POITOU, FRANCE – A new Diary dictum:
A new administration can only do good by undoing the good things that previous administrations claimed to do.
That is, it does not do good by adding programs of its own. It can only make things better by eliminating the jackass schemes already in place.
That is a major problem for a new president.
Because the people in charge of a government are those who put the programs in place and who still benefit from them (aka the Deep State).
They do not give them up readily.
So it came to pass that, in the year of our Lord 2016, Donald J. Trump looked around and saw the lives of the Americanites had become bitter and hard.
Fewer had “breadwinner” jobs than in the last century. They were unable to buy the things they wanted, since prices had gone up faster than their real incomes.
Meanwhile, the few, the rich, and the powerful mocked them as “deplorables” and “low-information voters” who lived in “flyover America”… hung the U.S. flag from their porches… didn’t drink lattes or do Pilates… couldn’t recognize a French wine by the shape of the bottle… and were neither gay, nor bi-curious, nor gluten-free.
“The Donald” spoke for these downtrodden masses, America’s lumpenproletariat. And he promised to set things right.
He would take us back to the land of milk and honey… to the way things used to be. We would dig up coal again. We would fire up the factories of Youngstown, Gary, and Toledo again.
Pump monkeys would jump up from their seats and fill our tanks and wash our windshields again. We would be proud again.
At the Detroit Economic Club, in the summer of 2016, candidate Trump railed against the “weakest so-called recovery since the Great Depression.” And then… using a metaphor that would appeal to the Motor City… added, “I want to jump-start America.”
Later, in Chicago, he promised to be the “greatest president for jobs that God ever created.”
“We’re going to have job growth like you’ve never seen,” he foretold.
This was enough to push him over the top in Michigan, Ohio, and Pennsylvania… which put him over the top in America.
And now, with school bells ringing and the sun already past its zenith for the year 2017, it’s time to ask his supporters: How did that work out for you?
Whoa, Dear Reader… You’re probably thinking: “There he goes again… criticizing the president.”
But this is no criticism of Mr. Trump. He has done just what we thought he would do, just what almost any president in his position would have done.
We may wish for a hero who takes on “the system” and turns things around; but that’s not the way a late, degenerate empire run by an entrenched Deep State elite works. The president is not in charge; he cannot be held responsible. He is just a walk-on, walk-off player in a much bigger drama.
Mr. Trump tells us that his administration has “added a million new jobs.” That figure comes from the Labor Department, which is responsible for fudging these numbers. It is the tally of how much non-farm payrolls grew in the first six months of the year.
But before we look at how that figure compares to previous job-creation statistics, let us return to our dictum and look more closely.
When a president says he has “created jobs,” he is merely grandstanding. Presidents don’t create jobs. Neither do their administrations.
Congress can pass laws, claiming job creation. But all it can do is take money away from some people and give it to other people. It is mostly creating fake “jobs” that wouldn’t exist in a win-win world.
Without markets to discover prices, competition to eliminate underperformers, and profits (or losses) to keep score, there is no way to know whether a job is worth doing or not. That’s why most government-created jobs end up being zombie jobs.
They take money and resources away from the real economy, reducing the number of real jobs.
Therefore, the only way a new White House team can boost the number of real jobs is to cut the phony-baloney programs put in place by the old teams – especially those that directly hinder startups and small business growth, where new industries take shape and new hiring takes place.
That is what Mr. Trump seemed to promise in 2016 – to get the feds, cronies, and zombies off our backs, with fewer regulations, less wasteful spending, lower taxes, reduced borrowing, and less claptrap.
So… what’s happened so far?
Maybe we’ve missed something, but we know of not a single significant step in this direction.
Nothing the Deep State cares about – money and power – has been put at risk. As far as we can tell, too, the jump-start has misfired.
The economy continues to turn over grudgingly, with no increase in output. To the contrary, key industries – housing, auto, and restaurant – all report declining activity.
Consumers seem to be running short of money, which is just what you’d expect at the end of an expansion cycle (however weak).
And how about job growth?
Turns out, the rate of new job creation has gone down, not up. Reports The Fiscal Times:
Not only does the six-month increase in employment fail to qualify as a “jump-start,” it represents a slower pace of job creation than occurred during the six months before Trump took office.
Monthly expansion of total U.S. employment has been about 2% lower since last January than it was during the previous six-month period, and 9% lower than 2016 as a whole.
And poor Michigan. During the final six months of the Obama administration, the state was adding 7,850 jobs a month. Under Team Trump, job growth has collapsed to 2,550 jobs a month – a nearly 70% drop.
Pennsylvania saw a drop-off in jobs, too, but not so catastrophic. It was adding 6,000 jobs each month during the last semester of 2016. That number dropped by one-third during the first semester of Trump’s rule.
Again, this is not a criticism of the former reality TV star. It would have been a miracle if he had understood what was going on, let alone been able to nudge it in his chosen direction, whatever that was.
The real story is much bigger… more alarming… and more interesting. In this story, there are plenty of villains, but few real heroes.
More to come…
BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners
Dollar holders beware…
Your buck will buy you a lot less abroad today than it did at the start of the year.
Today, we’re looking at one of the charts we track the closest at the Diary, the U.S. Dollar Index.
It shows how the strength of the dollar compares with six major trading partner currencies.
As you can see since the start of 2017, the U.S. Dollar Index has plunged 10%.
That’s the biggest fall for the index since 2010, when the dollar sank 14% from June to November of that year.
– Chris Lowe
Hurricane Harvey Isn’t Just Texas’ Problem
After record flooding, Houston has tough times ahead of it. But it’s not just Texas. Here’s how Harvey will impact the economic outlook for the entire country.
Amazon: Not So Dominant After All
It’s widely believed that Amazon is the undisputed retail champion in the U.S. But according to one measurement, Amazon isn’t the strongest retailer… it’s the weakest.
Your Best Defense in the War on Cash
The “War on Cash” is the ongoing effort by governments and central banks to make the money in your wallet illegal. It’s been gaining traction in recent years. Colleague Teeka Tiwari shows one way to protect your wealth today.
In the mailbag, readers consider if Trump’s tariffs would make America great again…
I have heard that great companies and economies were built on tariffs – protection for the local economy. The protection allowed the manufacturing in the protective country to grow, employing more people who could then spend more money on the goods, so the whole economy grew – more jobs, more happiness. Great idea! No wonder President Trump likes it.
Then I hear that tariffs are a “bad idea,” that they make win-lose trades as a result of the use of force, trade laws, regulations, and restrictions. Let the “free market” decide what to do. Who needs the world improvers in the middle of any deal?
Which is it? I see that the concept of a free market is a great way to make win-win deals, but I don’t see a free market in this world. For example, if a company in the U.S. decides to use “cheap” labor in another country so that the cost of manufacturing is lower, the company can make more profit – at least in the short term – and that is what counts in a competitive world. Who cares if the labor is subsidized by a foreign government, or if there is no regulation on the manufacturing pollution, or if the laborers “die young”?
A country with low labor costs can put a whole industry out of business in a country which has higher costs of production – labor, environmental protection, social protection, etc. The higher-cost workers are soon without jobs. “Retrain,” say the advisors. But what about the people who can’t become “retrained” for complicated jobs? Do they get a free TV, couch, phone, and pizza from the taxpayer so they can sit at home alone until they die?
What is the social cost to the nation, to the taxpayers, so that the importing company can “do well”? This seems to me to be a moral issue, not an economic rationalization. Are you willing to educate us on the issue?
– Clive R.
Have you been tapping my cubicle? I have had many conversations about Trump, and the rage on both sides is amazing. I constantly remind people that while many of his proposals are good and would actually help the economy, he has gotten nothing done since he was elected. And of all of his proposals, there is only one which he is likely to get passed which, with the exception of “the wall,” is the single worst idea that he has had, which is to say “protectionism,” or tariffs.
This one proposal the Deep State would love to implement for him. Any student of economics or history knows that imposing tariffs is the shortest path to economic destruction of a nation, and the only reason that the U.S. has had so many companies go “off shore” is because the U.S. has the single highest corporate tax rate in the world. Not rocket science. As mentioned, Trump has done nothing thus far except keeping himself in the press over stupid tweets – which I still contend may be his initial intention in the first place – effective branding… it’s always what he has been good at.
It’s not your fault that when you are right, it ticks people off. Closed minds make angry minds. For those of us who can listen to things that we haven’t thought about already, many actually learn something new. Perish the thought, but keep it coming anyway.
– Joe L.
I agree with all you’ve said about President Trump. He most definitely has run into the Deep State. Now knowing the frustrations Mr. Trump is probably feeling, and the fact that it will take the corrupt Congress to complete his campaign promises, short of civil war, in your opinion, what would it take for Mr. Trump to complete some of his campaign promises?
Next, is civil war imminent? Being a veteran, I can’t stand seeing the government be taken over by globalists, or establishment politicians who are living off the taxpayers and promoting themselves in their own self-righteous manner without anyone as their overseer. It has to change, and it will. But it will only change by one or two methods: war or the will of the people to vote them out.
There may be one other option – that’s the Convention of States. If we can get to those politicians who understand the corruption and truly want to “right the ship,” then we may have a chance without civil war.
– Jim L.
The problem isn’t Trump, the problem is Trump isn’t equipped to fix the problem. We all know what has to happen, but nobody wants to be responsible for the making it happen. I believe Trump has done wonders considering he’s shoveling manure with a fork – not much happens, and it still stinks when you’re done for the day.
I accept your point of view, even if I don’t like it. Gives me a perspective that complements my worldview. Trump seems dedicated to solving the problems by directing his attention at them. Apparently it’s worked before, but he had employees. Now he has a bureaucratic army.
As best as I can tell, Hillary actually won! She can blame the Russians, collect massive speaking fees, no worries about investigations, and can take pot shots at Trump. Besides, Congress has gone Hillary light, so I say, where’s the loss?
– Scott H.
I am with you. You are the correct one. You fended off and/or responded to your mailbag critics well. If only Mr. Trump was willing to cooperate with fellow Republicans in Congress instead of Twittering like a spoiled child all the time! At least we got Gorsuch on the SCOTUS. I am a former accountant – we in Texas hate deficit spending – state constitution won’t allow it.
– Tevan K.
Meanwhile, another reader has a take on the recent flooding in Houston.
Let’s stop talking about Trump for a moment and discuss a lesson being taught in Houston. This is a lesson for you, Bill, and all people who believe the government should let free enterprise work its magic without regulation.
Here we have a city that allowed developers to build where they wished without caring where the water went. It was win-win with the developers making money and the buyers of homes getting a bargain in beautiful neighborhoods. No annoying regulations adding to the cost of construction.
The builders have moved on and no doubt live elsewhere. Now the buyer is paying the real price. The deal does not look so win-win now for many people. Perhaps government regulation is necessary after all. Perhaps rather than focusing on draining the swamp, you should suggest how the regulations could be improved to benefit everyone, not just the rich and powerful.
– Edmund S.
Last year, he called the No. 1 stock on the Nasdaq and made investors 551%…
This year, he’s back to show you how you could ultimately make between 414% and 2,100% on Apple’s new iPhone launch.
You can’t afford to miss this. Click here to watch it…