How have the first 6 months of the Trump presidency gone? Guess it depends on your perspective.

If you’re a Trump supporter you see great progress. David Gelernter writing in the Wall Street Journal put it this way:

I’d love for him to be a more eloquent, elegant speaker. But if I had to choose between deeds and delivery, it wouldn’t be hard. Many conservative intellectuals insist that Mr. Trump’s wrong policies are what they dislike. So what if he has restarted the large pipeline projects, scrapped many statist regulations, appointed a fine cabinet and a first-rate Supreme Court justice, asked NATO countries to pay what they owe, re-established solid relations with Israel and Saudi Arabia, signaled an inclination to use troops in Afghanistan to win and not merely cover our retreat, led us out of the Paris climate accord, plans to increase military spending (granted, not enough), is trying to get rid of ObamaCare to the extent possible, proposed to lower taxes significantly and revamp immigration policy and enforcement? What has he done lately

No question Trump has done some positive things for the right, but at what future cost? They have a nice originalist judge on the Supreme Court but at the cost reducing Senate confirmation to a simple majority. This leaves it to fate which party actually benefits in the future. Much of the positives cited by Gelernter are executive orders, some  simply  reverse those of Pres. Obama. A wave Democratic victory in 2020 and it all goes away. At first glance the cabinet is a conservative dream.  The question is simply is whether Trump will listen to any of them. The constant undercutting of the members by the President already is costing the group credibility. Maybe this is why the administration is having such a problem filling important open slots. Who likes to work for a boss who doesn’t have your back? Some members have already proven over rated. When he was in the House, Secretary of Health & Human Services Tom Price  was heavily involved in writing their Health Care bill. This embarrassment of Obamacare Light was to provide through cuts the money to underpin the Republican Tax cuts. Now not only are they stuck between a rock and a hard place on health care, tax reform is in real jeopardy. With the Presidency and both Houses, and Republicans have a good chance to go into 2018 without a major legislative victory. Also, let’s not forget Trump also took us out of TPP. The just concluded EU-Japan trade deal prompted the Wall Street Journal to editorialize:

The irony is that the productivity of American manufacturers leads the world, and employment is rebounding. At a moment when U.S. firms could grow their exports, the Trump Administration is burning bridges. The EU-Japan deal is a warning that others will take up trade leadership and capture the prosperity that Americans should enjoy.

Ignored in the rosy picture painted by Trump supporters is the failure to widen the base. Older less educated whites have so far stayed true their man. With educated suburbanites not so much. The problem is the  base it’s shrinking daily. In our post  THE SHAPE OF THINGS TO COME `10/5/16 we postulated “He (Trump) might get this last great white hurrah but what then? Non-whites are growing faster. Republicans always lose women and the young are avoiding Trump and Republicans in record numbers.” Nothing has been done to change this dynamic. Without an outreach plan the Republicans can only go to battle reeking of Eau de Trump. The hope then for 2018 and 2020 is continued economic expansion. Of course, this expansion is already at almost record length. Maybe the expansion will go on forever or maybe the Wall street Journal Capital Account’s Greg Ip will prove prescient when he pointed out:

If you drew up a list of preconditions for recession, it would include the following: a labor market at full strength, frothy asset prices, tightening central banks, and a pervasive sense of calm.

In other words, it would look a lot like the present.

Those of us who have lived through economic mayhem before feel our muscle memory twitch at times like this. Consider the worrisome absence of worry. “Implied volatility” measures the cost of hedging against big market moves via options. When fear is pervasive, options are expensive so implied volatility is high. At present, implied volatility in bonds, stocks, currencies and gold sits near its lowest since mid-2007, the eve of the financial crisis, according to a composite measure maintained by Variant Perception, a London-based investment advisory.

The economic expansion is now entering its ninth year and in two years will be the longest on record. The unemployment rate sits at 4.3%, the lowest in 16 years, suggesting the economy has reached, or nearly reached, full capacity.

Maybe Republicans better not solely bet on good economic times. Their best hope for success still is the Democrat Party.  After all they found a way to grab defeat from the jaws of victory in 2016. The party out of power making a strong comeback have come up with something new. A workable plan and/or new faces to get the public’s attention. Newt Ginrich a new face of the party pushed his “Contract with America.” Raim Emanuel recruited attractive people who could get elected rather ideologues. The Tea Party brought forth new faces to take on the ever-expanding intrusive government. All upped their ground level organizations. To date has anyone seen anything like this from the  Democrats? To battle the crass demeaning Trump the party elects as their leader an unattractive profane balding old guy. The Affordable Care Act and a higher minimum wage are their front and center policies, pushed by the same old faces. The ones already beaten by the Republicans at every level, Why expect a Democratic win.

A Democratic makeover to fresh and energetic or a reined in Trump actually trying to appeal to anyone other than his 30% base armed with a decent health care plan, we’ll see which party makes the moves to bring them success. Failing to make these changes will mean victory will be determined by that state of the economy at election time. Is this really their plan? Maybe the French have it right. When the old ruling parties ran out of gas, Emmanuel Macron simply formed a new party, took control and started making reforms.