Bannon is gone. And Priebus. And Spicer. And Scaramucci.
And Donald J Trump?
Reckless, vain, juvenile, untutored, swinish — he was refreshingly blockheaded.
And now, he may be gone, too…tamed by the ‘adults in the room’.
More war, more debt
Yes, the thrill is gone…the spontaneity…the honest lies…and the irrelevant surprises. Mr Trump has been broken.
Kelly, Mattis, McMaster, Cohn and Mnuchin are in charge. But these Pentagon bureaucrats and Wall Street hustlers may be worse than a loose-cannon president.
More dangerous. More sinister. More grasping and ruthless. And not the least bit amusing.
Now we know where this administration is going — more war, more debt, more regulation, more old-fashioned corruption and claptrap.
Direction unchanged, in other words.
And we know what that means, at least for the economy.
Backing up to bring new readers fully into the picture…the problem with America’s economy is the ‘swamp’ of regulations, legislation, and financial obfuscation caused by fake money and financial repression.
It festers with double-dealing. It slithers with politically correct, crackpot ideas. It puts a slime over the entire market system.
Try to march through it and you soon sink into the mud. The Dodd-Frank Act alone added 848 pages to the 39-page Glass-Steagall Act…along with 22,000 pages of additional regulations!
With this kudzu blocking your path, it is hard to set up a new business. (According to the Brookings Institution, more American businesses are dying than being born.) And without new businesses, GDP growth stagnates.
But the ‘swamp’ is no accident. It didn’t ‘just happen’. Instead, it grew as the ‘adults in the room’ realised they could use the power of the government to get what they wanted.
Backing up still further, there are only two ways to get ahead: you make or you take.
You can do a win-win deal with your neighbours — a voluntary deal where both parties expect to come out ahead. People work for each other. They trade with each other. They save and invest their money with each other.
They do unto others…well, you know.
These deals make us richer and better off; that is why we do them.
Some people, however, find it easier to rip off wealth from others rather than earn it for themselves.
Typically, they turn to politics. The government has a monopoly on force. So the overwhelming majority of win-lose deals are done with the connivance of the feds.
As time goes by, the influence of the takers grows — more laws, more regulations, and more programs that reward only the insiders. The government becomes a tool for these people to get what they want — by taking it from the productive, win-win economy.
We saw this process on display on Monday in Donald Trump’s landmark speech on Afghanistan.
Citizen Trump argued for years that meddling in Afghanistan was a ‘waste’ and that we should ‘get out’.
But now things have changed. He is President Trump now. And Donald J Trump’s momma didn’t raise no fool. The POTUS explains:
‘My original instinct was to pull out — and, historically, I like following my instincts. But all of my life, I’ve heard that decisions are much different when you sit behind the desk in the Oval Office.’
That’s right. When you are president, you answer to the Deep State, and not to the people who elected you.
The public creates wealth; the Deep State takes it. The voters elect their president; the Deep State tells him what to do.
In a democracy, the government gets its authority from the citizens; the Deep State doesn’t give a damn. It makes the important decisions.
And so it came to pass that the foreign policy that Mr Trump wanted and the voters chose was cast aside in favour of the policy preferred by the insiders.
Even The Washington Post — the Deep State rag of record — applauded:
‘President Trump offered in his speech on Afghanistan Monday a rare but welcome story of self-correction. His “original instinct,” he said, was “to pull out” of the country, but after studying the issue with his advisers over several months he realized that “the consequences of a rapid exit are both predictable and unacceptable.”
‘That was the right conclusion, and Mr. Trump deserves credit for changing his position in a way that is likely to displease some of his political supporters.’
Gunmen and Goldmen
But why would the Deep State want to continue a war that has been so unproductive?
The answer is simple: it pays.
This is no respectable Second World War-style conflict…and no citizen army that fights it.
Today, the ‘war’ helps the top brass gain perks and power that only a billionaire could have in the productive economy. And crony contractors use it to get bonuses and stock options!
There are two-and-a-half times more crony contractors than actual troops in Afghanistan. Altogether, they’ve already sucked $1 trillion out of the Main Street economy.
This year, they’ll get another roughly $45 billion — more than twice the annual output of the entire Afghan economy.
This is the ‘swamp’ that Donald Trump promised to drain. Alas, it has drained him.
People are neither always bad nor always good, but always subject to influence. Mr Trump — no angel — is now fully under the influence of the devils he brought in…his Gunmen and his Goldmen.
This month, the Gunmen brought the president into line; the Deep State’s foreign wars will continue unchallenged.
Next month, the president will face another test. The money will run out, and the debt ceiling will block more borrowing.
Then, the Goldmen will tell him what to do.
For Markets & Money