America 3.0

Jeffrey Epstein’s Death in Federal Custody, the Suicide of Federal Government Credibility

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The announced “death by suicide” of Pedo-Pimp to the Powerful Jeffrey Epstein in Federal government custody while;

  1. On a 24/7 suicide watch,
  2. After his first “suicide attempt,”  in late July, and
  3. Before there was any time for a real autopsy…

…is such utter horse manure as to utterly destroy any shred of credibility of the Federal government.

That Federal Attorney General Barr first called for an FBI investigation of Epstein’s death — to deafening loud round of public rasp-berry’s.

Then he followed that credibility destroying knee jerk response near seconds later by saying the Department of Justice Inspector General would conduct the investigation — given the non-prosecution of so many in the DoJ & FBI after the IG caught them red handed leaking FISA surveillance sources and methods to the press — amounts to an “Eff-U” slap in the face to the General Public.

This is pure “Pravda Reporting on Chernobyl” territory.  It’s all about elite posturing and “Face” while the radioactive pile burns.

America functions on the consent of the governed.  This requires the government be credible through elite replacement by elections as well as the fair administration and enforcement of justice for both the powerful as well as the least of us.

The circumstances of Mr Epstein’s death are such that I’ve completely lost any faith in the concept of “Justice” that in any way involves the institutional FBI or Department of Justice.

I hate saying that because it leaves us here:

“Those who make peaceful change impossible make violent change inevitable.”

That Rubicon has now been crossed. G-d help the people of these United States.

Please comment and tell me I’m wrong.  I’m in the mood to be lied too.

Our ‘Xanatos Gambit’ President’s Energy Export Strategy Tree

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In my last post — President Trump’s ‘Xanatos Gambit’ Trade Policy — I spoke to how President Trump has set up his political strategy on trade policy to make any outcome on the USMCA Trade agreement that he negotiated to replace the NAFTA agreement would be to his advantage over House Democrats and the “purchased by the multi-national corporation China Lobby” GOP Senators.  In this post I am going to lay out President Trump’s “Global  Energy Dominance” export policy’s “Xanatos Gambit” strategy tree vis-à-vis the 2020 presidential elections.

To start with, I’m going to refer you back to this passage from my last post on how the Trump Administration is “gaming” economic growth measurements:

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

The Trump Administration upon coming into office in January 2017 had a huge windfall of energy projects that the Obama Administration had held up approval of in the Federal Energy Regulatory Commission.   This windfall neither began nor ended with the  Keystone XL oil pipeline.  There was a whole cornucopia of oil and natural gas energy infrastructure projects that Democratic Party interests, only some of them environmental, that the Obama Administration was using the FERC to sit on for a whole lot of reasons that I refer to as “The Economic Cold Civil War.”

While the media was spending a great deal of time talking about things like the Congressional votes to open the Arctic Wildlife Refuge in the early days of the Trump Administration’s energy policy implementation.  President Trump spent a great deal of his early political capital on getting his earliest political appointments through the Senate to the FERC to get those projects turned loose as a part of President Trump’s “Global  Energy Dominance” export policy.  The first fruit of this export infrastructure energy policy focus started paying off with the  Louisiana Offshore Oil Port (LOOP) coming on-line in 2018.  See this Apr 16, 2019 article by Julianne Geiger at Oilprice.com:

U.S. Doubles Oil Exports In 2018

The United States nearly doubled its oil exports in 2018, the Energy Information Administration reporting on Monday, from 1.2 million barrels per day in 2017.

The 2.0 million barrels of oil per day exported in 2018 was in line with increased oil production, which averaged 10.9 million barrels per day last year, and was made possible by changes to the Louisiana Offshore Oil Port (LOOP) which allowed it to load VLCCs (Trent Note: Very Large Crude Carriers) .

The changes to LOOP and to the sheer volume of exports were not the only changes for the US crude oil industry. The destination of this oil shifted in 2018 as well, and even shifted within the year as the trade row between China and the United States took hold.

Overall, Canada remained the largest buyer of US oil in 2018, at 19% of all oil exports, according to EIA data. During the first half of 2018, the largest buyer of US crude oil was China, averaging 376,000 barrels per day. Due to the trade row, however, US oil exports to China fell to an average of just 83,000 barrels per day in the second half, after seeing zero exports to China in the months of August, September, and October.**

[**Please note above the nice thing about energy exports is how futile a energy user embargo is against it.  China’s economic embargo of US crude products only hurt itself.]

The impact of the Trump Administration’s energy export policies from those early days of his administration in terms of liquefied natural gas (LNG) export facilities are now impacting the American economy. A large part of the extra 0.7% GDP growth achieved over the 2.5% Wall Street forecasts in the first quarter of 2019 came from the Corpus Christ 1 and Sabine 5 LNG export facilities coming on-line in late 2018 and making their first full export capacity quarter in Jan – Mar 2019.  The Cameroon 1 and Elba Island 1-6 LNG export facilities were also scheduled to come on-line in Late Feb-Early March 2019, and were very likely large contributors to LNG export surge.

This is how CNBC described 2019’s 1st quarter:

Robust demand for Texas oil and gas in the first two months of 2019 pushed the state’s export activity into high gear, strongly outpacing the national rate and contrasting with a slight decline by California.

Texas represented nearly 20% of all U.S. exports in the January-February period while California accounted for roughly an 11% share.

California has seen its share of total U.S. exports fall in recent years while Texas has been growing its share due mainly to the new oil boom.

CNBC table of US Exports in the 1st Quarter of 2019 Source: https://www.cnbc.com/2019/04/25/texas-exports-boosted-by-oil-rise-3-times-faster-than-us-increase.html
CNBC table of US Exports in the 1st Quarter of 2019  Source: https://www.cnbc.com/2019/04/25/texas-exports-boosted-by-oil-rise-3-times-faster-than-us-increase.html

And this is only the beginning for the US economy in 2019. See the following text and LNG export facility graphic from a Dec 10, 2018 report by the US Federal government’s Energy Information Administration:

U.S. liquefied natural gas export capacity to more than double by the end of 2019

U.S. LNG exports continue to increase with the growing export capacity. EIA’s latest Short-Term Energy Outlook forecasts U.S. LNG exports to average 2.9 Bcf/d in 2018 and 5.2 Bcf/d in 2019 as the new liquefaction trains are gradually commissioned and ramp up LNG production to operate at full capacity. The latest information on the status of U.S. liquefaction facilities, including expected online dates and capacities, is available in EIA’s database of U.S. LNG export facilities.

EIA projection of Liquefied Natural Gas Export Capacity from 2016 - 2021. Date of projection Dec 2018
EIA projection of U.S. Liquefied Natural Gas Export Capacity from 2016 – 2021. Date of projection, Dec 2018.

Given the above information, barring a war or serious election year intervention to kill the economy by the Federal Reserve, the cascade of LNG export infrastructure coming on-line in the 2nd and 4th quarters of 2019  will mean something on the order of a full percentage increase in GDP growth (in a range of 4.0% to 4.5%) in Jan – Mar 2020 over Jan – Mar 2019.  That is what going from 3.6 billion cubic feet per day (Bcf/d) of natural gas export capacity to to 8.9  Bcf/d in Dec 2019 does for you.

This extra 1% GDP will be happening just in time for the Iowa caucuses and New Hampshire primary.

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President Trump’s ‘Xanatos Gambit’ Trade Policy

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I’ve written previously in my column “President Trump’s ‘Xanatos Gambit’ Government Shutdown” of President Trump’s tendency for building political strategy trees were every possible outcome is to his advantage. (See the “Xanatos Gambit” strategy tree example in the figure below)

 

https://static.tvtropes.org/pmwiki/pub/images/XanatosGambitDiagram_7509.jpg

This is a decision diagram example of a “Xanatos Gambit.“ Source: https://tvtropes.org/pmwiki/pmwiki.php/Main/XanatosGambit

It very much looks like President Trump has done the same thing with the Democrats and “China lobby” GOP Senators with the post-NAFTA US-Canada-Mexico (USMCA AKA “You Smack-A”) trade agreement and the US economy.

THE US ECONOMY, NAFTA & USMACA

The key thing you need to understand regards NAFTA and American manufacturing is that NAFTA was geared to allow the “China lobby” of multinational corporations to use Canada and Mexico as an “international arbitrage opportunity” for Chinese slave labor wage manufactured goods to be assembled at Canadian and Mexican production facilities and avoid American tariffs.

Multinational corporations exploiting this “international arbitrage opportunity” was “The Great Sucking Sound” that Ross Perot talked about which killed the US domestic refined metals industry and hollowed out middle class manufacturing jobs in the American economy.

President Trump’s USMCA removes that “international arbitrage opportunity” via original 75% North American manufacturing content requirements for metals and intermediate manufacturing goods as well as a Mexican minimum wage rules on the order of $15 an hour for automotive parts assembly.

In response the “China lobby” has been paying large campaign contributions to both House Democrats and “free trade” GOP Senators to try and keep NAFTA, as well running info-war spots everywhere in the corporate media and “movement conservative” publications/media outlets about the benefits of “free trade.”  This has resulted in public statements by Speaker Pelosi that the House does not intend to vote for USMCA.

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

First point, the USA will be a net energy exporter — of oil, natural gas & coal combined — in 2020 if it isn’t one already.

Some rough numbers:  In 2012 US oil production was ~8 million barrels a day, all for domestic consumption, and in 2019 it is 12.6 million with some exports.  Today’s US oil consumption is 20 million barrels a day.  That increase in oil production that has reduced imports of oil by a net of 4.6 million barrels a day has also been accompanied by the displacement of coal and oil in both electrical production and manufacturing by cheaper natural gas, thus freeing both the coal and oil not used to be exported. This combined economic change since 2012 alone is worth a 1% increase in GDP growth a year compared to 2012.

Second, the Trump administration’s systematic and sustained attack on Obama era federal regulatory growth is reducing business compliance costs particularly in the energy sector for new infrastructure projects.  These are the “anti-green” actions the Democrats accuse the Trump administration of.

Third, the Trump administration/GOP tax bill, in addition to increasing spending power for the middle class, has had a huge -YUGE- reduction in capital gains taxes and a one-time break in repatriating overseas capital holdings. This has made America a much more attractive place to hold and invest money.  Particularly for energy companies like Exxon, which are dropping this foreign capital inflow into the Permian basin for oil and natural gas fracking and energy export infrastructure from the Permian to the Gulf Coast.

Finally, in terms of trade and tariffs, President Trump’s tariffs on Chinese steel and aluminum combined with the business implications of USMCA rules have made further investment in Canadian automotive plants a net loss position.  American metal content is now economically competitive for energy sector infrastructure and automobile parts such that US Steel among others are reopening US metal plants.

Taken together every part of the GDP equation has been directly affected by the Trump administration macroeconomic policies to get that 3.2% GDP number.

This is where the Xanatos Gambit for USMCA arrives.

Things will be worse for the China lobby without a vote on USMCA than with one.

Short form:

NAFTA is dead regardless of any action or inaction by the House.  All the House and Senate can do is not vote on USMCA.  The legislative branch cannot revive a NAFTA trade agreement the federal executive has withdrawn from.

This means without a signed USMCA trade deal Pres.Trump can — and will — lay on even more tariffs on the multinational corporations playing price arbitrage in Mexico and Canada between Chinese and American manufacturing.

While such trade sanctions can reduce the American economy like a tax increase, when we are likely at close to 4% economic growth in late 2019 to early 2020 from the accumulated investment in energy projects bringing defacto energy independence, a 3.5% economic growth rate with tariffs is still pretty good.

And when the House refuses to vote in USMCA, NAFTA still dies.

Pres. Trump can and will lay on new massive new anti-Chinese tariffs on Canadian and Mexican front companies for China without USMCA rules.  This will be massively popular in the Midwest in an election year and will hurt the income streams of the multi-nationals supporting the Pelosi Dems and McConnell RINOs.

From Trump’s point of view, What’s not to like about America’s manufacturing base employing the Midwestern white working class growing while the “international arbitrage opportunity” of China’s slave labor economy contracts?

 

Donald Trump’s Jacksonian Revival Presidency

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It was hard for the transnational progressives that dominate American politics and media empires to understand in their gut either President Trump’s successful 2016 campaign or his 2018 campaigning, because Trump’s campaign “dog whistles” are outside their frame of reference. The reason why is that the Trump political phenomena is very much Trump being a “fire and brimstone preacher from the non-denominational Low Church of American Exceptionalism” in the midst of the PC dominated American High Church outlawing displays of the American flag on Cinco De Mayo for “reasons of diversity.”

Two examples for your consideration:

1) My wife found this article below for me, because she is better at spotting the American fundamentalist Christian Right’s symbols than I.

Donald Trump and the Evangelical Vote
By Emily Johnson
December 8, 2015

And herein lies the political genius of Trump. Without tying himself to any particular group, Trump has captured the populist rhetoric of the most conservative elements of the GOP base. He spoke for more than 45 minutes in Knoxville and hardly referred to religion at all, focusing instead on issues related to immigration, defense, and trade. But religion was not absent from the event. It began with a prayer, given by a local law enforcement officer, beseeching God to bless America with a “guiding hand of direction” and a “guarding hedge of protection.” Corum, the 92-year-old first-time voter who warmed up Trump’s audience, also had a great deal to say about good, evil, and God. The United States, she said, “ought to be like it should have been in the beginning” when God bestowed a special blessing on the nation.
 
But direct appeals to religious rhetoric are less important to Trump’s campaign than is his appeal to far-right voters as a brutally honest man who is only a reluctant convert to the world of politics. For these voters, Trump is like them: a passionate American who was compelled to become involved in the political realm because of his commitment to return the nation to the way it ought to be.

 

This is the founding myth of General George Washington coming to the Constitutional Convention as the American republic’s Lucius Quinctius Cincinnatus, and then dropping the reigns of power to return to Mt. Vernon for a second and final time.

Emily Johnson’s article is really good, and you should read it in full after seeing the following:

2) This video of a performance of the “USA Freedom Kids” at the beginning of a Trump for President campaign rally.

As a military kid, that performance pulled so many of my strings that I knew immediately that;
a. I was being purposefully manipulated by the symbols I grew up with, and
b. I loved it anyway.

Trump’s political rallies then and now are revival meeting of American exceptionalism for America’s Scots-Irish, and extended by assimilation, white ethnic  Jacksonian faction.

This style of campaigning is 180 degrees out of phase with traditional negative campaigning, which is to paint other candidates as the enemy of you and yours — “OTHER.”

Trump’s campaign rallies have been about affirming Jacksonian tribal identity in much the way Slobodan Milosevic of Serbia did and Putin of Russia is currently doing in Russia.

The issues that Trump has chosen to run and govern on are all about American blood-and-soil nationalism at the expense of international politics and trade. And President Trump has been painting himself in the traditional role of Cincinnatus & George Washington coming down from his estates to set right the ills of the Republic.

The transnational progressives that dominate the political parties of the West simply cannot compete with this American tribal identity stuff because they are not nationalist.

National identity is outside their frame of reference. So are appeals to them.

Too Pessimistic

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The Origins of Our Second Civil War by Victor Davis Hanson.

The first half of this VDH piece seems over-the-top. Would the intermarriage and cultural assimilation that he cites in his next-to-last paragraph be happening if the situation were as bad as he thinks? Or is the country mostly culturally sound but burdened with dysfunctional elites dominating politics, big business, the universities and the media.

This part is good:

Again, Obama most unfortunately redefined race as a white-versus-nonwhite binary, in an attempt to build a new coalition of progressives, on the unspoken assumption that the clingers were destined to slow irrelevance and with them their retrograde and obstructionist ideas. In other words, the Left could win most presidential elections of the future, as Obama did, by writing off the interior and hyping identity politics on the two coasts.
 
The Obama administration hinged on leveraging these sociocultural, political, and economic schisms even further. The split pitted constitutionalism and American exceptionalism and tradition on the one side versus globalist ecumenicalism and citizenry of the world on the other. Of course, older divides — big government, high taxes, redistributionist social-welfare schemes, and mandated equality of result versus limited government, low taxes, free-market individualism, and equality of opportunity — were replayed, but sharpened in these new racial, cultural, and economic landscapes.

The rest of the piece is also good and points out how the country’s situation might improve. “A steady 3 to 4 percent growth in annual GDP” doesn’t seem very far from where we are. University reform seems likely as the public increasingly catches on to the corruption and excessive costs of higher education. Race relations seem to improve when not politicized. Spiritual and religious reawakenings happen every few generations.

Keyboard trash talk and dark speculations about violence and civil war are not the same as actual violence. They might even be safety valves to release transient passions, cautionary tales, for everyone outside of a tiny lunatic minority. (The lunatic minority who are spurred to action by online/media hype are a serious problem, but not mainly a political one except as regards public and hence political unwillingness to force treatment on recalcitrant individuals with severe mental-health issues.)

Today’s political violence is a problem but not one at the level of 1968 much less 1861. Almost all of the action now is in the political realm. There is little reason to expect an intractable impasse on a fundamental issue as in 1850-60 over slavery. There is no substantial constituency favoring civil war as there was in 1861. The modern federal government is huge, profligate and obnoxious, but risk-averse deep-state bureaucrats and crony-capitalist opportunists aren’t going to take physical risks to defend the status quo. The political process still responds to public concerns about governmental overreach, which is probably a large part of why Trump was elected. There is also enough collective memory of the last civil war and its awfulness to discourage enthusiasm for a replay from anyone who is sane.

None of this is to say dire predictions won’t come to pass, but that’s not the way to bet. The country has been through harder times and surmounted them through politics rather than violence. My money’s on the basic soundness of our culture and political system this time as well.