Bill Bonner – Bill Bonner’s Diary (United States) –
BALTIMORE – It has gotten worse…
Now, reader feedback in the Diary Mailbag (see below) is running 3-to-1 against us.
Which is puzzling.
We’re not really against Mr. Trump. We don’t dislike him (we’ve never met). We wish him well. We have no reason to think he will be worse than Ms. Clinton.
Still, readers aren’t satisfied. They want devotion, not observation.
Now, four days after his inauguration, you declare the president’s “policies” DOA. Your opinions are not based in fact. You have nothing but your own inflamed ego to back up your crazy predictions. I cannot stomach such ignorance anymore. Post this on your daily, Bill, and see how many of your subscribers agree with me. If you have any left, that is.
[Editor’s Note: You can have your say by emailing us at email@example.com.]
Usually, you know what a president will do – because he follows a party line.
This one won’t. So, we have to ask: Who is this guy? What will he do? What will it mean?
Alas, never before has it been so important to draw the measure of a president. Because never before has politics played such an important role in markets and economies.
But okay… Our nerve cracks. Our backbone bends. We whimper in contrition. Today, we put on a red cap and look at the world through the eyes of its wearer.
We see that Donald J. Trump is a winner. He is our hero, our champion. He fights for us. If he wins, we win. If he makes America great, he makes us great, too.
Let’s begin with facts. What do we know so far?
Well, we know the president is a guy who gets things done. At least some things. He has a talent for getting himself on TV, putting his name on hotels, and getting himself elected president.
These things could be described as “vanity.” But we have the red cap on, so we will say simply that he is successful at self-promotion.
But now that Trump is president, some miracle has happened. The person who was so good at promoting himself and his brand will now be promoting us. Now he’s looking out for “the people.”
“You will never be ignored again,” he said at his inauguration last week.
Dear readers, you don’t know how happy and relieved that makes us feel.
Of course, being ignored was what we were hoping for. But we’ll put a positive spin on it, just for today – as in, POTUS has our backs.
How do we know?
He said so. Fact.
What else do we know?
Well, we know who he wants to put in key positions. Some of them seem pretty good.
For example, billionaire and “schools-of-choice” advocate Betsy DeVos in Education could be an improvement. But let’s just stick to economics.
For the key financial posts, the president chose Goldman Sachs people. Steve Mnuchin, his choice for Treasury secretary, is as Goldman as you can get; his father made his career there before him.
Is that a bad thing?
Of course not!
This is a guy who understands how yield and price move inversely in the bond market… how to turn a subprime mortgage crisis into opportunity… and how to talk to the big banks.
And since Mnuchin is now on the public payroll – at great personal sacrifice (he gave up millions in compensation as a movie financier to work for the federal government on a salary of just $237,000 a year; how will he make ends meet?) – he’s on our side.
He will work tirelessly to dismantle the fake-money system that made him and his cronies so rich.
Neither he nor “The Donald” have mentioned this in public. They are probably counting on a surprise to get the drop on the big banks… but now we can expect them to re-establish an honest money system… stop meddling with interest rates… stop supporting stock and bond prices… and let the chips fall where they may.
Of course, Trump, Mnuchin, Ross, and their cronies will be poorer as a result. Cut the U.S. stock and bond markets in half and you erase about $33 trillion in “fictitious” wealth.
But that’s what public servants are supposed to do: put the public’s interests ahead of their own. Thank God we finally have a team that will do it.
What are we forgetting?
Oh, yes… the 4% GDP growth… the tax cuts… and the big infrastructure-spending boom.
Let’s see… How does that work again?
You cut taxes… but hold on. Mnuchin says he’s just eliminating deductions while reducing rates so that the rich won’t really save any money.
He’s still promising a tax cut for the middle class, and for business, of course… and will use “dynamic scoring” to prove that the federal debt won’t rise.
Then, that extra money in the hands of the people will cause a boom. George Bush “the Elder” called it “voodoo economics.” But heck, he didn’t have a red cap on.
It’s pretty simple, really. Fiscal stimulus. Tax cuts. Growth. It’s funny previous administrations didn’t think of that… Guess they didn’t want 4% growth.
Well, Mr. Trump just tore up the Trans-Pacific Partnership (TPP) trade deal.
Not necessarily. If we were running things, we’d tear up all trade deals. Instead, we’d say simply: It’s none of the government’s business who sells what to whom.
Then people could get on with their lives, buying the best products at the best prices regardless of where they were made or by whom.
So, whoopee! Another good move by Mr. Trump’s team.
Putting America First
But what’s this? Did the president threaten to impose a “border tax” on imports?
Won’t that lead to higher prices – aka inflation?
And won’t it give the feds more power to decide which crony is taxed and which is not, which company may be important and which may not?
And won’t this lead to a slowdown in world trade, a reduction in economic growth, an increase in bureaucracy, and a poorer world?
But Mr. Trump is a winner; he must have something up his sleeve he’s not telling us about.
Restricting trade has never worked in the entire history of the world. But this time, it’s different.
Trump is going to triumph where even former Argentine leaders Cristina Kirchner and Juan Perón failed. You gotta love the guy.
Probably most important, Donald Trump has vowed to put an end to the altruism of the Clinton, Bush, and Obama administrations. Now it’s “America first.”
Why our past presidents put other nations ahead of the U.S. has never been explained. But if we’re wearing the red hat, we can’t ask too many questions.