- the source for market opinions


May 15, 2019 | The Nice Thing About Donald Trump…

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.

In the fire of spring

Your winter garment of repentance fling:

The bird of time has but a little way

To flutter  And the bird is on the wing.

– Omar Khayyám, Rubáiyát

PARIS – We are sitting at a sidewalk café in the 7th arrondissement. The sun is shining. People come and go; endless streams from the left and the right.

Couples sit chatting at the adjacent tables. Groups of colleagues take a break from work. And students stop to have a cigarette between classes.

There are tourists, too, with their maps and water bottles, making a pilgrimage to the burnt-out Notre Dame cathedral. They bring so much money into the city, it is now hard to find a restaurant that doesn’t have an English menu.

It is springtime in Paris.


Truth and Lies

Back in America…

The nice thing about Donald Trump is that he is “honest.” Even when he is lying. He’s a performance artist for whom truth and lies are more or less the same thing. It’s the show that is true – the ratings… the base… the gross revenues.

In order for a show to have wide appeal, in politics as in professional wrasslin’, the theme has to be simple: good versus evil, black versus white, us versus them. Truth, nuance, and ambiguity have no place in it.

Dig down into the numbers, the theories, and the details, and the good versus evil narrative gets mucky, murky, and messed-up. But why bother?

Yesterday, we noted that even people who call themselves conservatives have stopped digging. They are now willing to let the feds tell them who they can and can’t do business with, and on what terms.

This was confirmed later in the day, when Dear Readers wrote to tell us what an idiot we were for doubting our president and his trade war with China. Many still believe that the U.S. president can – by edict – make us better off.

He will stop the Chinese from “stealing our jobs,” say some. He will stop the Chinese from “ripping off our technology,” say others. “We’ll make the Chinese pay,” says POTUS.

Even the president’s own economic advisor couldn’t quite stomach that last one. “Both sides will pay,” admitted Larry Kudlow.

And when it comes to “us versus them,” the Chinese are no pushovers. “Negotiate, sure! Fight, anytime! Bully us, wishful thinking!” replied the state-owned media. The Chinese have no doubt which side is evil. And they’re willing to pay dearly for the “us” cause.

“I can eat grass for the whole year,” wrote a Chinese patriot, responding to the appeal.


Real War

But we’re not here to win an argument with Dear Readers… We’re just trying to connect the dots.

We know of no instance in human history when people have been made better off by government proclamation… including one restricting trade… unless it eliminated some prior meddling (such as the end of Prohibition).

One possible exception – and it is a telling one – is when you are preparing for a real war. It makes sense, then, at least for the government, to deny resources to the enemy.

That is what the Roosevelt administration did in the runup to America’s entry into World War II.

Japan sought to maintain cordial relations with the U.S. But Roosevelt cut it off from oil and other vital supplies, effectively goading it into making a catastrophic mistake – attacking Pearl Harbor.



And now, say tariff proponents, China is at war with us.

War is always a zero-sum game. You only win by making the other guy lose. You take something from the other guy – life, liberty, or property – or he takes it from you.

There is no positive outcome, at least not in an economic sense. Instead, the net sum is always deeply negative as factories, farms, fuel, houses, ports, and people are destroyed.

So, if you want people to prosper… to get what they want… to enjoy peace and economic growth, you should avoid win-lose, negative-sum games.

You want the feds to back off… so that win-win deals between consenting adults can take place.

And yet, the U.S. seems to be pitching more and more towards win-lose, confrontation… and war. At home. And abroad.

China has been providing Americans with low-cost goods for nearly 40 years… with trade barriers coming down steadily. Suddenly, the China trade is unacceptable. And all over the world, the U.S. is sticking out its elbows.

Foreign Policy reports:

In the latest uptick of trans-Atlantic tensions, European ships involved in the construction of a controversial gas pipeline from Russia to Germany could be subject to U.S. sanctions under a new bipartisan bill that will be introduced in the U.S. Senate as early as Monday.

Until now, Germany has been able to decide for itself where it will buy its fuel. What has changed? Is this just Trump being Trump? Nope.

Foreign Policy again:

While Trump has clashed with Democrats and Republicans alike over his handling of relations with Russia, there is broad bipartisan opposition in Washington to the Nord Stream 2 project.

And the bill is sponsored by Ted Cruz, who calls himself a “conservative.” There is nothing conservative about trying to tell an ally from whom it should purchase its fuel.

So what gives? Why? Why now?

Stay tuned…




STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

May 15th, 2019

Posted In: Bill Bonner's Diary

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.