Friday, January 19, 2018

A Tale Of Two Trumps

There are two Donald Trumps, or at least two Trump administrations - the one portrayed in the media and the one actually governing the country.   Confuse the two at your own peril.

I was at a friend's house, and they have fresh copies of "Collusion" and "Fire and Fury" and the discussion was about all of Donald Trump's foibles.   People like to obsess about politics as a hobby, and indulge in conspiracy theories.  A friend of mine tells me half-jokingly than Chandra Levy was murdered so her heart could be taken out and given to Dick Cheney.  I am not sure if he seriously believes this or not - I am too afraid to ask.   These days, I just try to nod and smile when my friends advance wild political theories on the Left or Right.   It doesn't help to try to "correct" their opinions, as I have found out over time.

A reader writes that Trump may very well serve eight years and that people are underestimating him.  And he may be right about that.  From my perspective, his impact on our government and our country goes far beyond what he tweeted last week, or what salacious gossip the Amazon Washington Post and the New York Times breathlessly report on a daily basis.  The appointment of Neil Gorsuch to the Supreme Court will have an impact lasting decades.   And indeed, if Trump appoints one or two more members, it will affect American jurisprudence for the large part of this new Century.

Then there are regulatory changes.  Trump has rescinded a host of Obama-era regulatory changes, and most of these go unnoticed in favor of gossip in the press.   Who is "in" and who is "out" in Trump's inner circle?  How many people have resigned compared to previous administrations?   Stay tuned for the next exciting episode of White House Apprentice!

And I am not the only one to notice this, apparently.  As I noted in The Death of Anti-Trumpism, a columnist for the New York Times (which apparently has transmorgified into a tabloid paper) ponders whether the gossip and intrigue of the Trump White House isn't in fact a smoke-screen designed to throw opponents off the scent:
It’s almost as if there are two White Houses. There’s the Potemkin White House, which we tend to focus on: Trump berserk in front of the TV, the lawyers working the Russian investigation and the press operation. Then there is the Invisible White House that you never hear about, which is getting more effective at managing around the distracted boss. 
I sometimes wonder if the Invisible White House has learned to use the Potemkin White House to deke us while it changes the country.
And he may be right about that.   Democrats and liberals (not the same group, but overlapping) are focused on the trivial while largely ignoring the important.   And they are playing right into the hands of the GOP by staging protests.  Remember it was the protests of the 1960's that brought Nixon into power under the banner of "Law and Order."  The protests at the 1968 Democratic convention were nothing short of idiotic - they did more to help the opposition than anything else.

If the Democratic Party puts up candidates like Oprah Winfrey, Bradley Manning, and non-Democrat Bernie Sanders, we can expect to see four more years of Trump.   And the sad thing is, the same people who follow the gossip-sheet reporting about the Trump White House (and think it is real news) are the same people who think these are serious Democratic alternatives.

Maybe we should let the adults govern, for a change?   Just a weird thought.  The Democratic Party can do better - and should.

Of course, there are some, including my reader, who argue that Trump is not a true Republican, or at least what the Republican party has become in the last few decades.  Trump is a populist, which may be a real conviction or just a smokescreen to get elected.   And it may be possible that Republicans want Trump out more than Democrats do - as a President Pence would be a reliable go-to for their agenda.

From my perspective, though, I don't see it - not entirely, anyway.   Trump makes populist noises, but his administration has pretty much enacted a conservative, Republican agenda, behind the scenes.  Cutting taxes, cutting regulations, appointing conservative judges, and so forth - things that actually change how things work, as opposed to the appearances that the gossip that the New York Times and Washington Post breathlessly report.

The few instances where Trump has actually delivered (or may deliver) on his populist promises, promise to spell trouble for our economy.   The crash of 1929 was caused by a number of factors which are present in today's economy - a euphoria for an overheated market (check), small investors buying into things they don't understand, convinced they will be millionaires overnight (check), decline in farm income (check) and a tariff war that choked off world trade, leading to depression (not yet check).

At the present time, the dollar is at an all time low.  People obsess about the value of the dollar, and some think it is a good thing if it is strong - which depends on whether you are an importer or exporter.  As a citizen, buying crap made in China at Wal-Mart, a strong dollar (and an artificially weak yuan) means your buying power has increased dramatically.   You can fill your shopping cart to overflowing with electronic toys for only a few hundred dollars.   A strong dollar means an imported flat-screen television can be had for a couple hundred bucks - as opposed to a couple thousand it would cost if "made in USA".

But if you are an exporter, the world changes.  When I worked at Carrier, we made huge industrial chillers which were used in high-rise office buildings and other large projects.   At the time, one of our biggest customers was Saudi Arabia (and other Arab countries) looking to spend their newfound oil wealth on air-conditioned shopping malls and high-rise buildings.   A strong dollar made our products less attractive, and made chillers from Siemens and Hitachi more competitive.   The same is true for our nation's greatest exporters - our nation's farmers - who export wheat and corn by the shipload to other parts of the world.  A weak dollar means more profits for them, a strong dollar means bankruptcy.

So, we could be poised for an economic boom.   U.S. oil production is slated to exceed that of Saudi Arabia - for the first time since 1970.   A weak dollar might mean more exports and more companies moving production to the US (which many have, over the last decade, including many foreign companies).   This could all bode well for Trump, unless he starts a trade war.

Most Americans have strong opinions about politics, but have little understanding of the inner workings of the various agencies of the government that actually enact policies.   People say things like, "The Post Office is wasting my taxpayer dollars!" when in fact the most money the Post Office can (or should be) wasting is your stamp dollars as it is a self-funded quasi-independent agency.  People, by and large are idiots - or at least willfully ignorant.

As I noted in another posting, some of these agencies seem quite obscure, but enact policies (under the guidance and often signature of the President) that have far-reaching consequences.  The International Trade Commission, for example, is unknown to most voters, but has two decisions on its plate right now that could drastically affect our economy.   The first, involving solar panels, could result in a tariff so high, it would bankrupt the solar installation industry in the United States (Score, Coal: 1 Solar: 0).   Most solar panels sold in the US are cheaply made in China.   A weak dollar is already making these more expensive to install.   A protectionist tariff could kill off the industry - without creating the corresponding stimulus for domestic production.   If solar panels are too expensive (as they were in the past) they no longer make economic sense.   The current renaissance of solar in the US is fueled by cheap Chinese panels.

The second decision is with regard to Bombardier's new small jet, which Boeing claims is cutting into sales of their much larger 737 aircraft.   Boeing, like the bankrupt US solar manufacturer who brought the ITC action against China, has filed an anti-dumping complaint against Bombardier.   And it appears the ITC will recommend crippling tariffs, which, if Trump signs off on them, will kill off huge orders for the Bombardier plane.   Already, Ottawa is promising reciprocal action - cancelling orders for American warplanes and looking overseas for replacements.

And that is how trade wars start - with tit-for-tat tariffs which escalate to the point where no trade takes place and commerce grinds to a halt, people get laid off, and a recession - if not a depression - sets in.   This was the mold for 1929, thank you very much President Hoover.   But ITC anti-dumping actions are not the only extent of this - cancellation or revision of existing trade agreements could also escalate trade tariff wars.

In the 1960's, the Germans enacted a 20% duty on American chickens.   In retaliation, we slapped a 20% duty on imported light trucks - which is why you don't see many Volkswagen "Transporter" pickups sold in the US after 1963.   They could still sell the beloved passenger "bus" version without tariff, but the pickup or commercial van version was taxed and few were imported as a result.

You don't seem many of these around anymore - or even back in the 1960's, as they fell victim to the "chicken tax."   The passenger "bus" version, however, was exempt.

Sounds ridiculous, but the law is still on the books today.   Ford imports some versions of its "Transit Connect" mini-vans strictly as passenger models, and then removes the passenger seats and rear windows at the port-of-entry to reconfigure them as cargo vans to sell to phone companies and other commercial users - and avoid the 20% tariff.   I had a 1987 Toyota pickup truck which was built in Japan, but whose truck bed and bumpers were added in California, in order to avoid at least part of this tax.   GM is sweating a little bit about its decision to build its new small pickup in Mexico, because if NAFTA is repealed or modified, these trucks will also be subject to this tariff.

Again, consistency is more important than doctrine, when it comes to governing.   If you are going to make changes, at least make them gradually and incrementally.  GM made financial decisions based on one regulatory era, which suddenly make no sense in a new one.  And Republicans - the traditional kind - hate this sort of nonsense.  In fact, despite the populist noises on both sides of the aisle about abolishing free trade, most Republicans (and indeed Democrats) are in favor of it, for the simple reason that it does help expand the economy of not only our country, but others around the world.   Yes, free-trade does mean some jobs will go away, but it also means others are created.   There is a reason the Germans and Japanese have opened up so many factories in the United States - but no one talks about how we are "stealing jobs" from Japan and Germany, are they?

So yes, I think my reader is right, at least in part - Trump isn't really 100% Republican, and that could be the cause of his eventual downfall.  If Trump is to be impeached or forced to resign, it will not be because Democrats force the issue, but because Republicans do so - or better yet allow Democrats to do so.  In fact, the latter is a far better plan, as they can play the victim here and make the Democrats out to be the people who destroyed Trump - who still is popular with a large number of Republicans.

Democrats would be better off focusing on real polices rather than appearances.  Embracing trendy causes du jour might get you in the headlines for a few moments, but doesn't win elections in the long run.  Sadly, as some Democratic legislators are noting, it seems the party or at least some party members, are more interested in grandstanding in order to position themselves for the Presidential election in 2020, rather than winning races down the ballot, particularly in 2018.   Given Trump's low approval ratings, it would appear to be a no-brainer for the Democrats to pick up seats in 2018 and win the White House in 2020.   But sadly, it seems some in the Democratic Party have no brains.

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