A Fork In The Road?

Dave Davis Commentary, Policy, Uncategorized , , , ,

It all seemed so easy. Resolving the war in Ukraine upon Trump’s return to office—peace in Gaza and the return of all hostages. Manufacturing is sprouting up across the Rust Belt, providing a multitude of good-paying jobs, all protected by a solid tariff wall. Everyone at the rallies cheered for a new day. Well, Trump has been president for over 100 days, and it all seems like a distant memory.

If anything, the Ukraine war is even nastier, with Russia targeting civilians. While directing all sorts of pressure and humiliation toward Ukraine and its leadership, Trump, up to this point, refused to cause Russia any discomfort. Why does our president coddle an unfriendly power that is the aggressor? As I demonstrated in my post, “What’s Trump Thinking,” the notion that Russia would abandon its alliance with China is a fantasy. China isn’t about to allow a Russian defection to put the developing Arctic trade route in unfriendly hands. Putin knows that if he can’t subdue the much smaller Ukraine, he stands no chance against China. Trump seems unaware that Russia is China’s vassal state. He continues to treat Russia as a great power.

While retrieving some hostages, the war in Gaza rages on, with many still unaccounted for. A truce with the Houthis has allowed shipping to return to the Suez route, but Israel is still subject to attack.

As Iran closes in on becoming a nuclear power, Trump is in talks to trade sanctions relief for Iran putting off a nuclear weapon. This negotiation is similar to the Obama administration’s tactics. The pact they made with Iran resulted in that nation funding its pawns, Hamas, the Houthis, Bashar Assad, and Hezbollah. We all know how that turned out.

Trump’s industrial policy, centered on the use of high tariffs, has so far engendered much confusion, numerous paper promises, and little difference in Rust Belt manufacturing. Where the almost daily tariff changes lead is anyone’s guess.

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Trumping Trump

Dave Davis Commentary, Policy, Uncategorized , , , ,

O.K., who left the closet door open and let Peter Navarro, the White House trade advisor, out? All I know is I woke up Friday morning to find Tariff Man, A.K.A. President Donald Trump had threatened the European Union with a 50% tariff on June 1st if they didn’t bend to his will. Added to this blast was a 25% tariff on any iPhones built outside the U.S. Apple has been moving production to India.

So much for the assurances uttered by those behind Trump’s first-term tax success; as I’ve pointed out, Larry Kudlow, Steve Moore, and Art Laffer led us to believe massive tariffs were only a tactic to obtain fairer trade terms. On “Liberation Day,” we saw high tariffs, only to be partially rolled back, but here we go again. How often do we hear the cry of “wolf” without any canine attack before we stop listening about wolves and anything else we hear from the Crier?

We may have legitimate complaints against our trading partners, and they have their concerns. But why not negotiate in good faith rather than making enemies out of friends and potential friends? Our relationship with Europe is already shaky over the Ukraine conflict and NATO. Do we need a more estrangement?

As the most populous nation on earth, India, as an ally, could help offset China. India is a rapidly developing nation willing to produce things we’ve been getting from China. We should be happy that Apple builds phones there rather than in China. No, Trump demands Apple make expensive phones in the U.S. India has every reason to feel stiffed by the U.S. Do we want to punish an American Tech company while we’re claiming that’s what the EU is doing? Why take business from India?

Trump claims he has all the cards, and everyone must give in to his desires. This blog is devoted to public policy, ours, and other nations. Looking at things from the perspective of different countries, Trump’s contention isn’t necessarily so.

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Mirror Mirror

Dave Davis Commentary, Policy, Uncategorized , , , ,

I can’t help thinking we’re in some mirror image of the Biden presidency. It’s a funny house mirror, to be sure, but a mirror nonetheless. An aging president is exhibiting strange behavior, and the people around him and his supporters in the media assure us there is nothing to see here. The president is at the top of his game. Deluged today with books exposing Joe Biden’s cognitive decline, will books describe the coverup of Donald Trump’s decline four years hence?

Trump,suporters point to his suceesses. The “businessman” knows how to make deals. A slew of executive orders has changed almost everything. The border is secure. Tariffs force manufacturing to return to the Rust Belt, and foreigners invest trillions in the U.S., creating many good-paying jobs.

Remember the early euphoria over Joe Biden’s string of legislative successes? Finally, an infrastructure bill to fix everything, the Inflation Reduction Act to save the planet. Joe rivaled FDR or even exceeded him. Biden’s experience in foreign affairs will keep the peace. Democrats were elated.

Now, all this seems so long ago. Joe’s foreign affairs expertise brought us the horrendous Afghan withdrawal, the ongoing wars in Ukraine, and the Middle East. His Inflation Reduction Act gave us the highest inflation in forty years. Biden and his backers forgot that weakness invites aggression, and wild spending brings rising prices.

With things going awry, people started questioning the president’s competence. His stumbling, sometimes incoherent actions caused alarm. Yet everyone, from the White House to Biden’s legions of media supporters, told us Joe was sharp as a tack.

When the Wall Street Journal said otherwise, the whole media seemed down on the paper. Biden supporters ignored the dangers of the Afghan withdrawal or wild spending. The news media ‘s job is to alert people to possible problems, but they see none; if they do, they keep it to themselves. One book after another implies the administration’s abundant failures were due to Biden’s decline.

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Falling In Line

Dave Davis Commentary, Policy, Uncategorized , , , ,

The most dismaying part of today’s public policy dysfunction is the willingness of people who know or should know what they’re saying, which isn’t true, to shape views to align with their group’s views rather than look at the actual data. Just this past week, two well-known sources of information said things unsupported by any facts. If you believed them, it could cause harm.

On his Fox business show, Larry Kudlow and the panel laughed at a Wall Street Journal article showing professionals selling while the public buys. With the market rallying, their clear implication was that the public is smarter than the professionals and buying now is a better bet than selling.

This assessment flies in the face of experience. One of the universal signs of a market top is widespread bullishness, especially among smaller investors. Small investors don’t have the information that the pros have access to. Who else is left to buy to increase prices when the public is all in? Basing your market outlook on the supposed stupidity of professionals and the bullish actions of the public hasn’t worked out well in the past.

I don’t know what will happen. If the tariffs stay high, it’s hard to see a solid future. However, if Trump makes a few inconsequential deals, like the one with the U.K., and then calls most of the tariffs off, it would surely improve the outlook. At this point, no one knows what Trump will do. I don’t think Trump knows.

Having served in both the Reagan and Trump administrations, Kudlow has a unique position. He knows the adverse effects of high tariffs well, so it’s baffling that he’s taken a bullish position with high tariffs still in effect. Implying that the pros do less well at market turns than the public to justify his pro-Trump position is out of place.

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Homeless

Dave Davis Commentary, Policy, The Future Party, Uncategorized , , , ,

Seven Years ago, I started the series on the “Future Party.” The two-party system had increasingly become captive to its most extreme elements, and the situation becomes more divisive daily. During this time, we’ve experienced a mishandled pandemic, the most significant inflation in four decades, conflicts threatening a new Cold War, if not a hot one, and an upheaval in the world’s trading system.

Both parties contributed to these situations while ignoring the sword of Damocles hanging over the nation, our out-of-control debt problem. At the same time, we’re dividing in ways we haven’t seen before. We receive information from different sources, resulting in an inability to discuss the day’s issues. Each side presents its own “facts.” Where people on the left or the right enjoyed Johnny Carson or Jay Leno, those watching Stephen Colbert would never watch Gutfeld!, and visa versa.

The division has even spread to those we choose to associate with. Some won’t even consider dating anyone with different views. Whatever happened to understanding the other person’s position sufficiently to come to a compromise?

What has caused the widening gulf between Americans? One answer is too much Democracy. By that, I mean too many elections. As I pointed out in the Future Party series, national presidential elections get our attention and participation. Off-year elections and primaries have much lower turnouts. They appeal to partisans and those most directly affected. Government employees will turn out because local elections hit their wallets, but others can’t always devote the time.

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