Tag Archives: trump

Trump and Neocons

Libertarian-leaning pundits are complaining about Trump.

Another Four Years Of Pointless War Under The Trump Administration

On Military and Spending, It’s Trump Versus Trump

Trump Is the Enemy of Neocons, But He’s Not Our Friend

Is McCain Hijacking Trump’s Foreign Policy?

Trump ran (or at least was perceived) as being anti-neocon, and his voters saw him as being a repudiation of ‘politics as usual’ and the back-to-back disappointments of Bush and Obama. But dissonance between voter expectations and Trump’s policies may lead to disillusionment.

How different from neocons are Trump and Bannon really. As the articles above suggest, probably not that much. Trump and neocons agree on defense spending, hawkish foreign policy, closeness with financial industry, deregulation, low taxes, and so on. Trump and necons differ to some degree in terms of immigration and protectionism, but time will tell if Trump implements substantive reform–or if this is all just smoke, mirrors, and ‘symbolic gestures’ that get a lot of media attention but don’t move the needle much. Some say Trump is anti-globalist–I would say he’s doing a good job acting or conveying anti-globalist sentiment; doing is harder.

This is the problem with politics: people equate talk with action, and then decades later wonder why nothing has really changed or keeps getting worse. The purpose of politics is to create the illusion of change.

Also, as many already know, Trump appointed several Wall St. guys to his cabinet, and there may be some dissonance in having to reconcile Trump’s anti-establishment public imagine with his pro-establishment cabinet. For example there is former Goldman COO Gary Cohn, who leads Mr Trump’s National Economic Council. And Steven Mnuchin, a hedge fund millionaire. Trump’s choice of cabinet picks may impede the ability to pass sweeping trade reform, assuming Trump really wants that (it’s hard to know what Trump really wants…he seems to be shooting all over the place…going after immigration on one week; Obamacare and wiretapping on another, etc.).

Trump’s rationale is that he chose appointees whom he knew personally, that are competent enough to carry out their designated jobs, and have private sector experience, versus academia.

The media always exaggerates how high the stakes really are. Contrary to the media and pundit narrative of Trump and neocons being locked in some of sort comic-book-like epic battle to the death, neocons are probably blase to Trump trying to restrict immigration…they are happy just to have more defense spending, lower taxes, and a Republican in the Oval Office instead of a Democrat.

Politics is mostly a waste of time…Every few years, it’s another healthcare bill. And if Trump loses in 2020 or 2024, the dems will undo it and try to reinstate their own healthcare again, ad infinitum. The NRx position is that politics is the problem, not the solution. [1] Politics creates problems that leads to even more politics to try to fix the prior problems created by politics. And this is anther reason why democracy is a waste: so much money and time is wasted undoing changes made by the ‘other’ party, instead just ‘formalizing’ everything. The only guarantees are that healthcare costs will rise and a lot of people will be unhappy, regardless of whose plan is implemented.

Same for the news…another waste of time. Every year it’s the same stories, only the names occasionally change. If the people who normally don’t talk about the news are suddenly talking about the news, then the story is probably important; otherwise, it’s just noise. If you surround yourself with ‘news people’, everything will seem important. People who read celebrity gossip may be ignorant, but they aren’t really missing anything either. The auto-pilot, deterministic American economy and society means minimal individual input is necessary.

Neoconservatism and neoliberalism succeed because they are amorphous, adaptable, and can latch onto or hijack any preexisting ideology or movement. Most governments, given enough time, will resemble something similar to neoconservatism or neoliberalism (this is what Fukuyama alluded to in End of History, but I don’t think it has to be liberal democracy–it can also be a right-wing republic, theocracy, technocracy, or oligarchy. Whatever you call it, the mixed-economy system tends to prevail to varying degrees. It’s not ‘The End of History’, but more like ‘The End of Economics’).

By subscribing to wishful thinking, you willingly deprive yourself of understating. If knowledge is power, you become weaker. This is why the ‘fake news’ movement has been so successful and is hurting the left so badly, because after many decades of the public being fooled, the liberal media’s veneer of ‘impartial, objective journalism’ has been peeled off, revealing the media as an apparatus for liberalism (or what some call the ‘deep state’) that it really is. But we also shouldn’t engage in own versions of fake news.

Trump is not too much different from your typical Republican…he doesn’t have special powers that many ascribe to him, to single-handedly undo decades of history and economics. . Its not defeatism to be realistic about what a president can and can’t reasonably do. Time to stop looking for Messiahs and instead start looking to ourselves for the answers. One solution is minimalism and self-sufficiency, which is why personal finance is important.

[1] It’s a source of confusion for some the differences between the alt-right and NRx. NRx is post-politics, which is why NRx blogs typically don’t follow day-to-day political developments such as Trump, instead focusing on ‘deeper’ topics such as economics, theology, and political philosophy. The alt-right actively engages in politics. The alt-right sees politics as a vehicle for change, which is why they follow politics so intently and also why they have more more ‘faith’ in Trump, versus NRx. NRx seeks to remove the underling fabric that is democratic society; alt-right wants a different type of fabric. NRx and the alt-right agree on many issues, but the NRx approach/implementation to attaining such goals is different.

Grey Notes: Trump is ‘Junk’

According to the bookies, the odds of Trump being impeached or stepping down before the end of his first term are about 50%.

This means you can double your money in four years by taking the opposite side of this bet. This represents an annual compounded return (or yield to maturity) of 19%. Like a bond, Trump being impeached or stepping down is the same as a default. (Specifically, because a betting contract doesn’t pay coupons, it is a zero-coupon bond that trades at 50% below par.) A 5-year junk bond rated ‘C’ or worse typically pays 5% a year. Thus, this bet is like buying a junk bond that expires in 4 years, but the returns are so much higher, making this a something like ‘triple-F’ rated junk bond in the eyes of bookies. Usually, bonds issued by companies that are close to bankruptcy have such high yields. This represents extreme pessimism about the future of the Trump administration.

As mentioned last week, these odds are absurdly high. Trump is not going anywhere, sorry.

Trump Presidency Predictions and Significance: Economics, Immigration, Culture, and Endgame

From Social Matter: Reactionary Political Theory On Contemporary America

Our question is the following: what is the significance of Trump’s victory? What does it mean for the Modern Structure?

To answer the first question: a change in national sentiment. To answer the second, not much.

Trump’s rise definitely ties into a ‘shared narrative’ of a national frustration with the direction of the country, a distrust of elites, and opposition to the ‘status quo’ both in terms of economics and immigration.

But is Trump a legitimate threat? Maybe not so much.

Part 1. Economics & Finance The stock market keeps making new highs…if Trump is supposed to be a threat to the establishment, the market is not buying it. I think the market is correct and that most of this is just saber rattling , although we’ll see. The stock market is a good real-time barometer of the well-being and confidence of financial elites. If elites lose confidence, they will sell stocks and move to treasury bonds, corporate bonds, gold, or cash. ‘Challenging’ the elite is the first part; ‘doing’ is much harder. Elites are used to being challenged, and are also used to getting their way.

Tariffs are not that a big deal and more symbolic than anything, although could be problematic if overdone. Trump’s pledges to keep jobs in America seem seems to involve overly generous subsidies and or corporate welfare that may have unintended/perverse consequences. For example, the Cobra Effect.

Related, a major criticism of the Trump Carrier deal is creates a perverse incentive for companies threaten to outsource more jobs than originally planned, to get subsidies for jobs that they originally had no intent to move.

Trump is a businessman, and businessmen generally don’t like to lose money. Trump (to borrow from Taleb) has a lot of ‘skin in the game’ in that his own personal fortune is closely tied to the overall health of the US economy.

Motivated by self-preservation, I predict Trump will avoid sweeping economic policy that may cause harm both to his own personal wealth and the overall US economy, instead, as Scott noted, focusing on ‘symbolic gestures’ that get a lot of media coverage but on the grand scheme of things don’t move the needle much.

So overall, the finance-elite probably will come out ahead in a Trump administration, barring some sort of major recession or bear market (which may or may not be attributable to Trump).

Part 2. Immigration Regarding immigration, now this is where the ‘elites’ are sightly more scared, although I don’t think they have too much to worry about. Trump’s executive order was a setback, but the 9th Circuit struck it down, so it’s off to the Supreme Court, but the odds don’t look too good:

But given that the Supreme Court currently lacks its ninth member, there a real chance of a 4-4 split on the bench along ideological lines, which would have the effect of affirming the ruling of the 9th Circuit, inflicting a more permanent blow to the new administration.

Even if it passes, there will be too many holes, exemptions, and waivers. And as everyone has already noted, the ‘ban’ does not include the countries that are most responsible for state-sponsored Islamic terrorism, such as Saudi Arabia, Pakistan, UAE, and Egypt. Sunni Islam is the bigger threat, but Trump’s ban mostly targets Shia countries. Also, many instances of Islamic terrorism in America have been perpetrated by second generation immigrants from middle or upper-class backgrounds. From CounterJihad.com A Case Study in Conversion to Terror (UPDATED):

That a first generation of Muslim immigrants is often succeeded by a radical second generation has been documented by Foreign Policy, PBS, and by statisticians in Denmark. The first generation came to America or to Europe for reasons they felt strongly enough to make the move. They understood they were electing to move to a society that was less Islamic, and accepted the trade off. Their children, born in the West, did not experience the realities that made their parents leave the old world. They reject the laws and customs of their new society as being opposed to their Islamic identity. The Danish statistics found that second-generation Muslim immigrants are 218% more inclined to crime than their parents’ generation.

Furthermore, obviously, it doesn’t deal with Mexican immigration, which is what voters specifically had in mind when Trump was campaigning on immigration control. It’s still very early in Trump’s first term, so he has plenty of time to get to that. But given how Trump’s travel ban has been neutered (and was porous to begin with), deportations and restrictions against Mexican immigration similarly faces a major uphill battle. That’s the problem with democracy and progressivism: you can’t undo it. It’s like an escalator: either you get off or keep going up, but you cannot turn back.

So the amnesty-elites are worried, but too soon to call it a defeat for them.

Part 3. Culture wars Given the GOP’s long history of losing ground on culture issues, the prognosis is not good. Trump campaigned as an ‘immigration warrior’, not a ‘culture warrior’, and his past views on these issues is cloudy, such as being pro-choice at one point. He is also indifferent about same-sex marriage, and may or may not try to overturn Roe v. Wade. Many of the people close to Trump and part of his ‘economic circle’ aren’t big on culture issues.

Part 4. Endgame Overall, to reiterate, my expectations for Trump, especially regarding economic policy, are muted. That’s that’s at least for the next 4-8 years. Although I said earlier that progressivism is irreversible, technically things can change, although it will be a marathon, not a sprint.

There are two possibilities of ‘reset’: ‘quick and sudden’ (such as economic collapse, natural disaster, nuclear war, or other crisis) or ‘slow and steady’ (gradual change in sentiment and leadership). The former may not always be the best, if the elites do the rebuilding, which was the case in the 30′s following the Great Depression in which FDR, a major leftist, rose to power and whose reforms far outlasted his four terms. The 2008 financial crisis and 911 also saw the elites rebound to a stronger position than before.

The ‘slow and steady’ approach may be more viable. A notable example was the transformation of the Rome Empire from paganism to Christianity, which unfolded over a 100-year period, from around 300 to 400 AD. Until Constantine’s conversion and legalization of Christianity in 312, Christianity was mostly relegated to the fringes, practiced by only 10% of the Roman population, who feared persecution, in contrast to paganism which dominated. By around 400, paganism was outlawed. Such an ideological transformation can occur in America, and will also take a similarly long time. What is required is that ‘alt right’ politicians (who are more extreme than Trump and don’t care about financial self-preservation) accede and maintain control of the major branches of government long enough to have the Supreme Court replaced and restocked, eventually allowing constitutional amendments to be reversed, and possibly new ones to be added that increases the power executive branch–or-possibly does away with the existing system of government all together. Over 60-100 year timetable, this is possible, although still unlikely. The odds will go up if there are exogenous factors to speed this process

Related to this theme of collapse, check out And then what happens?

A Letter to ‘Trump Haters’

I address this letter to ‘Trump haters’, not ‘Hillary supporters’, because based on personal observations, some of Trump’s biggest detractors also hate Hillary just as much, if not more (for denying Bernie Sanders the nomination, who would have been a better candidate).

Trump’s win has elicited a visceral, almost primal, rebuke from otherwise rational, smart people that I otherwise respect and or even agree with on some certain issues.

From Scott Sumner of Money Illusion:

And Jeff Atwood of Coding Horror:

Brad Delong, who recently did an AMA on Reddit, also voiced a lot of concern over Trump, but at least was far more polite about it, setting a good example of how to criticize specific policy without resorting to ad hominem attacks against Trump and his supporters.

I agree with these anti-Trump economists on certain things–about the US dollar, deficits, the US economy, and about how Peter Schiff and other doom and gloom ‘Austrian alarmists’ tend to be wrong more often than not. By ‘agree’, what I mean is that they are closer to being ‘right’ (or less wrong) even though I may not, personally, like it. Drad Delong is closer to being correct regarding the ‘free trade debate‘ than Vox Day even though I wish Vox Day were right. Rationality and the ‘pursuit of the truth’ means we need to accept the world as it is, not how we want it to be. By better-understanding reality, one can be more fruitful in not only predicting but optimizing the present situation to his or her own advantage. It sounds trite to say, but knowledge (and understanding) really is power. So even though we lie on different points on the political spectrum, we both seek islands of truth and rationality in what is otherwise a sea of media nonsense, misinformation, and sensationalism. That’s the ‘common ground’ here, that we can both agree on.

And we can both agree that Hillary was a lousy candidate who ran an equally lousy, uninspiring campaign that was backed by corporate interests instead of the interests of voters, doing a disservice to both her party and supporters. From Vice.com Why 2016 Seemed Like the Worst Year Ever:

…Hillary Clinton campaigned on the absurd slogan that “America is great because America is good” and was so convinced of her own inevitable coronation as the khaleesi of corporate feminism that she didn’t even bother campaigning in Michigan. Half the electorate stayed home, and a few million useful idiots for a bargain-bin…

Going back to Trump, yes, 2016 sucked for a lot of people. For Sanders supporters (for obvious reason); for myself, other reasons. Many beloved celebrities died. The situation Syria deteriorated. ‘Brexit’ left a lot of people divided, almost literally. We are on this boat together, and although we disagree on specific issues or policy implementation, we can both agree the economic direction of the country for the past decade or two has gone in a direction that, for better or worse, has benefited too few.

Now the compromise: between 2009-2015 Obama did things we ‘The Right’ opposed, but we got through it. More importantly, we didn’t make our opposition too personal (and we will take back the ‘birtherism’ if you can take back the part about Trump being Hitler). And admittedly, Trump can be rough on the edges and uninhibited, but is a departure from the tradition of bland and predictable politics (during the primaries, democrats voted against Hillary for the same reasons republicans voted for Trump).

Trump, in many ways, is the ‘inverse Obama’, embodying ‘hope and change’ for his millions of voters who felt, and justly so, ignored by ‘politics as usual’. Yes, Hillary won the popular vote, but 62,979,879 Americans voted for Trump. ‘Unity’ means bringing everyone above the fold in the ‘national debate’, not just those with whom you agree with. The 2017 Berkeley riots, was, regrettably, a missed opportunity to go in this much-needed direction.

‘Surprisingly Uneventful’

Despite all this ruckus over immigration, I still stand by my earlier prediction that the Trump presidency will be ‘surprisingly uneventful’. All of this commotion will blow over. Silicon Valley is like the 5-6th branch of government (along with the federal reserve, the Ivy League, and Hollywood), given how much influence tech firms are exerting in this immigration debate. Never before has there been so much debate over a singe issue. In a way, this debate is bringing the nation together (in term of everyone discussing the same issue) and is an additional example of how America is the center of not only the economic universe but also the political one.

It seems some on the far-left actually want Trump to be more extreme, if it means weakening the grip of Silicon Valley on the economy and society. They want Peter Theil to not have his Trump cake and be able to eat it too. Some on the left are happy to see that the sainthood of Google is not, after all, immune from the dirty grind of politics. They, the far-left, also want people to stop using Uber. These immigrants, in way, are pawns for the left’s war against Silicon Valley and wealth inequality. Both the ‘left’ and ‘right’ have grievances with Silicon Valley’s tech elite; for the left: wealth inequality, boosting rents and making housing less affordable in certain regions, possible worker exploitation (Apple factory conditions, Amazon warehouse working conditions), ignoring or overlooking data and user privacy concerns, insularity; for the right: pro-immigration (H-1B visas), promotion of liberal and secular cultural values (such as Tim Cook’s outspoken support of gay marriage), and also insularity and elitism.

Recently, Scott Alexander got some push back by some readers because the ‘Muslim ban’ seems to contradict what he wrote in his hugely viral earlier post Are You Still Crying Wolf, in which Scott admonished the media for trying to create a link between Trump and Trump supporters with racists, when no such link existed. Scott is correct to stick with his guns, and that this ban is not evidence of ‘racism’ (a word which in recent decades has since so diluted and all-encompassing as to be practically meaningless anyway). Furthermore, it’s likely to be constitutionally legal. Entry into the US for non-citizens is a privilege, not a right, and under exigent circumstances can be temporarily revoked.

A major concern raised against Scott is that because Trump’s executive order occurred only within the first nine days of his presidency, one can extrapolate that at such a rate things will be considerably worse by his 1460th day, the final week of Trump’s first term. Muslim entry bans today, internment camps tomorrow? As a silver lining for the left, another possibility is that that this executive order is ‘peak awfulness’. Consider 911, which occurred within just the first nine months year of Bush’s first term. Making a similar extrapolation, some expected WW3 and nuclear war by the time Bush left office (assuming the presidency as an institution still existed), but in retrospect 911 was just a outlier – a really bad event that 15 years later hasn’t even remotely come close to being repeated.

But going back to the original point, by ‘surprisingly uneventful’, I mean a boring and uneventful presidency, similar to Obama’s presidency. Both the ‘left’ and the ‘right’ probably need to temper their expectations about Trump. For a presidency to be exciting, the stakes have to be high. The Bush presidency was exiting, as there were two high-stakes issues and one medium-stakes one: 911, the invasion of Iraq (medium), and years later, the financial crisis. Obama continued where Bush left off, but by then most of the heavy lifting had already been done–the financial crisis and bear market ended just months after Obama’s inauguration, and in 2011 Bin Laden was killed (thanks to the intelligence work of the Bush administration). ISIS is problematic, but not as bad as Al-Qaeda, in that ISIS’ targets tend to be overseas, sporadic, and less carefully planned, not domestic. Since the financial crisis ended, the news cycle has been dominated by low or medium-stakes events. WW2 was high-stakes; Syria is low/medium stakes because America as a nation isn’t being threatened, nor at much risk. Trump’s ‘ban’, despite all the leftist outrage, is low-stakes.

Trump Presidency Analysis

A Rising Stock Market Does Not Signal Economic Health

Are we in a stock market bubble? No. Will there be a crash anytime soon? No. Those are just opinions, not facts, but they are no worse than 1000+ word analysis by ‘experts’ who are often wrong all the time. My record, backed by years of blogging here and elsewhere, is almost always right.

The stock market and economy economy is driven primarily by four things: consumption, production, profit & earnings, and innovation. All of those things are doing well: consumer spending is at record highs, S&P 500 profits and earnings are at record highs, there is a lot innovation in Silicon Valley (such as Amazon and Google delivery drones and self-driving cars), and America produces and exports a lot of intellectual property. As far as the stock market and economy is concerned, the importance of GDP growth is overstated. GDP has to be put in the proper context as only a single piece of data in bigger economic picture, which the media often fails to do, treating GDP and employment as the only two pieces of data that matter and ignoring the role of profits & earnings.

The media has pages of content to fill in order to sell advertising. Every year the media proclaims it’s a ‘new paradigm’, because if it weren’t, who would listen to them and click the virus-filled ads next to the story? Clicks are the lifeblood of the news media.

When Presidents Defy Economic Gravity, Gravity Usually Wins

If Mr. Trump really wants to boost manufacturing employment he would figure out how to train workers to fill some of the 334,000 manufacturing jobs that are now vacant. If he doesn’t have the patience for that, he should just raise tariffs across the board. It would hurt consumers and could start a trade war, but at least they’d be transparent.

The problem with job training is it inevitably hits the barriers imposed by biology: age (all else being equal, it’s typicality harder for older people to learn new skills than younger people) and IQ (not everyone can be a coder). And also economic and incentive barriers: there simply may not be any jobs, so no training will help, or the jobs pay so little and or are so difficult and tedious that going on welfare or faking disability is better. Should technology render too may jobs obsolete (should the Luddite Fallacy cease being a fallacy), warehousing may the the only option, whereby the millions of people who are rendered obsolete by technological and economic fores are housed in cheap communal dwellings at taxpayer expense, along with birth control and immigration restrictions, to control population growth.

Something similar happened when Mr. Obama imposed tariffs on Chinese tires in 2009: Chinese imports plummeted while other countries’ jumped. The action saved at most 1,200 jobs, a study by the Peterson Institute for International Economics found, at a cost to consumers of $900,000 per job because of higher prices.

As the passage above shows, tariffs would increase costs, making it harder to fund a post-labor welfare state. It’s better to have cheap goods and higher unemployment under a welfare state than high inflation and overpaid jobs, and also a large welfare state (because tariffs wont create jobs, but actually destroy them.)

Tariffs make everything worse: Tariffs Won’t Bring Back American Jobs – They Will Destroy Them:

According to a study commissioned by the Consuming Industries Trade Action Coalition, steel-users — such as the U.S. auto industry, its suppliers, heavy construction equipment manufacturers and others — were harmed by higher steel prices.

It is estimated that the steel tariffs caused at least 4,500 job losses in no fewer than 16 states, with more than 19,000 jobs lost in California, 16,000 in Texas and about 10,000 each in Ohio, Michigan and Illinois.

But Trump and his staff are not idiots and are not going to ruin the longest uninterrupted bull market and economic expansion ever, by passing tariffs and provoking unnecessary trade wars. Trump will probably focus initially on the tax cuts and defense spending, both which will inflate the economy, inflate the stock market, and energize his base of voters and thus helping his odds of being reelected. Trump needs the economy to not go into recession (the odds are slim, but if it happens, it may doom his re-election). Such spending will also create debt and inflation, but most voters will not notice either. Nominal stock market gains and nominal GDP growth are what matter most, because the media doesn’t differentiate between real growth and nominal growth.

Those who expect Trump to initially enact sweeping border and immigration control and trade policy renegotiation may be disappointed, as I predict Trump will put those issues on the back burner to focus on tax cuts, stimulus, and defense spending. I could be wrong, but what has to be understood is that Trump is virtually guaranteed the nomination in 2020. The only way he could conceivably lose is if the economy fails or the left has a really good candidate. If Trump reneges on immigration and jacks up the national debt even more, neither the left nor the right can use it against him in 2020, being that the left is pro-immigration and also, to a slightly lesser extent, pro-deficit spending. And given that Trump is guaranteed the nomination in 2020, he doesn’t need too toe a hard line on immigration like he did in 2015. By passing a lot of stimulus early in his presidency, he can post good GDP and stock market gains that will help his reelection.

Trump’s policies of handouts and cronyism, should they be enacted, will boost nominal profits and earnings, and hence the stock market, due to inflation. Even if Congress balks on the tariffs and handouts, the tax cuts and defense spending will pass and help the market a lot. If I had to predict, the US economy will see 2-3% YOY GDP growth, which is considered slow or average, but 5-10% YOY earnings expansion and at least a 20-30% rise in the S&P 500 over the next four years.

Trump and the Secretary of State “Brand” Decision

Trump is just a month from assuming office…unless he’s trying to convince Congress, persuasion is less important being that he won. All he needs to do now is not screw things up until reelection. Cabinet picks don’t matter much, and owing to rational ignorance and apathy, most people are unable to name more than two current members of Obama’s cabinet [1] (excluding Biden). Even if he wanted to, Trump can’t mess things up too badly, because the economy and society is becoming increasingly autonomous. Since 2008 or so, we’ve been in an autopilot economy where we’re like automatons just carrying out the motions, as the economy becomes less and less dependent on the actions or input of any one individual, or even politicians. Also, we’re reached a point where the ‘business cycle’ has been mastered or tamed (sorta like a hydrostatic equilibrium that keeps a star intact), meaning far fewer recessions or bear markets in America. The boost-bust cycle has become a permanent protracted boom.

[1] Here are all off them courtesy of Whitehouse.gov:

Department of State
Secretary John Kerry

Department of the Treasury
Secretary Jack Lew

Department of Defense
Secretary Ashton Carter

Department of Justice
Attorney General Loretta E. Lynch

Department of the Interior
Secretary Sally Jewell

Department of Agriculture
Secretary Thomas J. Vilsack

Department of Commerce
Secretary Penny Pritzker

Department of Labor
Secretary Thomas E. Perez

Department of Health and Human Services
Secretary Sylvia Mathews Burwell

Department of Housing and Urban Development
Secretary Julián Castro

Department of Transportation
Secretary Anthony Foxx

Department of Energy
Secretary Ernest Moniz

Department of Education
Secretary John King

Department of Veterans Affairs
Secretary Robert McDonald

Department of Homeland Security
Secretary Jeh Johnson

Trump’s Foreign Policy Milestone

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A few weeks before the 2016 US presidential election, I made two predictions: Trump becoming president would not hurt the US economy and stock market much, contrary to the research ‘reports’ disseminated by the liberal media that predicted a major and immediate recession and possible bear market as a consequence of a Trump victory. I was right.

Second, in my Trump as Nixon article, contrary to the liberal media that warned Trump would hurt foreign relations and diplomatic ties, I predicted that Trump would actually strengthen ties, because foreign leaders actually respect Trump and the masculinity and authority he exudes, whereas they perceive Obama to be an effete pushover, and rightfully so. With the exception of Merkel, who is a bigger leftist than even Obama, any reciprocity between Obama and foreign leaders is staged – the respect isn’t mutual. Obama has to always initiate the dialogue and outreach, not receive it. In the Nioxn article I predicted Trump would not only be more respected than Obama but also open new trade deals and alliances, similar to how Nixon, a republican, was able to break trade barriers with the Communist Party of China.

So far, my second prediction is also coming true, although it’s still early. Trump’s Mexico and China bashing during the campaign was mostly empty threats, like trash talk or a staged wrestling match, and leaders from both sides – after the inauguration and the hype cools down – will get to business working on deals. Contrary to the liberal media, the leadership of China actually supports Trump, and Trump supports China. This is why some pundits like Ann Coulter, perceiving softness on Trump’s part, are already accusing Trump of defecting on his campaign promises. [1]

For example, despite the anti-China rhetoric during the campaign, president Xi Jinping immediately called Trump to congratulate him on his win: Despite fiery campaign rhetoric, Trump reports cordial call with China’s Xi:

“During the call, the leaders established a clear sense of mutual respect for one another, and President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward,” Trump’s transition team said in a statement.

Notably, Xi initiated the exchange whereas in 2008 Obama had to make the call.

Speaking of Nixon, in another diplomatic milestone, the president of Taiwan called Trump to wish him congratulations, breaking decades of silence between leadership of the two countries.

Trump’s transition team said Friday that the President-elect had chatted with Tsai, who passed along her congratulations.

“During the discussion, they noted the close economic, political, and security ties (existing) between Taiwan and the United States. President-elect Trump also congratulated President Tsai on becoming President of Taiwan earlier this year.”

The chat marks the first publicly reported call between a US President or President-elect and the leader of Taiwan since Washington established diplomatic relations with Beijing in 1979, said Bonnie Glaser, a China expert at the Center for Strategic and International Studies.

Again, Trump received the call instead of initiating it. The sensationalist liberal media, not surprisingly, is calling it a foreign policy crisis. Scott Adams is right that this is nothing to worry about. They are trying to deprive Trump of everything Obama cannot take credit for.

Nigel Farage and Putin support Trump, as many already know.

And recently, Trump offered outreach to Pakistani Prime Minister Nawaz Sharif. So much for Trump being a ‘racist’. Liberal media wrong again.

[1] Although some politicians are better than others, what has to be understood is that politics is a game. Campaign promises are not binding legal agreements. And therein lies the difference between the reactionary and the activist – the reactionary knows this, but the activist still clings to the idealism of the ‘democratic political process’ as a means of affecting meaningful change – that if only the ‘right guy’ is elected, everything will be fixed. The activist doesn’t realize that democracy and politics, in and of itself, is the problem, not the the solution. The activist goes on the media circuit and sucks-up in the hope of gaining access to ‘the Beltway’.

‘I don’t think that candidate is who you think he is’

This meme applies to a lot of populists, non-interventionists, and fiscal hawks, who think Trump is one of them:

The tax cuts and defense spending is a shoe-in…border control, wall, deportations, and trade deal renegotiation…much less likely.

Politics is storytelling. Tell people a good story and they will vote for you.

There’s a joke…politicians are like schizophrenics – they have two personalities: one for the campaign and the other after they get into office. The voter has to hope the latter doesn’t diverge too much from the former, but it often does.

Many people think Trump is like Ron Paul – someone who wants balanced budgets, less debt, a small military, and less foreign intervention…after all, Trump was billed during the primaries as a sort of ‘anti-establishment’ figure, in contrast to neocons like G. W. Bush who embody the ‘establishment’. Lost or buried in the sea of MAGA baseball caps, private jets, enthusiasm, and speeches – was his actual plan. Trump is not Ron Paul..not even close. He’s not like Bush either…He’s something different, combining spending with nationalism. Some could call it ‘civil nationalism’ or ‘citizenism’ (or as I describe it, a right-wing FDR).

Vox Day writes:

This is good news. Even the hardcore economic-growth-at-all-costs conservatives are finally beginning to understand that their politics are a non-starter. Moore is smart enough that he’ll likely come around completely before long.

But your ‘god emperor’ wants more economic growth, and will spend to get it.

Or from Oil Price.com: Geopolitical Overhaul: What Will A Post-Obama World Look Like?

Debt reduction, stimulated domestic economic growth and employment, the visible reduction of what is seen internationally as overbearing statism in the U.S. economy, and creative attempts to build a new era of investment in the U.S. will be critical to building back long-term U.S. global capabilities. This would imply a process to reduce U.S. debt creation through the creation of Federal budget surpluses, something which several U.S. administrations until this point have felt disinclined to attempt. Deficit spending by the U.S. Government has been a short-term tool to buy votes, creating a longer-term certainty of economic self-strangulation.

A full four-year term by the Trump Administration spent on achieving stable economic growth would al-most certainly guarantee Pres. Trump a second term in office, but it does not mean that such a domestic focus should represent a return to U.S. isolationism. Quite the contrary, adept management of a growing economy — even in a situation in which stimulus is created by incentivizing domestic investment and pur-chasing — can stimulate the revival of the U.S. as a net exporter of cash (investments).

Did you not read the headlines? Trump wants more spending:

Trump Says He’ll Spend More Than $500 Billion on Infrastructure

Donald Trump: we need more fighter jets, ships and soldiers

Trump calls for military spending increase

Military Experts: Trump Defense Spending Plans Would Break the Budget

I’m like only one of maybe eight people who actually reads this stuff.

Another thing that’s annoying are all these labels to describe a variation of something preexisting. It seems like every year, the ‘new right’ reemerges. How can it keep being ‘new’ every year? Or ‘The base’ vs. ‘The Establishment’. Is Trump The Establishment now that he has won?

These experts think Trump is like clay…to be molded to fit their preexisting beliefs about him, without actually understanding his objectives. It’s just funny…how pundits and experts think ‘voter ignorance’ is something that they are too smart to fall for, but they often are just as vulnerable to it.

Trump stimulus is not important

What Happens When Trump’s Populism Collides with Ryan’s Austerity?

Ryan rejects Trump’s agenda on trade, on immigration, and, not least, on infrastructure. In September, a reporter asked Ryan about Trump’s proposal to spend $550 billion on infrastructure (a more modest version of Bannon’s trillion-dollar fantasy).

The Republican Party is united in name only. In truth, there’s now a Bannon party and a Ryan party.

A battle over infrastructure could be the start of a big, bloody, intraparty war.

The Republican Party is united in name only. In truth, there’s now a Bannon party and a Ryan party. Infrastructure will be an early test of their relative strength—and, quite possibly, of just how complicated and ugly it’s going to get.

In an act of desperation, the media is trying to weave a narrative that there is division among the ‘right’ that threatens to tear apart the Trump presidency, when no so such evidence of division exists. The ‘fake news’ media has to make stuff up, because facts alone will not suffice.

This blog keeps being right over and over, for example in predicting how the purported division among the GOP over Trump during the election and primaries was contrived/manufactured and that the GOP was (and is) solidly behind Trump. [1]

Will Trump backpedal on some stuff? Probably. His ambitions are high, and it’s unlikely he will accomplish all of his campaign objectives (border and immigration control, defense spending, tax cuts, repeal of Obamacare, infrastructure stimulus, and trade deal renegotiation) during his first term.

The alarmist New Republic article makes it seem like the fate of Trump’s presidency hinges on the stimulus plan, when it’s just one objective out of many. The House may block the stimulus, but without hesitation pass the tax cuts, defense spending, and Obamacare repeal. Accomplishing three out of five of the objectives would be a huge success for Trump’s first term.

Trump knows what he’s doing. He came this far and won’t blow it. Trump will prove to be one of the smartest, hardest-working presidents, as shown by his command of the issues during the debates and determination and perseverance during the campaign.

[1]

It’s almost as if Bannon read A ROAD MAP FOR 2016: RESTORING OPTIMISM TO THE GOP, which I wrote in 2013 and advocates taking advantage of America’s reserve currency status and cheap borrowing to fund tax cuts and other pro-growth policy instead of getting bogged down worrying about the debt. I myself thought it was far-fetched, but right-wing Keynesianism may be a success (or at least more successful than left-wing Keynesianism, which never works).

If I were advising Trump I would tell him to actually postpone the infrastructure, tax cuts, and defense spending, because the economy doesn’t need stimulus, and increasing the national debt may backfire during re-election if the economy doesn’t grow fast enough. Save the stimulus as a back-up plan should the economy show signs of recession, but right now the economy doesn’t need it. Given how Bush and Obama boosted spending so much, I imagine some Trump supporters are ambivalent about more stimulus. Instead, Trump should focus on repealing Obamacare, which will reduce spending and is an objective both his voters and House Republicans can easily get behind.

Small Criticisms of Trump’s Economic Platform

Although I am trying to give Trump the benefit of the doubt, there are some problems with his economic vision thus far:

First, Trump is falling into the stimulus trap of creating short-term results at long-term expense: Economist Explains Why Trump Infrastructure Plan Will Be A Disaster For The Economy

Trump’s infrastructure plan is another buy now pay later short-term gimmick that will cost the economy dearly in years to come.

Financial media pundits say that stocks are rising because Trump’s proposals will stimulate the economy, and maybe the economy will be stimulated a little, but stimulus will also create inflation. As of November 9th, the US stock market has gained about 1%, but treasury bonds have lost 3-6% depending on maturity, indicating that Trump’s stimulus may be more inflationary than expansionary. Although some stimulus is more expansionary than others, virtually all stimulus programs create more inflation than growth. The only possible exception were the 2008 bank bailouts, which was more like monetary policy than fiscal policy. Although Trump’s defense and tax cuts will create wealth for some sectors, it may destroy wealth, too, like we have seen with the recent treasury bond rout that has destroyed over a trillion dollars of wealth (a figure that is growing with each passing day as treasury bonds keep falling with no bottom in sight). This trade-off between debt and wealth is explored in more detail in a famous paper by anti-Keynesian economist Robert Barro, Are government bonds net wealth?, which argues that short-term expansion comes at a cost of long-term wealth in the interest paid on the debt.

Trump is like a right-wing version of FDR or Obama – a lot of spending and populism, and the two often go hand in hand. It costs money to make things change, to reverse the massive ocean liner that is analogous to the US economy and government. The funny thing is, every single right-wing pundit since 2008 (such as Peter Schiff) said Obama would cause bond-destroying inflation, but it’s Trump, not Obama, who is causing the sudden concern over inflation. Who would have seen that coming. I didn’t (had I known Trump would cause such knee-jerk bond selling I would have sold my bonds last week and bought them back later). This is another example of why it’s so hard to predict things. A mystery is why left-wing spending (Obamacare, food stamps, etc.) hasn’t hurt the bond market. One possible explanation is that it’s not expansionary. If a stimulus program is perceived as expansionary, it causes the bond market to initially react more negatively than is justified. When the anticipated growth fails to materialize, bonds recover.

Second, if Trump wants to grow the economy, he cannot do it by attacking one of the most important and strongest sectors of the economy, the technology sector. Since 2009, the technology sector has seen the strongest growth of all the major sectors of the S&P 500. Companies like Facebook, Google, and Amazon create billions of dollars of economic value through commerce that passes though their platforms. Trump needs to dial down the anti-technology, anti-monopoly, anti-trade rhetoric, and should make peace with Amazon and Silicon Valley.

Also, as explained above, all this stimulus costs money. Who is going to buy the debt? Foreigners, who own approximately 15% or more of the national debt, will – which is another reason to cool the anti-trade, anti-globalization rhetoric if Trump wants to be a big spender. Also these defense companies depend on exports. It’s almost impossible an isolationist, a protectionist, and a big spender at the same time. Ron Paul and others paleocons know this, choosing protectionism, isolationism, and balanced budgets. But you cannot have all three.