economy

While I’m glad President Trump wised up and paused the tariffs, I’d have been much happier if he’d canceled them outright. But the whole activity—indeed, the past week’s worth of financial news coming out of the White House—points out that we don’t have a thoughtful, considerate person sitting in the Oval Office. We have a capricious, egotistical fool. And while such a person is not normally dangerous, the fact that he’s the president of the United States gives his every utterance global import.

I have to wonder how much of his decision process was driven by a recognition of the global pain he’d caused, and how much of it was yet another misuse of governmental power for his own financial benefit. A week ago, he started a global trade war all on his own (on the flimsiest of reasons and with absolutely execrable math to justify it). He continued harping on his attacks for a week. Last night, he told us he was thrilled with how other countries were “kissing his ass” to negotiate lower tariff rates (all class, that president of ours, just not high class). And just after 9:30 this morning, he apparently truthed out [is “truthed” the word for tweeting on his proprietary Twitter competitor?] “THIS IS A GREAT TIME TO BUY!!! DJT.” He followed it up with “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”

Remember, this is the only presidential candidate in a generation to not release his tax returns, and the only president in memory to not divest himself of his non-presidential businesses. Will we ever know how well he and his super-wealthy buddies did today after he “paused” the tariffs and popped the stock markets more than we’ve ever seen before?

I don’t think he knuckled under, and I don’t think he’s stupid. I think he’s an excellent grifter, and he’s just pulled off a brilliant scam for himself and his friends. For those of you not seeing it: he depressed the price of almost every stock in the US by fifteen or twenty percent, in one week, giving his cronies a great chance to buy. And today, he popped those prices back up ten percent.

He’s in the Oval Office to steal as much as he can, and he’s doing a pretty good job of it.

Are there any other financial geeks out there with long memories?

I was watching Fed Chairman Jay Powell’s press conference today (after the release of the Fed statement), and kept experiencing cognitive dissonance each time he said something like “we want to get inflation up to two percent or a bit more.”

I think (think) I understand the need for inflation, but one of my earliest political/economic memories is Gerald Ford’s WIN campaign. It wasn’t about electoral victory; it stood for “Whip Inflation Now.” All through those years, the constant struggle was to get inflation down. That it was way too high.

And I guess, without consciously thinking about it, I subconsciously assumed that inflation is bad, and straight-line value, year to year, is good.

Now, listening to the Fed, I’m assuming the need for a little inflation is to justify annual salary raises, to justify low-level price increases, to justify paying interest, and so on. If a dollar today was worth precisely what a dollar was worth ten years ago, any company paying its employees raises would be losing money every year.

At least, that’s my assumption. Anyone else out there have a better explanation for why the Fed thinks we need to have some low level of inflation?

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Ian Randal Strock

Pump-and-dump, the Trump way

When did inflation become good?