Posts Tagged ‘Tariffs’

The Thinker

In the midst of chaos, plenty of reasons to be hopeful about the midterms

In my last post, I intimated that Trump Disorientation Disorder was striking close to home, affecting my wife’s mental health. I’d like to say she’s doing better but at least she’s getting treatment. I doubt she is alone. Every week in this presidency feels like being on a roller coaster in free fall, but some weeks are freakier than others.

This week certainly was one of them. Trump’s cruel policy of separating children from families at the border grew slightly less evil when he decided to rescind this policy, a policy he said could not be rescinded because somehow it was all the Democrats fault. To kind of cap off a freaky week with a bit of humor was this nugget from a Washington Post story. Apparently our “stable genius” president doesn’t know that only Congress can change immigration law. He thought he could do it by decree.

A cascade of awful news is not great politics. Trump apparently thinks that being awful pays political dividends. The dividend he is looking for is to turn out his base in the midterms. He may or may not succeed in doing so. But he can’t win by just turning out his base. He won the presidency by turning out coalitions, including a lot of Obama voters who didn’t like Hillary. Also, a presidential election is much different than a midterm election. In a presidential election, you can win while losing the popular vote, which was his case. In a midterm the playing field is more even. Senators are elected or reelected based on the popular vote. Gerrymandered districts make it harder for incumbents to lose reelection. A recent Supreme Court ruling suggests at least for the moment the court sees no reason to declare these crazily drawn districts illegal. In any event, happy people rarely have motivation to go to the polls, while unhappy people have plenty of incentive.

So the more Trump piles on the unhappiness, the more motivated its victims have to go to the polls. Moreover, Republicans are doubling down on deeply their unpopular policies. Just this week the House narrowly passed a bill that would cut food stamp benefits. It’s unclear if this bill will become law, but we do know that Trump has initiated a wholly unnecessary trade war that’s already affecting blue-collar Trump voters and is likely to affect many more of them as the midterm approaches. Indeed, countries experiencing American sanctions have created targeted sanctions narrowly focused to rile Trump’s prime constituencies.

Republicans in Congress sure have noticed. This is a party of free traders but their complaints to Trump on these tariffs are falling on deaf ears. It’s one thing to target policies affecting people that Republicans don’t like, such as immigrants. It’s another thing entirely for them to affect their own voters.

But it won’t be just them of course. It will be lots of us. Tariffs raise prices while reducing competition. To some extent it’s affected my purchasing decisions too. We are considering adding some solar panels to our system, but panels are now subject to steep tariffs. With no chronic need to buy them, it’s easier to wait until tariffs disappear. The price of panels should drop anyhow but there’s no reason for us to pay a premium now. It’s not good for solar companies however, which are already suffering and shedding jobs. Most of these jobs are steady blue-collar jobs too, likely worked by a lot of people who voted largely for Trump.

If Trump truly wanted to help his base, he would not have put up this tariff in the first place. Solar jobs have been climbing steadily and are almost the ideal blue-collar jobs of the future. As prices decrease, demand for solar will only increase, plus will be replacing a dying coal industry with clean solar power. It’s a no-lose proposition.

This of course is only one of many ways Trump is pissing off his own voters. He and the Republican congress still seem intent on destroying the Affordable Care Act, despite its popularity. He said he was going to replace it with something better that costs less, but hasn’t. So premiums will be on the rise right before the election instead. People are already losing health insurance and rising premiums will price many out of the market too. The lack of a penalty to have health insurance also pushes up premiums. Health care availability and affordability is the top issue right now on voters’ minds. In short, their policy is deeply counterproductive to staying in office.

Trump of course ran on a platform that in many ways sounded quite progressive. He complained about big business and the elites. Once in office though he populated his administration with these very people. Trump’s core voters won’t give up on him, but he will peel away plenty of marginal voters. From special elections over the last two years, it’s clear that voters are voting their pocketbooks, which explains why Democrats have been winning so many of them.

If nothing else, tariffs will have an inflationary effect. We’re likely to see the unemployment rate tick up between now and the election too, most likely due to Trump’s tariffs. Those who are victims may find themselves with less of a safety net to fall back on: less in the way of food stamp benefits and unless their state has expanded Medicaid no health insurance too. These factors will lead to economic uncertainty. It’s hard to say if it will cause a financial crisis before the election, but it certainly might. In any event, despite the tight labor market, most employed Americans have actually lost income during this administration. And since fewer than half of employed Americans have a 401K or own any stocks, they are not profiting from upturns in the stock market.

To me this suggests 2018 will be a wave election that will swing the country decidedly in a blue direction. There are few signs that Republicans can point to that are to their advantage. It’s sure not their immigration policy, which is deeply loathed by all sides. But of course it will be pocketbook issues that will be motivating voters the most, and voters will have plenty of motivation to vote in their best interests.

 
The Thinker

The perfect storm

In case you hadn’t noticed, Donald Trump suffers from Attention Deficit Disorder, a side effect of his Narcissistic Personality Disorder. I’d say give the man some Ritalin but in many ways his ADD simply helps speed up his unraveling. The more I watch the man, the more convinced I am that he subconsciously wants to fail. He’s in way over his head. He can’t acknowledge it to himself so he spends a lot of time doing stupid stuff.

Stupid stuff like spending Easter tweeting that there will be no DACA deal and he’s going to blow up NAFTA if he doesn’t get his border wall. This is likely to blow over rather than blow up because when you have ADD by definition you have a short attention span. So it’s likely a week from now he’ll have totally forgotten he tweeted this stuff. In any event, if you are hearing a chorus of “ho hums” coming from Capitol Hill, it’s because they’ve seen stuff like this so many times that it’s becoming rote. Even the press is starting to move these presidential tweets below the fold. Hopefully they’ll move to page A10 pretty soon.

It’s obvious Trump is not a politician, which is presumably what his supporters like about him. When he tries to schmooze it comes across as wholly inauthentic. In any case, politicians quickly learn if you want to get stuff done you have to do a lot of schmoozing. That’s because power in the government is decentralized and not even Trump can change that, although he is trying. For now at least if he wants to get something major done, it has to be done through Congress, not executive actions.

It’s likely when you were growing up if your parents scolded you it did not enamor you toward them. It works the same way in Congress, which is why so little of Trump’s agenda has gotten passed despite having a Republican congress. In some ways Congress is digging in their heels. They’ve pretty much blocked Trump’s outreach to Russia and passed veto-proof legislation to tighten Russian sanctions. Congress has trumped Trump, and even Trump has seen the writing on the wall by expelling sixty Russian diplomats who were likely spies.

Trump obviously didn’t read the FY18 spending bill even though congressional leaders met with him to get his agreement on it before moving it through Congress. When it was sent for his signature he rebelled then reluctantly gave in. The legislation funds election system reforms, targets Russian hacking of our elections and hits many of the items on the Democratic Party’s wish list, such as major increases in funds for domestic programs. The CDC is allowed to research the effects of guns on public health again. Who would have thought with Republicans supposedly controlling government?

In any event, if Trump actually makes a stand on his border wall, the proper thing to do is to stand up to him. That’s what you do with bullies and arguably Congress is doing a pretty good job of it already. Granted, there are some exceptions. The Republican congress finds it in their interest to give the White House a pass on its general corruption. Mostly the Congressional leadership is well aware of his ADD and uses strategies like the spending bill to work around him.

Trump can renegotiate NAFTA and take many actions, but he can’t cancel it. His leverage on DACA is mainly of his own choosing. It won’t take for too many DACA recipients to actually be deported before he learns how counterproductive it will be. And these measures certainly won’t spur Congress to build a border wall, or convince Mexico to pay for it, mainly because he can’t really block these imports from Mexico by himself. He has to convince Congress to change the law. As long as he is yelling at Congress, it ain’t happening.

All this is leading toward the midterms on November 6, which is likely to return Democrats to the majority in Congress. It will still be a tough hurdle for Democrats, given the extreme gerrymandering nationwide and further voter suppression efforts. But Trump is doing pretty much everything possible to empower Democrats back into the majority. Just today I read that China is imposing its own tariffs against selective U.S. imports in response to recent U.S. tariffs that Trump authorized. This dropped the DJIA some 450 more points, putting all stock indexes in the negatives for the year. We are a hare’s breath away from correction territory. The downturn is almost exclusively due to the tariffs Trump has put in place, which will have the obvious result of restraining trade and thus reducing economic growth. These Chinese tariffs are specifically chosen to hurt his base of support. European and other countries are starting to do likewise. Not much can convince Republicans to vote for Democrats, but policies that hit them in their own pocketbook can bleed off a number of wavering supporters.

Underlying all this chaos is the epic turnover among White House staff. Trump can’t even find a new lawyer, as his brand has become toxic. Administration is missing from the so-called Trump administration. What his bullying has caused is an epic reaction, causing people to appreciate democracy and sound governance. It is spurring people (mostly women) to run for office. By some estimates, the recent March for our Lives was the biggest march ever in Washington. Trump has engaged young people in particular against him. This hastens not just his disempowerment, but also the end of Republican governance.

Leading perhaps to the perfect storm on November 6. With no sign that Trump will change tactics and every indication that he will double-double down, it’s not too hard a prediction to make.

 

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