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June 5, 2018 | President Trump’s Real Test

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

PARIS – Well, it’s all settled. This is the greatest economy that the world has ever seen.

The president said so himself on Twitter over the weekend:

Tax CUTS are working. America is WINNING BIG under President Trump!

The Nasdaq hit a new record high – pushed up by its favorite tech stocks. And the latest jobs report tells us that unemployment is at 3.8%, a 50-year low.

Let’s see… a 50-year low. That would put it back in 1968.

When the president refers to making America great again… that is probably what he has in mind.


Biggest Joke

We remember 1968. We were still in college. And in the summer, we had to quickly get a job to earn money so we could pay tuition for the following year.

As we recall, after two days of replying to want ads, we had two offers.

One was in a boatyard in Annapolis, scrapping hulls and painting the “bright work.”

The other was in a motley crew of half-wit foreigners in Baltimore, climbing TV towers to put on a coat of rust-preventing paint.

Neither were great jobs. The second was also dangerous, but it paid better. We earned $5.35 an hour, which wasn’t so bad in 1968.

And over the summer, we saved up about $1,500 – which was enough, barely, to keep us going for another year, assuming we continued our on-campus job of washing dishes in a frat house kitchen in return for free food.

Can an unskilled person find work so easily today? We don’t know.

According to the figures reported last week, 40% of adults can’t scrape together even $400 for emergencies. If it was so easy to get work, you’d think there would be fewer Americans with empty pockets.

Besides, the Bureau of Labor Statistics (BLS) figures are mostly nonsense – The Donald said so himself when he was running for office.

He referred to the BLS numbers as “the biggest joke in the country.”

But now that he’s The Man, the joke is on the other foot; nonsense is a lot more appealing.


Better and Better

When you are out of power, you attack. When you are in power, you defend. Thus, it has always been… and always shall be.

Now that he is in charge, the economy is great… the BLS tells the truth… and America is getting better and better every day.

As for the Nasdaq… the index was only invented in 1971. By the summer of 1998, it was around 1,900.

An investor might have expected it to go down from there, since it had been going up for more than 25 years.

But woe to the speculator who went short. The index rose another 200% over the following two years, and was at a record high of over 5,000 when the end finally came in 2000.

Nature hates excess, and every bubble finds its pin.

The Nasdaq crashed in 2000, with investors giving up 70% of their money… and then, they waited 14 years to be made whole again.

Now, the Nasdaq is again at a record high… it races ahead, and it dares not sit down; there are pins in every cushion.

Perhaps the biggest threat is the president himself… who is practically a briar patch of barbed opinions and prickly acts.


The Donald Show

Like every sentient being, we have been watching The Donald Show with both amusement and alarum.

The usual categories of American politician – slimeball, ideologue, glad-hander, or hack – don’t suit Mr. Trump. Like a show with a bad scriptwriter, spectators don’t know whether to laugh or cry.

We don’t know, either. But our guess is that America’s president is more a feature of his time… than it is of him.

Like mud on a fender, history tells us where it has been.

The U.S. has been in a decline ever since we were painting TV towers for $5.35 an hour. Debt, laws, regulations, and lobbyists have piled up.

Why? Our simple hypothesis: more win-lose deals; fewer win-win deals.

And the real measure of any president, before or since, is whether he resisted the win-lose deals… or encouraged more of them.

Win-lose deals are how the Swamp does business. Conniving. Stealing. Plotting. Backstabbing. Lobbying. Chiseling. And always using the power of the government to get an advantage. The insiders pass laws as dense as Christmas pudding. Then they get hired to help companies find the plums.

Just look at what happened to the people who put together the law that The Donald thinks is making America great again – the tax cut. From the newspaper The Hill:

Republican aides in Congress who were instrumental in writing the sweeping tax law last year are hitting the exits to take jobs in the lobbying industry.

Cashing in on K Street [where the lobbyists are] is a common move for congressional staffers in both parties, especially after major legislation is signed into law. Something similar happened after Obamacare passed in 2010.

In the two years after President Obama signed the Affordable Care Act, more than 30 former administration officials, lawmakers, and congressional staffers that had worked on the law joined the K Street ranks. The numbers have likely grown since then. What Obamacare was for Democrats, last year’s tax law was for Republicans…

Democrat. Republican. It hardly matters. When the swill hits the trough, the pigs come a-running.

And MAGA? Probably not.




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June 5th, 2018

Posted In: Bill Bonner's Diary

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