that once the Democrats gained control of the House of Representatives and smelled blood in the Republican waters over their affinity for the Mexican wall there would  be an attack on taxes and  the wealth of the super rich. And sure enough that pesky congresswoman, Alexandria Ocasio-Cortez, had the temerity to float the policy prescription of raising the marginal tax rate on income above $ 10 million to 70%. This stab to the heart to millionaires and billionaires was followed by Senator Elizabeth Warren announcing that she will push for a wealth tax of 2% on $ 50 million in assets and a 3% tax on assets of $ 1 billion.

Not surprisingly, these tax proposals have caused the rich to roll into fits of rage with predictions of an economic collapse, a push toward socialism, and the not so subtle charge that these female legislators just don’t know what they are talking about. The fact that for years these plutocrats have been juicing the political system to fill their pockets at the expense of the dying middle class somehow is not of value in the public policy debate.

But what is not part of the angst of the wealthy as the Democrats dare to offer new tax proposals is an unwillingness to find a solution to the grossly unequal distribution of wealth in this country in large part caused by skewed tax benefits, corporate welfare, and an outright refusal to support legislation that slides the wealth meter even slightly in favor of those at lower ends of the income ladder.

Nowhere in the outrage of the super rich is there even the remotest interest in the following:

78% of Americans live paycheck to paycheck, a figure visibly supported by the plight of the 800,000 federal workers caught up in the shutdown.

47% of Americans did not have enough cash on hand to cover emergency expenses such as an unexpected home repair or car breakdown.

1 million Americans are thrust into bankruptcy as a result of unpaid medical bills and 2 million Americans are adversely affected by unpaid medical bills.

Before the millionaires and billionaires moan and groan about the collapse of capitalism if the Ocasio-Cortez or Warren legislative initiatives were to become public policy or Sean Hannity warns that the liberals are taking the United States down the road to Venezuela, let’s start a conversation about why millions of Americans have so little savings, are up to their eyebrows in debt, and have lost confidence in the American Dream.

Somehow I have this gut feeling that the super rich will survive a tax increase, but I know with certainty that the average American will not survive the fact that for years Washington policy makers redistributed wealth to the 1 percent.

 


2018 – If You Think This Year Was A Mess, Wait Until 2019

December 11, 2018

As 2018 comes to a end there are countless reviews of what happened of consequence during the year and where we may be headed in 2019. As is often the case, the review of the past is mostly negative and the future is described as uncertain. So as not to shy away from this exercise of yearly review and prognostication, here is my take on the past and the future.

If politics, governing, leadership and public policy is your passion, 2018 could only make your confidence level take a sharp turn downwards. Almost everyday brings new revelations about presidential misconduct or at the very least presidential incompetence. Democrats and Republicans still can’t get along much less get legislation moving forward. Members of the cabinet are increasingly being shown as crooks and bogus charlatans.  And the media still can’t shake the fake news label, despite being more open and accurate than those in the White House. Not a day goes by when honest and thoughtful Americans wonder whether they live in an emerging authoritarian state or at the very least a very bad dream.

If the economy, jobs, GDP and spending power are your passion, 2018 would likely bring a smile to your face. Americans are on a spending spree ( mostly with credit cards), jobs are plentiful ( despite little real wage growth), data on key indicators show the US leading the major countries of the world ( at least for the time being), and overall consumer confidence is strong ( but could change in a heart beat). 2018 was a “good year” for most Americans, which is why President Trump continues to have a solid approval rate; there is nothing like a upbeat economy to make a president, any president look like a genius.

If values, mood, beliefs, standards, judgment and truth are your passion than 2018 was in crisis mode. There were very disturbing upticks in hate crimes, outright bigotry, shameless lying, a fundamental decline in basic decency, and just plain disinterest in searching for what is real and what is clearly false. The American Dream is under attack; the American Rule of Law is under attack, the American Governing Traditions are under attack, and the American Political Culture is under attack. The old days of cooperation,compromise and consensus have been replaced with gut-wrenching anger.

All in all 2018 gets mixed reviews with a definite lean towards the negative side. If grades are given, probably a C+ or if you were one of the lucky ones to benefit from the upper end tax cut or generous bonuses or job security than perhaps a B-. A mediocre year at best.

Now to 2019. There is not a prognosticator out there who knows where we are headed in the coming year, but there are sufficient signs in the wind to suggest that 2019 will be considerably worse than 2018.

In politics and government the I word will fill the airwaves and office conversations, that is I as in impeachment, indictment, investigations.  Again, not much in the public policy area will get done as Washington and America is consumed by what transpires in the White House. Political divisions will only increase, Twitter storms will increase, charges and counter charges will increase and institutional gridlock will rule the day. The unexpected, the uncertain, the unconstitutional will dominate. A real mess.

In the economy, 2019 could be the year of economic downturn, perhaps a recession.  Growth will stagnate, 401Ks will take a hit, joblessness will creep upwards and income inequality will continue to take the country further and further apart. No one knows where the tariff wars will be headed but one thing is certain, our national debt will climb upwards to the point where we will be putting more of our budget dollars into interest payments rather than toward substantive programs.

As to our national condition, 2019 will only bring uncertainty and disappointment and of course anger, always anger. The confluence of terrible politics and weakening economics can only create a nation of lost Americans who will question where their once great country is headed and whether their personal security and economic future are in grave danger. In short, Not Good.

At this early point the grade for 2019 is a C-, perhaps a D+. As someone who graded thousands, upon thousands of papers, I have been wrong and at the request of the aggrieved student took another look and maybe even made a change. This could also happen as 2019 plays out but right now this country is heading into uncharted territory with only trouble on the horizon.

 

 

 


Democratic Values v.The Forgotten

October 30, 2018

Talk to any critic of President Trump and they will likely say that he has ignored, weakened or destroyed our democratic values – the rule of law, freedom of expression, respect for diversity and inclusion, and a welcoming and humane spirit. Talk to any of his supporters and they will likely say that President Trump has strengthened the economy, put money into the hands of those the liberals have forgotten, taken strong steps to rein in illegal immigration and expanded our military while sending a clear message to the world that the United States is a nation to be reckoned with. Those who detest the President see him as a buffoon who is only out for himself; those who idolize him see the President as someone who speaks the language of those who have had no voice in American politics and are mad as hell.

While the current wave of polarization can be viewed from numerous perspectives, the great divide is really about what we stand for as a nation versus what we have forgotten as a people. A mid-term election of Democrats in the House or perhaps the Senate may temper this divide a tiny bit by checking the White House but it surely is not going to close the deep gap over what we stand for versus what we used to be as a people. In the days before we became divided the middle class acted as the “great stabilizer” as prosperity was spread over a wide spectrum of the populace leading to a general consensus on the American Dream and the commitment to build consensus and centrism in our political life. Today the middle class is in shambles with too many people either outright poor or unable to make it from paycheck to paycheck. Why should these forgotten Americans care about democratic values and proper norms of presidential behavior when they believe the elites don’t care about them or the precariousness of their economic predicament. Throw in a healthy dose of racism or at the very least the perception of unfair advantages for minorities and democratic values mean little to those who wear the Make America Great Again hat.

If there is a resolution of this great divide it is returning to the days when the economic pie was more evenly allocated, when Democrats stood fore square for the working man and woman,  when Republicans remembered that great power requires great responsibility and when we treat all Americans no matter their race, religion, ethnicity and gender characteristics as worthy of respect, decency and equality. That is a tall order and an outcome that unfortunately is years away given the current climate of distrust and hate. It would help if we had calming leaders, political cooperation, less anger and more compromise, and perhaps most of all just plain quiet.

 

 

 

 

 

 

 

 

 

 


Why is Trump Still Popular, It’s Easy

June 5, 2018

Legions of liberals scratch their heads when they see polling data that show President Trump’s approval rate over 40%. Despite the stupid tweets, the lies and exaggerations, the flaunting of the rule of law, the destruction of presidential norms of behavior, blatant corruption, and the embrace of public policies that isolate the United States and pose real dangers to our future as the leader of the free world, Trump trudges on not just with his base but also with independent-minded voters who are unwilling to denounce him and push for his removal from office.

So what’s going on here with the stability of the Trump approval? It is really quite easy. Trump supporters see more money in their paychecks, and some have seen bonuses or small increases in their salaries, jobs are so plentiful that workers can now pick and choose, the stock market despite regular ups and downs is generally on the uptick, inflation is minimal, and areas of the economy once viewed as dead are no longer on life support. As the Democratic strategist James Carvelle reminded Bill Clinton’s staff, ” It’s the economy, stupid.”

Although some in his administration and certainly those among the punditry have called him a “moron” or just plain “dumb”, Trump knows the current state of American political culture – flag waving patriotism, fear of minorities, militarism, disgust with political correctness, support for small town Americana, and hatred of the eastern and California elite. Somehow the Democrats forgot that our political culture can be defined by what the working class believes is what America stands for, not what the New York Times editorializes. Trump has tapped into this working class culture and is not afraid to use it to bludgeon the left. Few people read the Times but they do listen to the President.

Of course having an approval rating in the low 40% range means that somewhere in the 60% range Americans either despise Trump or have serious questions about where he is taking the country. But if liberals are to make any serious dent in that 40% they have to admit there are now two competing political cultures in our country and begin to make efforts to understand the Trump culture and where possible make efforts to offer realistic alternatives.

What does that mean – “realistic alternatives”? In no particular order liberals must tag Trump with the inevitable increases in health care premiums, offer a better package of tax cuts that puts more money in the pockets of working class people, stop making pro-choice the signature position of the left, forget the big cities and take bus rides to rural America for listening tours, show the American public that patriotism means more than the flag,  and last but not least ask Nancy Pelosi to retire.

The challenge of the liberals as they try to compete with Trumpism is like moving a huge aircraft carrier on a different course; for years liberals have forgotten that they were originally the party of the working man and woman and that their support came from the heartland. If the Democrats hold to their old model of politics the blue wave of November 2018 just may fizzle out as the economy hums along. Trump may yet set himself up for self-destruction, but the liberals must change or face their own self-destruction.

 


Trump – Trusting his Gut

March 13, 2018

The State Department is a shell of its former self, there are no ambassadors in key countries in Asia and the Middle East,  economic, domestic and foreign policy advisers in the White House who are level D minds keeps growing, and the lobbying swamp is not being drained but rather is filling up. What this country is left with is a president who now claims that it is better if he just trusts his gut when making important decisions. This is now what the term “unconventional president” has come to mean – play to your base, use Twitter to lash out at opponents, and allow a gigantic ego to control the direction of the country.

Apologists for the President and even some mainstream pundits are beginning to claim that the “unconventional president” is keeping his campaign promises, challenging national and international rules that have gone years without serious review, and playing the tough guy (or madman) in order to Make America Great Again.

But the world works, or a least has worked, since the end of World War II on a foundation of trust, cooperation, consensus, and mutual respect. While the stock market is erratic but upward bound, the economy is strong,  and unemployment is down, there is no doubt that the United States under President Trump has lost influence in the world and is fostering a climate of unilateral protectionism. If Trump’s developed a catch phrase for his ” gut ” policy perspective it would be The World Be Damned ( except Russia).

Following the ” gut ” and damning the world may sound good to those who live in a time long gone and think that policies are best defined as implemented on a foundation of testosterone. But we live in a time when the world is inter-connected, there are multiple powers around the globe, expert analysis and the truth still hold value, and relying on the “gut” is so filled with risk and miscalculation that one wrong move could spell economic, domestic and foreign policy disaster.

Those who support President Trump may feel a rush of energy and revenge when their guy takes on the establishment, but feeling good about ridiculing fake news, that weakling Obama or the globalists at the UN or the World Trade Organization does little to repair the damage to our international influence or reputation. What the “35 percenters” fail to realize is that feeling good is temporary, but losing influence and reputation to other world powers can easily be lasting. There is no doubt that the US is one of the richest country in the world and a major military power, but the US has slipped in so many socio-economic categories and most importantly is no longer as Ronald Reagan said, “that shining city on a hill,” Trusting your ” gut ” does not lead to a “shining city on a hill.”