By Denny Gulino
THE WHITE HOUSE (MaceNews) – On a very quiet Friday, a broader look at the world of Donald Trump, a man grappling with the responsibilities of the presidency, reviled, loved and day-by-day engraving the record of his performance in the history books of the future.
It’s a day in which the president has yet to attack the Federal Reserve or ridicule its leadership – although other adversaries were not so lucky – and about 18 hours after, in an unusually magnanimous observation, he praised the Democratic candidates for president. He said he respected every one of them for their “courage” in running for office. So it is as difficult as always to fully characterize the Trump phenomenon.
The organizational chaos obvious to anyone who cares to look at the Trump administration may not be the eventual bottom-line judgment of those history books yet to be written. When one of the many ‘acting” administration executives tells reporters of a policy only to be contradicted by Trump hours later it no longer makes headlines or even raises eyebrows, in the press corps or on Capitol Hill. How important is it?
It happened again, incidentally, earlier this week when the top Customs chief said one thing about the treatment of Bahamas storm refugees and Trump then said the opposite.
The day after Trump tweeted how the Fake News enemies of the public were always making up stories about nonexistent turmoil in the White House, there was more turmoil in the White House. The national security adviser didn’t show up for a scheduled briefing in the White House press room and never will again. Trump said he asked for John Bolton’s resignation. Bolton said he offered it first without having it requested. There was no permanent successor immediately available.
Day to day chaos, however, does not necessarily destroy a presidency. To which any number of analysts would quickly reply, failure to adjust and remedy the chaos might.
At the “ropeline,” that delineates where all the camera crews can set up their stepladders and tripods and hold their “sticks,” the fuzzy ended extendable microphones, there’s often jostling as dozens of people covering the news squeeze in the small space available.
Every time the president is departing for a rally or any other trip, as he did Thursday evening and may do on successive days, the reporting crowd is allowed through the doorways to the South Lawn. They scramble into position. And then they wait.
Trump is usually slow to appear and sometimes can be seen through the distant windows of the family residence pacing. Sometimes there’s a cry from someone in the crowd, perhaps atop the aluminum stepladder that allows some height so that lens doesn’t just pick up the back of someone’s head, “He’s tweeting.”
Eventually – perhaps 20 minutes later than scheduled – the president, usually alone, makes the long stroll down the driveway, clearly relishing the scene, approaching the rope line and then starts talking. Always the helicopter, Marine One, is nearby, making a lot of noise as it waits to take off. The microphones have to be held close to the president, just below the camera frame, to avoid it.
Thursday evening his first words, as reported by Mace News, were to observe how well the market was doing, with stocks again near record levels. Perhaps cognizant of what a buzzkill for the markets it would be to deny the story of the day, as some unnamed official had done before him, he instead said of all that speculation about some “interim” agreement with the Chinese negotiators next month: it might happen, He did say he would rather have the “whole deal” but nevertheless kept the agreeable scenario alive. As again Mace News reported, he said, “It’s something we would consider, I guess.”
The ratio of reporters to camera crews varies on the ropeline and Thursday evening that ratio favored the cameras. The hour also meant it was a struggle to get the video on the network news a half hour later. The White House did not bother with a transcript. The result was it was one Trump departure that did not get very high profile coverage, for better or worse. There will be many, many more in the weeks and months ahead.
Overnight, there was more good news on the China front, as the state news service Xinhua reported a seemingly reciprocal goodwill gesture from Beijing, the promise of tariff exemptions for U.S. soybeans and pork after all. Yet China’s agricultural purchases are carefully tracked and they have already shifted to other country suppliers, particularly Argentina. So experts wonder if the supply-line disruptiions that accompany tariff wars are that easy to manipulate.
Trump agreed to postpone for two weeks the 5 percentage point increase in the tariffs level that was to be imposed Oct. 1. It was a small gesture in the context of all the 2019 tariffs to cover virtually all China exports to the U.S. but significant in the run-up to October negotiations.
The stock market thermometer of relations with China was not as hot Friday as on Thursday. Three stocks were up for every two that were down and the indices moved very little. There will be many opportunities to once again get enthused about apparent trade breakthroughs before China’s negotiators – this time including the head of the central bank – appear in Washington sometime next month. There may also be opportunities to be disappointed if things ultimately don’t work out.
From time to time analysts wonder if they really understand what is the U.S. set of goals in the China talks. Economists say that given the overall trade deficit is driven by the gap between American spending across the border and what the country produces, that no amount of tariffing will cut the total deficit unless the U.S savings rate – including government – gets a lot stronger. Trade shifted from China goes somewhere else and so the trade deficit is redistributed, not eliminated.
Trump Thursday evening told the ropeline denizens for the umpteenth time that China has ripped off the United States to the tune of hundreds of billions of dollars – varying between the actual deficit of $350 billion a year to Trump’s favored $500 billion – without explaining in what sense that happened. Paying billions in exchange for goods at bargain prices is not in itself predatory, the economists say.
Still many analysts sum up the known factors, the upcoming presidential election that makes economic peace a priority, the need of the Chinese for pork – a need so great it relates to domestic tranquility – to replace that devastated by swine flu, the degree to which U.S. business is enmeshed in China, the need of China’s leadership for precious U.S. semiconductor suppliers for its telecoms like Huawei – and much else. Many conclude any rational resolution of the trade conflict is in everyone’s interest and so must happen. Of course, they’ve been wrong before.
Relatively few people know the details of government policies or other macroeconomic realities, or the real difference between the payroll tax cut that briefly had an Oval Office future, only to be replaced by a vaguely defined middle-income tax cut package 2.0.
Relatively few paid any attention to the August budget deficit figure reported next door to the White House Thursday afternoon, a year-to-date total from Treasury that topped $1 trillion. This month is the final month of the government’s fiscal year and it usually turns in a surplus, offsetting the red ink from the rest of the year. So fiscal 2019 might not break the trillion-dollar mark. But every estimate is that it will next year, and the year after that and on and on as the national debt piles up. As a percentage of GDP, the better measure, annual deficits are moving toward 4.8%, which the Congressional Budget Office says is “well above the average over the past 50 years.”
And the accumulated deficits, the U.S. national debt? It’s growing toward 95% of GDP by nine years from now. American prosperity how become dependent on debt, at the same time China has accumulated trillions in reserves, the opposite of debt, all of which will be engraved in the history books as well.
Veering back from that digression to return to Trump, much has been made of his aversion to making adjustments. Whether his presidency is the success he says it is, again on Thursday evening describing it as perhaps the best ever, or whether it badly needs changes and evolution, history will likely pay attention to outcomes rather than style. Dogged stubborness and a refusal to heed advisers can be seen as a huge virtue in retrospect – or a fatal flaw.
While again relatively few people know the details they do gradually form opinions and get a sense of how things are going, whether the near-term future is brightening or not. That process never ends and it tends to manifest itself only in spasms and at decision points, like elections.
As analyses of presidencies usually end, so will this one. Time will tell. And by the time that happens it will be too late to change anything. In the present all there are to see are the data points, the latest positive consumer sentiment results, the day’s positive retail sales report, Thursday’s ultra-low initial jobless benefit claims total.
About initial claims, the most current of data points, it’s unsettling to look at the charts over the last two recessions that show claims were fine even after the point that it was later determined the recessions had begun. Then the charts take off. Claims skyrocket. In the beginning, however, recession had crept up unbeknownst even to the experts.
Finally, the Federal Open Market Committee announces its decision on Wednesday whether it cuts the shortest of short rates by another quarter point. Market certainty is slipping about that rate cut, with the CME Fedwatch Tool showing it down to 84.2% from yesterday’s 88.8%. That nagging question – that if negative rates are a distortion, why move in that direction – keeps surfacing.
For those who listened closely to Thursday’s press conference by European Central Bank President Mario Draghi, they may have looked past the rate cut and the continuation of QE to hear what he actually said and what his Governing Council decided, that the era of rate cuts and QE must give way now to fiscal policy solutions. It’s an era that’s run its course.
In the U.S. credit markets, yields Friday were reaching six-week highs.