Trump Acts Exactly As Advertised On Several Major Issues This Week, Yet People Seem Shocked
Those Who Voted For Trump Because They Wanted A Cold-Blooded Businessman In The White House Are Getting Exactly What They Bargained For…Sort Of…
1. The Disappearance And Probable Murder Of Saudi Journalist And Dissident Jamal Khashoggi
According to the Washington Post (which has been way ahead on this story), the Turkish government says it has video and audio recordings confirming Khashoggi was murdered while visiting the Saudi Consulate in Istanbul. And Senators, including Democrat Chris Murphy, and frequent Trump ally Rand Paul, are drafting a proposal for sanctions against the Saudi government, which is implicated in the murder, including not allowing them to buy $110-billion in weapons from the U.S.
Not so fast, Trump says…
The President argues that Khashoggi is not a U.S. Citizen (he is a U.S. permanent resident and wrote in the Washington Post), the alleged attack did not happen on U.S. soil, and if the Saudis don’t buy the arms from the U.S., they’re just going to go to Russia and China, and “what good does that do us?”
In other words, this isn’t about international relations or policing the globe or protection of the press or even basic decency. It’s about business.
Here’s a clip (click on the photo to play):
As we’ve mentioned before, selling more U.S. military equipment to other countries is President Trump’s biggest jobs program. Defense contractors never moved their factories out of the U.S. because they couldn’t, due to national security issues. So adding jobs there is so much easier than the President having to coax or coerce companies in other industries to bring their factories back here. And the demand for arms will always be there.
This story also illustrates an important function of journalists, because without impetus from the President, any change that comes will be the result of reporters lighting fires under people’s behinds, to put it crudely. And because Khashoggi is one of ours, we won’t give up easily.
2. The Alarming Warning In The U.N.’s Climate Change Report: The Planet’s Only About A Decade From Environmental Catastrophe.
That report paints a much bleaker picture than anything previous, predicting — among other things — widespread disease, and many island nations ending up completely submerged.
Trump’s response: “I want to look at who drew it, you know, which group drew it….I can give you reports that are fabulous, and I can give you reports that aren’t so good”.
The International Panel on Climate Change, released the report. And it represents just everybody who’s still in the Paris Accord climate agreement, which is like, the rest of the world. But the reason the President pulled the U.S. out of the accord is not really about environment, but about business: it would put too many restrictions on U.S. businesses which would potentially hurt their growth. And that’s unfair.
Trump’s view was echoed by members of Congress from big oil states.
Many scientists blame warmer seas and higher sea levels for the increasingly devastating hurricanes and storm surges we’ve seen over the past several years. Including the massively powerful Hurricane Michael, which just swept across the Florida panhandle. And they expect it to get worse. And the federal government continues to go over budget to pay for clean up and restoration. Isn’t that business too?
3. The Continued Fall In Stock Prices
For which the President continues blaming the Federal Reserve, after taking all the credit for the market’s run-up for himself. Trump lashes out again, as the market plunges again, calling the Fed “out of control” and “wrong”. And insisting when it comes to the economy: “I know about it better than they do. Believe me.”
What we believe is continued bashing by the President, of the central bank chief the President hired, is never going to make investors feel less jittery.
This one Trump may be a little off course on compared to what many other business leaders would do. While CEOs do in general do prefer easy access to money (and raising interest rates hurt that), they also understand managing with a longer-range focus often keeps the economy and their businesses healthier. We’ve all seen CEOs who burst onto the scene and became instant celebrities only to self-destruct in a year or two because their seemingly magic success was all centered around maximizing short-term gains.
Trump would prefer to see a huge U.S. dollar buffet, where big businesses can just come in and gorge as they please. In his view, that would make the economy even healthier by better equipping corporations to pursue whatever type of opportunities they want. The Fed is worried that might overheat the economy and create inflation, which is extremely hard to reverse once it starts. So it’s trying to head that off by raising rates a little bit now. (As we said yesterday, a little bit like an inoculation.)
Furthermore, just as the Fed’s main job in times of economic prosperity is to prevent inflation, in the event of an economic downturn, its main job becomes to stimulate the economy. And its main way of doing that is by lowering interest rates. But if the Fed leaves interest rates near zero (as they were very recently), it has nowhere to go if all of a sudden the economy hits some obstacles and needs to be reignited. So Trump’s vision would neutralize that capability as well.