The mainstream press seems obsessed by the harm being done to Americans…by foreigners.
Specifically, it is alleged that the Ruskies interfered and thus tainted the otherwise pristine US presidential elections.
Iran and North Korea may attack on any day. And Mexico and China are stealing jobs and killing the economy.
Here at the Diary, we propose that all these fears be set aside.
Let us breathe the cool December air of quietude and confidence.
With Mr Trump in the White House…Congress in session…the ‘Eye in the Sky’ of 17 spook organisations…three generals at Mr Trump’s right hand…and Janet Yellen and her merry band of crack economists on his left…
…what’s to worry about?
Made in America
It is unlikely that foreigners — no matter how malign or talented — can do worse! Yes, dear reader, our heart swells with patriotic pride. We don’t need no stinkin’ foreigners to destroy the country; we can do it ourselves.
First, there is the GOP tax bill. We are still uncertain as to the details. So are members of Congress, who are waiting for lobbyists to work them out.
But the broad brushstrokes are so obvious, they must be visible from outer space: It is a scam.
Its real effect will be to enable the transfer of trillions of dollars more from the productive economy to the zombies, cronies, and Deep State insiders…leaving slower real economic growth and leaving most people poorer.
Yes, some people will benefit in the short run. But most will suffer as the years pass…as the tax bill will add $1.8 trillion or more to US debt.
Then, with lower tax revenues and rising expenses from 70 million retiring baby boomers, the country will go broke.
Could foreigners do that?
Unh-unh… This is a Made in America disaster.
Going for broke
This first year of the Trump Team was critical. Voters elected a new team because they wanted a new direction. They wanted him to make the crooked straight and the rough smooth.
In their wisdom, perhaps they realised that the country was going off the rails and needed to be set right.
Or maybe they thought Donald J Trump could wrest control of the empire away from Deep State insiders.
Or maybe they just wanted to shake things up.
All three of those goals were OK with us. But only one — the last one — was met. The nation is all shook up. But it is going broke faster than ever. And the Deep State is more in charge than it was under Bush or Obama.
At this point in the business cycle — with supposedly full employment, a red-hot stock market, and more than 3% GDP growth — the feds should be running a surplus. Receipts should be at record highs. Expenses should be low.
Instead, even in the best of times, the feds can’t make ends meet. The shortfall adds to the national debt at the rate of about $75 billion a month. By the end of the year, nearly $1 trillion will have been tacked on.
But who cares?
No one…until the cycle turns. Then we will hear people ask, ‘Who could’ve seen that coming?’
And yet, cycles always turn. That’s why they are called cycles: They go in circles, not in straight lines. Time goes in a straight line. But seasons, markets, fashions, and popular delusions are cyclical.
Business as usual
Prices go down. An economy goes into recession. And when that happens, all the cosy assumptions made to justify the tax bill go out the window and onto the lawn.
At that point, it will be too late. The grain that should have been stored during the fat years will be nowhere to be seen.
Worse, crops for the next seven years have already been sold forward. And then, with the lean years upon them, what can the authorities do?
Borrow and print, of course! That’s what Zimbabwe and Venezuela did.
It worked for them, didn’t it?
Even in the regulatory area, Team Trump has done nothing a malevolent foreigner mightn’t have done.
Mr Trump called financial regulation a ‘disaster’ when he was running for president. He was right.
But now that he is in the White House, he sees things differently: There’s an advantage to having bureaucrats paid by the government protect his crony friends from competition and innovation.
From The Wall Street Journal:
‘Dodd-Frank’s excessive regulation helped cause the historically slow economic growth during the eight Obama years. In correcting for this Treasury should have proposed turning the FSOC [Financial Stability Oversight Council] into a consultative body, at most. Instead, Treasury now says that it intends to use Dodd-Frank’s most potent element even more aggressively than the Obama administration did.’
Yes, dear reader, it’s business as usual. But what a relief it is to know that there are some things we Americans can still do for ourselves.
For Markets & Money