There was much to like and dislike in President Donald Trump’s Address to a Joint Session of Congress. Click on the link for a complete transcript. Here are the good, bad, and ugly highlights.
Trump: We have undertaken a historic effort to massively reduce job‑crushing regulations, creating a deregulation task force inside of every Government agency; imposing a new rule which mandates that for every 1 new regulation, 2 old regulations must be eliminated.
Mish: Excellent idea
Trump: We have withdrawn the United States from the job-killing Trans-Pacific Partnership.
Mish: That is the right idea for the wrong reason. TTP was anything but a free trade agreement and it was horribly constructed.
Trump: We will stop the drugs from pouring into our country and poisoning our youth.
Mish: The war on drugs is a miserable failure. We should halt it immediately.
Trump: Our obligation is to serve, protect, and defend the citizens of the United States.
Mish: Correct. And waging war in Syria, Iraq, Libya, and Vietnam had nothing to do with any of those obligations.
Trump: We cannot allow a beachhead of terrorism to form inside America — we cannot allow our Nation to become a sanctuary for extremists.
Mish: Fair enough. But the best way to stop terrorism is to not start mindless wars. ISIS is a US creation.
Trump: Over 43 million people are now living in poverty, and over 43 million Americans are on food stamps. More than 1 in 5 people in their prime working years are not working. We have the worst financial recovery in 65 years. In the last 8 years, the past Administration has put on more new debt than nearly all other Presidents combined.
Mish: Those are the ugly truths. But Trump never placed the blame where it belongs: On the Fed, on Congressional overspending, on fractional reserve lending, and on the lack of a gold standard.
Trump: We’ve lost more than one-fourth of our manufacturing jobs since NAFTA was approved, and we’ve lost 60,000 factories since China joined the World Trade Organization in 2001.
Mish: NAFTA had nothing to do with the loss of manufacturing jobs. See links below for a detailed explanation.
Trump: Our trade deficit in goods with the world last year was nearly $800 billion dollars.
Mish: Correct. Blame Nixon taking the US off the gold standard, not NAFTA.
Trump: Overseas, we have inherited a series of tragic foreign policy disasters.
Mish: Correct. Don’t make them worse.
Trump: My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. At the same time, we will provide massive tax relief for the middle class. Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes — but when foreign companies ship their products into America, we charge them almost nothing.
Mish: This is a strong hint at a border adjustment tax, and it’s a terrible idea. In contrast, simply cutting the corporate tax rate would be a good idea.
Trump: I am going to bring back millions of jobs.
Mish: No you won’t. Those manufacturing jobs are lost and gone forever.
Trump: Nations around the world, like Canada, Australia and many others — have a merit-based immigration system. It is a basic principle that those seeking to enter a country ought to be able to support themselves financially. Yet, in America, we do not enforce this rule, straining the very public resources that our poorest citizens rely upon. According to the National Academy of Sciences, our current immigration system costs America’s taxpayers many billions of dollars a year.
Mish: Agree. And free benefits are the problem.
Trump: America has spent approximately six trillion dollars in the Middle East, all this while our infrastructure at home is crumbling. With this six trillion dollars we could have rebuilt our country — twice. And maybe even three times if we had people who had the ability to negotiate.
Mish: Another ugly truth. So why don’t we stop the stupid wars and bring all of our troops home?
Trump: To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States — financed through both public and private capital — creating millions of new jobs. This effort will be guided by two core principles: Buy American, and Hire American.
Mish: How are we going to pay for this? I propose reduce military spending, bring all US troops home, scrap Davis-Bacon, kill all prevailing wage laws, and institute national right-to-work legislation.
Trump: Tonight, I am also calling on this Congress to repeal and replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time, provide better Healthcare.
Mish: Let’s see the details. Keeping it affordable while honoring pre-existing conditions will not be easy.
Trump: The time has come to give Americans the freedom to purchase health insurance across State lines.
Mish: Agree completely.
Trump: But our slow and burdensome approval process at the Food and Drug Administration keeps too many advances from reaching those in need.
Mish: Agree completely.
Trump: I am calling upon Members of both parties to pass an education bill that funds school choice for disadvantaged youth, including millions of African-American and Latino children. These families should be free to choose the public, private, charter, magnet, religious or home school that is right for them.
Mish: This will become another monstrous boondoggle if it passes.
Trump: We strongly support NATO, an alliance forged through the bonds of two World Wars that dethroned fascism, and a Cold War that defeated communism. But our partners must meet their financial obligations. And now, based on our very strong and frank discussions, they are beginning to do just that. We expect our partners, whether in NATO, in the Middle East, or the Pacific — to take a direct and meaningful role in both strategic and military operations, and pay their fair share of the cost.
Mish: What if they don’t?
Trump: Believe in yourselves. Believe in your future. And believe, once more, in America. Thank you, God bless you, and God Bless these United States.
Mish: All in all that was a good speech. Many will find more to like than dislike, but details are scant, and some of the dislikes are extremely distasteful.
Was Trump Preempted by the Fed?
Ahead of Trump’s speech, treasury yields soared and March rate hike odds more than doubled as noted in March Rate Hike Odds Surge to 80 Percent: New Standard for “Surprisingly Strong” Economy.
The short story is two Fed governors came out on Tuesday afternoon out of the blue singing the praises of a strong economy and a need to hike rates. William Dudley, head of the New York Federal Reserve, a typical dove, and John Williams, president of the San Francisco Fed were Tuesday’s dynamic duo.
They cited “surprisingly strong economic data”.
Data does not support the Fed’s message. GDP and housing stats were anemic.
The most logical explanation is the Fed did not like Trump’s message and got a copy in advance. Alternatively, the Fed simply decided to take a stance against Trump’s expected message.
As supporting evidence for this possibility, please consider the New York Fed February 24 article Why the Proposed Border Tax Adjustment Is Unlikely to Promote U.S. Exports.
Consider imports first. The border tax adjustment, which only allows for a tax deduction on domestically produced inputs, will increase the effective price of foreign-produced inputs that U.S. firms will have to pay. So firms that rely on imported inputs and sell predominantly in the U.S. market will be worse off, as intended by the policy. The appreciation of the U.S. dollar will have only a small impact to offset these cost increases, because U.S. imports are predominantly invoiced in U.S. dollars and the pass-through from currency changes into U.S. import prices is quite low, with estimates at around 30 percent or lower.
Higher prices on imported inputs are likely to result in higher domestic prices by both importing and non-importing firms. We provide evidence of “strategic complementarities” for Belgian firms, showing that a 10 percent increase in competitor prices leads to a 5 percent increase in domestic prices of large firms. This channel is also likely to be present in other market economies, such as the United States. For example, if there is a tax on imported steel, local steel producers can also increase their prices and still stay competitive relative to foreign-produced inputs. This will further increase the costs for U.S. firms and consumers.
How will U.S. exporters fare? An unintended consequence of the proposed border tax is that it is likely to depress rather than stimulate exports. As export prices are also invoiced in U.S. dollars, the tax exemption on export revenue will mostly boost exporters’ profit margins rather than increase their export sales. And with the accompanying partial appreciation in the U.S. dollar, the prices of U.S. exports in foreign currencies will rise. This will provide incentives for our trading partners to switch their demand away from U.S.-produced goods, resulting in lower U.S. export sales.
The sudden notion there is “surprisingly strong economic data” just hours before Trump speaks does not wash.
The most logical explanation for these out of the blue announcements is the Fed decided to preempt Trump.
Had they done so after Trump’s speech, he would have accused them of playing politics.
- Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?
- Killing the Trade Golden Goose: Farmers Rattled by Trump’s NAFTA Rescinding Plans
- GDP Unexpectedly Undershoots Consensus: What’s Ahead?
- New Home Sales Rise Half of Economists’ Expectations, Supply Surges
- Trade Deficit Unexpectedly Widens: Exports Sink, Imports Up Sharply
Those who think rate hikes are necessarily bad for gold need to consider Rate Hike Cycles vs. the US Dollar: Rate Hikes Bad for Gold?
Mike “Mish” Shedlock
The Fed (and all ther cenral banks) are irrelevant to every cohort in an economy except for an imaginary “median”/”average” of indicators that does not represent any cohort – in other words, having a median shoe size of 6.875 will fit a tiny minority of individuals. Central banks have a tendency to sponsor outcomes that resemble communist 5 year plans and are useless. I agree with the sentiments you express, Mish, except the one about the Border Adjustment Tax. The European Union, China, Japan, the UK and every other country that operates a consumption tax (e.g. a Value Added Tax of 20% by Europe or Goods and Servcies Tax) is operating a tariff barrier to US exports that (unlike domestic operators) cannot be reclaimed when on-sold, unless the US company forms a domestic entity and completes the sale itself to another buyer.
What the border adjustment tax attempts, is the imposition of a value added tax on US imports that mirrors the value added tax on US exports, without the imposition of a value added tax across the US.
The US has no value added tax at the Federal level, though it does (via Sales Taxes) at the State level.
Introducing a value added tax at the Federal level would imitate most of the world’s developed economies. All taxes are regressive and a fundamental abuse of human rights – VAT is no better or worse than other taxes.
I find it absurd in the extreme that NAFTA, the failed TIPP and TPP, plus the CETA et al fail to acknowledge the base erosion and profit shifting strategies of companies that evade value added taxes by pretending to site production in low value added tax areas.
The border adjustment tax simply “levels the playing field” of corrupt tax practices by global corporations whilst continuing to embrace the evil that is taxing anyone or any company.
It’s hard to find any tax that is not punitive. My one request would be for transparency, where every tax the consumer pays is an obvious line item. Most taxes are included in the cost of our consumption with few transparent with the exception of sales taxes. Even income tax being deducted from paychecks disguises these costs. If we were to have a border tax I would ask that the tax is presented to the consumer as a line item on their receipt. In this way the American consumer will be informed.
This is what I hate about VAT is that consumers have no idea how much of the cost that they buy is tax, and it cannot be an accident that it is constructed that way. The world is overwhelmed by taxation while having no clue exactly what it is they are paying.
All the rackets supported by government make us uncompetitive. The healthcare, education and real estate rackets make just surviving in this country expensive. I guy I know has a factory in Vietnam, he pays his workers $150 dollars a month. No regulations to set up a factory, just payoff some mayor. How can you possibly compete with that. There’s your free trade.
I suppose a gold standard would force a balance of trade, but then we would have to use a lot less oil. Its all a big game of musical global debt chairs. Trading paper for oil is the greatest con game ever. Unfortunately a lot of blue collar people in flyover country have been left out of site and out of mind.
Its quite a system that has evolved, the elites who run the system will not be the bag holders.
There is no solution where people don’t get hurt.
Stuki Moi said:
Unless so,e clever soul figured a way to turn oil into gold (but somehow not into green pieces of paper), “we” wouldn’t magically have less oil simply on account of a gold standard.
What we would have less of, is banksters, lawyers, apparatchiks, zoning laws and other harassment, regulation riding “asset owners”, and things of that ilk. With most of those above having to do a bit of, at least approximately, wealth creating work instead. Simply in order to not starve. IOW, we would have more total wealth. Plus, have much less of it being concentrated amongst the class of purely parasitic leeches that currently monopolizes it. For all those not in the favored leeching classes, that’s a double down win-win. NO exceptions.
Mike Bravo said:
“And free benefits are the problem.”
Free benefits are a part of the problem. The fact that immigration in various forms coupled with “free trade” are being used to arbitrage down the going rate of labour in the US is the bigger problem.
Yeah, I suppose I benefit from cheaper goods at Walmart, right up until I lose my job to someone in Sri Lanka and can’t even find a job swinging a hammer or cutting grass because those jobs are all going to Mexicans and Central Americans who don’t have the nut I am carrying because I have been prodded into borrowing too much to Keep America Great or some shizzle like that.
Then I guess I can go on public assistance, except that my total benefits will be capped because there are a ton of non-US persons being carried as part of the larger programme of destroying my ability to extract income from the fruits of my productive input to the system.
Lather, rinse, repeat …
The Opinion Pages | Editorial
Visions of Trumptopia
By THE EDITORIAL BOARD
FEB. 28, 2017
If there was a unifying theme to President Trump’s campaign, it was his pledge to serve America’s “forgotten men and women,” working people forsaken by the economy and Washington.
In his speech Tuesday night to a joint session of Congress, Mr. Trump presented himself as having made an aggressive start at championing the cause of working people, and promised a new era of rising wages, bustling factories and coal mines, sparkling air and water, and cheaper and better health care, all behind a “great great wall.” He told a few whoppers, but largely kept his eyes riveted to his teleprompter and his delivery subdued. He even opened his speech with a long-overdue condemnation of hate “in all of its very ugly forms.”
We heard again the same sorts of gauzy promises and assertions of a future Edenic America, a sort of Trumptopia, that characterized his campaign. He didn’t explain how he would get it all done, much less pay for any of it; indeed, it sounded at times as though he were still running for the job, rather than confronted with actually doing it. Across his first few weeks in office, Mr. Trump has shown little sign of delivering anything for working Americans beyond whatever satisfaction they may derive from watching him bait the Washington establishment and attack the reality-based media.
Mr. Trump likes to describe his chaotic first month as “promises kept.” Really? Remember how he promised during the campaign to “immediately” fix Obamacare and deliver “great health care for a fraction of the price”? He hasn’t even put a plan on the table. On Monday, he complained to the nation’s governors that “nobody knew” replacing Obamacare “could be so complicated.”
As in the campaign, Mr. Trump also promised Tuesday night to accelerate economic growth with a $1 trillion infrastructure plan. “Crumbling infrastructure,” he said, “will be replaced with new roads, bridges, tunnels, airports and railways, gleaming across our very, very beautiful land.” Sounds great. What’s the plan? How will we pay for it? He wasn’t saying. He also renewed his promise of “massive tax relief” for the middle class — but once again there are no details in sight.
Too bad that Joe didn’t hold Obama to the same standards…………
Forever is a long, long time.
I could have predicted what the NYT would write before Trumps address to Congress. It’s the same old, same old…
Yes, it’s over. It’s been a whole month and Trump has STILL not completed his administration’s agenda. He IS a failure. He may as well just go home as we KNOW that a REAL president would have been done by now…with everything, and we also know that NO president has failed to achieve his agenda….ever.
In his speech he said very little that could be construed as divisive, yet Democrats set on their hands, hissed and left early, some even failed to show up, and THEY have the never to complain of divisiveness, of HATE. These are vile and despicable people who will destroy this nation in order to sustain their agenda. They have demonstrated that they will refuse to work with Trump on anything, even those things they agree. It is a religious fervor that drives them to see Trump as the Devil, and any cooperation being in league with Hell. Progressives are religious zealots. We see them demonstrating more and more commonality with radical Islam every day. No compromise with infidels, nonbelievers, SATAN.
Oompah Whinny is thinking about running for President now. I’m sure Carlos Slime will put his full weight behind her bid.
Ron J said:
Oh, the New York Times, the paper of false record.
Maximus Minimus said:
Duh. Fake media starts to worry about how to pay for government spending. Why did they wait for sooo long?
Paul Niemi said:
The Fed finally noticed that holding interest rates near zero has made the country’s pension funds insolvent. That is forcing their hand.
The Fed always misses the mark. It’s tradition.
Steve Mcennery said:
I would like to hear your take on March 15th spending bill Mish, could this be the catalyst for the long predicted big one?
David Stockman is touting the same thing lately. Congress has a lengthy history of raising the debt ceilong. I don’t see anybody willing to change that policy including Trump. It’s same ol’, same ol’ all over again and if you can find anyone to disagree, put money on it of you can because that bet is a winner 100%.
yup – Stockman is wrong on the March 15th cataclysm. Trump is a practical
big gov’t right-of-center guy. He loves theater and provocation, but in the end he is going to change very little.
The debt clg. will be increased March 15th.
“Congress has a lengthy history of raising the debt ceilong.”
Anyone remember the bill that was passed about a year ago where the president could bypass Congress and raise the debt ceiling? I recall people complaining it gave Obama too much power at the time — congress was giving away the power of the purse. But now the shoe is on the other foot.
If so, is Congress just expecting Trump to raise the ceiling? What if Trump does not — I can see it driving him up the wall.
The administration can pay for the infrastructure costs by simply using the Fed to mark up contractor accounts in reserve bank accounts in the Fed. This is exactly what the fed did to get the GFC banks out of insolvency. Not one tax payer dollar was spent. [because taxpayer dollars do not fund federal spending]
The spending in to the economy is what grows the economy so the “cost” is matched by the rise in GDP. As long as resources are for sale the Fed can buy them.
So Trump could swap Obamacare for universal medicare without breaking the Fed. After all many other nations are not in difficulty through a medicare for all service. It would pay for itself and bring to fruition a signature boast by Trump, to serve every single American. This achievement alone would make his administration a worthy one!
Ron J said:
“So Trump could swap Obamacare for universal medicare without breaking the Fed. After all many other nations are not in difficulty through a medicare for all service. It would pay for itself and bring to fruition a signature boast by Trump, to serve every single American. This achievement alone would make his administration a worthy one!”
Pay for itself? How? The cost of Medicare has gone up some 9% a year on average for some time. Wages are not going up at anything close to that rate.
Europe happens to be in deep trouble right now. If the EU falls apart, how well is universal medical going to hold up, there?
The Fed creates debt free money. Every single dollar the Fed spends is with debt free money. Every time always every day every second. So what pays for it? The total economy pays for it and also benefits from it. These payments grow the economy its GDP etc. The more the government spends,even on useless stuff like the military, the economy grows. By growing the spending is matched with the value of the economy. There can be a disconnect if spending is too far below value [budget surpluses] or risk excess inflation if too liberal. That’s what the Fed etc have to do. They have to steer the economy between these two walls. Right now growth is anemic so spending up on infrastructure and healthcare is going to be good for the economy, as well as for the people. They should go for it!!!
By bringing a lot of troops home who volunteer change uniforms and to be seconded to the Border force for the balance of their enrollment, the President could stop all unwanted traffic across the border immediately. As the US faces no external threat at the moment, the increase in military buildup can be achieved at a more leisurely pace than just throwing heaps of money at it, particularly at people who are skilled at siphoning funds in the wrong direction.
Apart from that his speech was pretty good if it was designed to calm the muddied waters after the election. While Mish is entitled to pass his judgement, it seems he tends to agree with the points made and his rebuttals are made against the actions of the last administration.
For America and the worlds sake, give him a chance. He will make his own mistakes and it is fair enough to take him to task for those but give him time to correct the wrongs of the past.
Agreed with most of your points. But…. “and on the lack of a gold standard” is just nonsense. Gold standards failed, just like any other system failed. Because ANY system can and will be mismanaged by governments. The gold standard is just as fiat as the current system and is not going to help anyhow. The real solution is to eliminate career politicians, government borrowing, hollow promises that cannot be funded. Eliminate direct taxation. Smaller government, less taxes and as a result a lot more money in the hands of businesses and the people. That is what we need.
federal governments do not have to borrow. Assuming they did borrow to pay for something, like a pension or a missile, they would have to pay it to a lender, a bank. Now, since they create the currency under the constitution can you see that it is a nonsense to borrow federally created money it can use to buy directly the pension or the missile? Why borrow one’s own money? The government has to create the money the banks use to account for their loan credits, which is not money, just numbers in bank accounts. It’s shorthand to say banks create money, but not accurate.
Please explain why school choice is a bad idea?
Because it would destroy teachers unions. Of course the union could be saved by forcing all educational institutions receiving federal funds to unionize. Anything is possible if we are willing to payoff the unions.
Because it will exacerbate inequality in education and lead to poorer outcomes in general.
How does CHOICE create inequality? Unless you are assuming that some parents will choose poorly.
We see government run failing schools everywhere, and they have disproportionate dollars spent on them as well. The problem is one of accountability. Failing schools and failing teachers must be held to account, and as we see, our educational system is OWNED by the teachers union. We see cases everywhere where teachers cannot be fired for much of anything.
Choice is scaring the living crap out of teachers unions.
Accountability is our ONLY solution for ALL problems.
Choice creates inequality because private schools are not required to treat all students equally- i.e. they are not even required to accept all students.
If you don’t have choices you are cornered.
No. It will allow students and parents who are serious about education to escape the dysfunctional inner city schools. Many classrooms are filled with disruptive students that cannot be gotten rid of which ruins it for the serious students. My father taught in Chicago and his class was where the disruptive and/or slow children went. He was allowed to meet out discipline back then. Many of his former students thank him to this day for straightening them out. The way he was allowed to run his class then is not allowed today. So all the kids are subjected to chaos. This is why the schools fail for everyone.
So what do you do with all the “slow” children? You are still going to pay to have someone try to teach them, somewhere!
Maximus Minimus said:
It will create a generation that can think for themselves rather than being indoctrinated by the state ideology. Definitely a disruptive idea.
On balance, pretty awesome!
So many people see trump as a panacea for all their problems. He is just a strong willed hard working guy who is trying to fix things he sees broken. Enough of America voted for him to be president. He is doing a difficult job and will make mistakes. Some of what he is attempting is near impossible. Definitely some of what he does people will not like. That’s politics, it comes with the job. Like all his predecessors, he will adjust and grow into the job. Either way, get used to him, he is our president for the next four to eight years.
john clark said:
we’ve occupied part or all of Iraq for 26 years,WTF!? They never did anything to US, no Iraqis involved in 9/11 No WMD.
Bush I started this senseless petro war, O’bama promised to end it and now we have Exxon running the State Dept and Trump pumping up the military budget.Next stop Iran, liberate their oil fields next, add some persians to the refugee stream into europe
As you accurately state, our foreign policies have been a mess for years, going far back before Bush. The question is, how do you fix it? Do we really think we can just run away, say we’re sorry and just leave?
If so, we can eliminate the State department completely as we can just leave a voice messaging system in place for anyone who calls to complain.
Ideally, we should seek means of extrication from this mess and I do not believe simply leaving is the answer. Mish is constantly constructing complex reasons why the economy and trade are as they are, but has a very simplistic notion of foreign policy. Just leave….like no one ever thought of that before.
Mike Bravo said:
“Do we really think we can just run away, say we’re sorry and just leave?”
Begging your pardon, but why not? Seriously.
So we have NO responsibilities to those nations, those PEOPLE who’s worlds we have destroyed? As has been said, we break it, we own it.
We need to adopt a noninterventionist foreign policy, but we can’t just pretend that everything done this far simply didn’t happen.
Mike Bravo said:
It might ultimately be kinder (not to mention less expensive) for both sides to get on with life, starting with the US upping sticks and going home.
To your point, we actually did the opposite to the Vietnamese by turning up the heat on them after the war out of a misplaced sense of offense for their insistence on compensation for having their land turned into a moonscape and a couple million of thier people wiped out, which we dressed up as our outrage for among other things their failure to fully account for POWs, some of whom they unquestionably held back as collateral for the debt promised and owed.
We don’t appear to have done as much for the Vietnamese after the war as remorse might have suggested we should do, and despite that, the Vietnamese have done an admirable job getting on with things.
So once again, why not simply bring the troops home and deal with the blowback that might arise rather than going out and looking for it.
Stuki Moi said:
As long as “we” remains a strict superset of “me”, “we” haven’t destroyed anything. At least not willfully. Hence own and owe nothing/nobody, even according to that particular cheesy and unsupportable quip.
The fact that certain Middle Eastern subcultures insists that “we” owe them our heads because someone originating from approximately the same compass direction as “we,” once chopped the head of someone in their general geographic area during the crusades, is just pointless drivel. Useful for no more than attempting to drum to support for more wealth destruction by war.
“We” have no business being “there.” Hence “we” should not be “there.” And since “we” happen to be there now, going from being where “we” should not be, to not being where “we” should not be, means leaving. Simple.
The Russians did in Afghanistan, worked ok for them.
Maximus Minimus said:
It looked like a good place to garrison the imperial army. Now, not so much.
Terry Reiber said:
“But Trump never placed the blame where it belongs: On the Fed, on Congressional overspending, on fractional reserve lending, and on the lack of a gold standard.”
I would add to that list job-killing regulations passed by Congress. Thanks Mish!
Eric K said:
School choice should be just as positively viewed as free trade or an open health exchange market. It should also be available to every family, not just disadvantaged ones. A federal program to give tax credits would not be a mess if it applies to everyone, but it would get a bit messier if it singled families out.
Get fooled by a con artist once and you can blame the con. Get fooled over and over and you deserve what you get. Some of you are really naive- it’s sad, especially because the general self-conceit here is that we’re somehow “in the know.”
We are “in the know”. We know that we are bankrupt as a result of failed socialist policies that only sponsor a growing welfares state – inclduing the banking sector. Trump is the chance to turn this around, starting with creating a trade surplus. If his attempts fail, then fine. I don’t see anyone else trying to correct imbalances in the economy that has already hit the wall.
there is just 20 billion to go to reach 20 trillion – that will happen in a few weeks. perhaps there was no way to save the titanic, but there may be course corrections that can at least start climbing the wave that is the perfect storm of entitlements for no work, enabled by fiat money printing by the Fed.
the question is, “where do we get 6% nominal growth (2% CPI + 4% real growth) from?” that works out at 1.2 trillion a year – or 6 trillion over 5 years. a winner would know and think bigger than a socialist that can only spend other people’s money.
Mish, if manufacturing jobs are not returning, what will be our jobs in the future? Technology is eliminating jobs far faster than creating them, as is importation of cheap goods. Manufacturing is one of the few industries that has physical presence that cannot be easily outsourced. Everything done on a computer can be done anywhere, and as such is very fluid.
Are we simply done? Should we stop resisting,abandon hope and just accept our fate?
I see no indication that technology will save us. If we are too good to work, to labor, to struggle, if we are too entitled to compete, then you are right. Those jobs will NOT be returning. NOT because those jobs are not available, but because we are not willing to do them. How will this entitlement be sustained? Who will we tax to support this. If we are to stop illegal immigration and its cheap labor supply for the work we are too good to do, how will it get done? Where is the supporting math, or is it all based upon an ideology and faith that somehow, some way, we will be saved?
Maybe mega corporations ruled by big hearted progressives will simply apply their assets towards creating technology and automation that will provide all of us with virtually free products and services forever. But will they also provide to the deplorables?
I have already said I do not know where the jobs will come from. Nor does anyone else. 90% of people used to be employed on farms now it is 2%. Did the jobs come? Did anyone know from where?
Ron J said:
“90% of people used to be employed on farms now it is 2%. Did the jobs come?”
Farm jobs migrated to city jobs. Now city jobs are disappearing, with AI/robotics.
Chinese farmers moved to the cities to take factory jobs we lost. Now Foxconn replaces them with robots. Zero Hedge headline today: “China Warns It Must “Reallocate” Half A Million Unemployed Workers.” It talks of previously laid off workers becoming China’s equivalent of Uber drivers. With self driving cars in the future, those jobs will disappear as well.
This time it isn’t that technology is creating new jobs to replace old. New technology is creating technology that is replacing workers altogether.
AMERICAN (((SIM))) 🐸 🇺🇸 🇮🇱 said:
Wow you are really coming across like an opposition douche instead of an honest analyst on this one, Mish. Blaming Trump for Vietnam, really? 😂😂😂
Nothing even mentoned about enforcing existing anti-trust laws against the healthcare industry. We are doomed.
Karl Dennison keeps mentioning the same thing. (marketticker.org).
Karl Denninger. Yes, I was about to say the same thing.
Karl Denninger, the ranting and raving weirdo who can’t make a single post without talking about gay anal sex. And you guys complain about “fake news” when it comes to actual news sources, LOL.
If free market was allowed to work in healthcare by requiring that hospitals and medical imaging centers and doctors offices would have posted prices that would be same for everyone like car repair shops and hairdressers and every other profession and company are required to do apart from healthcare then the prices would be transparent and there would be PRICE COMPETITION once starting of hospitals and doctors offices and medical imaging centers would be made possible next to existing ones instead of the politicians coddling LOCAL MONOPOLIES.
The price of healthcare will drop 60%-80% if there is posted prices and equal pricing for payers in cash or health insurance and there is FREE COMPETITION and this would make Obamacare UNNECESSARY because there would be free market options that would be affordable in health insurance for complete packages and many people could have just catastrophic insurance and pay regular healthcare with cash or creditcards.
Health insurance is expensive BECAUSE healthcare is operating in a quasi-monopoly because of local monopolies and monopoly-like behaviors by hospitals, doctors offices and medical imaging centers.
When ILLEGAL immigrants would be sent home american taxpayers would no longer have to pay the hospital and doctor costs for 15-20 million illegals through hospitals charging americans more to pay for the free healthcare they are required by law to provide for illegals through EMTALA.
This would further lower prices for healthcare and thereby health insurance.
If drug price couging of americans would be stopped by requiring same prices for americans that drug companies sell drugs to Canada and Europe then the total cost of healthcare would drop 90% and this would cause a boost in other consumer demand and give US companies much better profits in all other industries than healthcare and also save many retirement funds and local governments from bankruptcies that are partly caused by high price of healthcare.
Mish, I like this post. I particularly like the format of this post. It keeps the focus on each issue, one at a time, rather than on Trump the person.
“Keeping it affordable while honoring pre-existing conditions will not be easy.”
The intentional Achilles heal which will obstruct reform. Honoring pre-existing conditions is like allowing me to buy home owners insurance AFTER my home has burned down. Ridiculous. That’s not “insurance.”
He did a great job. Whoever wrote the speech deserves a raise. It was nice seeing him speak in complete sentences for a change.
Federal employees at all or almost all agencies are anti-Trump. Government workers in aggregate will do what they can to make Trump look bad. Federal employees only objective is to keep their jobs. Anyone who risks that is the enemy.
Few points to add to an otherwise balanced post. First one is that when it comes to the FDA you’re making a trade off between safety and speed of drug approval. I’m familiar with clinical trials and the resources it takes to make sure a drug won’t cause unecessary harm. It’s easy to say (especially from a libertarian point of view) get rid of or reduce the FDA red tape. But from a medical and scientific point of view, things are not that easy. Human lives are affected by these decisions.
Second point is that care for the elderly and disabled is by far the biggest percentage of healthcare spending. Price gauging, upcoding, and system waste are other factors. Someone in the comments section discussed illegal immigrants consuming healthcare resources. In the bigger pictures it’s a small percentage that would quickly be outweighed by the resources needed to find and remove them.
Third comment is insurance across state lines sound attractive at first. But in practice it’s not going to work well. Acturarially fair pricing is based off of being able to mathematically model risk in the populations being served. The health insurance market behaves differently to others because unlike buying a car, most of us don’t decide to get cancer or have diabetes.
Truth seeker said:
Yes like many of you I’m disappointed as he raised expectations so high while our problems r so immense things are just going to get worse. Trump has a situation where he has inherited the 20 trillion dollar debt, drug and porn addiction, productivity falling, in a deflationary world where good jobs are going to continue to vanish. Ok he sounded presidential and stocks are making new highs but how is he going to ramp up economic growth with consumer, corporate and government debt at New all time highs and the country still so divided I just don’t see it happening.
Al Tinfoil said:
1. The War on Drugs has been a huge success. It allowed massive expansion of police state power; provided the greatest system of “agricultural” price supports ever invented; protected tax revenue from the booze business; gave a monopoly on cocaine imports to the CIA; allowed the CIA (with help from the US military) to achieve record opium production in Afghanistan; provided huge profits to major US banks as they laundered drug profits; and provided huge contributions to political players (research Mena Airport and Clintons in Arkansas). And allowed corporations to earn huge profits from privately-owned prisons, and allowed some police and “justice system” actors to get bonuses for each person sent to such a prison.
The War on Drugs has been a major contributor to US GDP growth. Bullish!!!!!
2. The Federal Reserve is the greatest looting operation ever suffered by the USA. A privately owned bank gets the sole right to produce US money, at no cost and backed by nothing, then gets to rent or sell that money to the US government and people, while controlling interest rates and the money supply. And Congress made it legal in spite of obvious Constitutional provisions against it. A Mafia chief could never in his fondest dreams come up with a better crime.
3. Health care in the USA can never be made cheaper as long as: it is provided by for-profit service providers and insurance companies; big money controls politics (see Citizens United); the plaintiff’s bar (ambulance-chasing lawyers) and juries are allowed to produce judgments for astronomical amounts; health care providers practice “defence” health care by ordering every possible test to defend against claims they missed something; the American people are preyed upon by Big Pharma and take poor care of their own health; problems linked to vaccinations continue to be ignored; thousands of US military personnel continue to return from foreign wars each year with physical injuries and PTSD; the US population gets older on average; and everyone feels entitled to instant cures for every itch and ache.
Have a nice day, folks.
“According to the National Academy of Sciences, our current immigration system costs America’s taxpayers many billions of dollars a year.”
A drop in the bucket. Jobs lost to low cost illegal immigrant laborers who work hard and can’t complain about working conditions, perhaps more important.
However, EVERY other negative impacts pail in comparison with THE problem with uncontrolled immigration for anyone who wants to prevent this nation from becoming a socialist EU-style nanny state – the permanent and continuous leftward movement of the country’s political demographics caused by a poor and, therefore, government dependent constituency with a very high birth rate who vote 70% Dem. Muslims also vote 70% Dem, but their demographic isn’t as dangerous POLITICALLY because their numbers are vastly smaller.
This is why the Dems and their lapdog media are going NUTS – had they won as they so clearly expected to do so in the last election they could have, through amnesty and lack of border control, virtually locked up their hold on the POTUS and also owned the SCOTUS through appointments. This time, only the electoral college and their lousy candidate choice stood in their way.
Michael Rudmin said:
Mish, you said that exiting the TPP was right idea for the wrong reasons…. I’m going to say that it is perfectly fair to say that cronyism moves assets from productive to nonproductive, and the first effect of that is therefore that it kills jobs; therefore, TPP was BOUND to kill jobs.
I’m going to suggest that it is possible that even NAFTA was too heavy on the cronyism. WTO, definitely was.