Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
Still, it takes a lot to believe that Donald Trump could win more electoral-college votes than Hillary Clinton or Bernie Sanders and that his Supreme Court appointments would have Justice Scalia’s respect for the lives of his voters. Mr. Trump’s nominations for anything sit as a mystery.
Before Justice Scalia’s death, some might have said the Trump option was a risk worth running. The risk now has become too high.
He has a point.
Trump has, famously, gone after China on its trade policy.
In January 2000, President Bill Clinton boldly promised China’s inclusion in the World Trade Organization (WTO) “is a good deal for America. Our products will gain better access to China’s market, and every sector from agriculture, to telecommunications, to automobiles. But China gains no new market access to the United States.” None of what President Clinton promised came true. Since China joined the WTO, Americans have witnessed the closure of more than 50,000 factories and the loss of tens of millions of jobs. It was not a good deal for America then and it’s a bad deal now. It is a typical example of how politicians in Washington have failed our country.
There is an interesting analysis of China’s stumbling economy in the Observer today.
Here is a top ten guide for the perplexed.
Central Planning: Central planning, central planning. The history of the abject failure the Soviet Union’s five-year plans should tell you everything. Command and control economies that report to one man (in a nation of 1.3 billion people) are doomed from the start. Top down economic decisions often look bold and start out highly stimulative, but then degenerate into inefficiency, waste, politics and fraud.
Political Corruption: As the command and control economy generates liquidity, the demand and direction of the distributed capital becomes a political tussle. Decisions on how much steel, cement, coal, glass solar panels, high speed trains and shopping malls—in short everything—are not done in China as a cost benefit analysis by risk capital, a job difficult enough in itself. (Witness the capitalist economies’ booms and busts.) In China, this liquidity was allocated by political muscle, massive bribery and kickbacks, rather than economic justifications.
Basic Gangsterism: Counterfeiting, knockoffs, copyright infringement, theft of intellectual property these were a part of the booster rockets of China’s economic rise. It was all supposed to go away after China joined the WTO in 2001. It didn’t. It just became more institutionalized. Foreign companies needed Chinese “partners” in auto production, healthcare and technology. These “partners” crippled the potential productivity of the investments and led to frequent disputes and even more corruption… as in the GlaxoSmithKline scandals.
There are a total of nine reasons, many addressed in Trump’s piece above.
Now, the economy of China may be in free fall.
[While I was finishing this post, I saw the terrible news that Justice Scalia died. God rest his soul. The GOP Senate majority should not permit President Obama to replace Justice Scalia, and should slow-walk any appointment he may make until after January 2017. That empty seat will be and should be a campaign issue. It raises the stakes considerably for the next President.]
The other day a friend asked me: “what kind of judges would Trump appoint?”
I responded:
“They will be the best, the smartest legal scholars we have, people who know the Constitution up and down, the whole thing, and especially our second amendment, which no one will touch, not while I am President, the second amendment is sacred, and they will be outstanding judges, judges who will be fair, but also do justice, and keep our country safe, so that criminals like the guy who killed Kate, beautiful Kate in San Francisco, people like that will go to prison for a long, long time, or back to Mexico, where they belong, if they are here illegally. And the judges I appoint will follow the law carefully, and they will always do what is good for America. And I know some of the best people in the country who will advise me on which judges to pick, great lawyers, great trial lawyers, and I know lawyers who are great negotiators, the best in the country, some of these guys are killers, not nice guys, but tough, smart, incredible lawyers, and legal scholars, from top law schools, the best law schools, and they know who the best people are, not necessarily people you have heard of, but the best, and we will appoint amazing judges. Trust me, the American people will be very proud of the judges we pick.”
This is of course a spoof of Mr. Trump’s speaking style.
However, a little research discloses that my satire was pretty close to what he actually said when he was asked this question:
Long time Democrat turned Republican Donald Trump, who as a business titan relied more than any of his opponents on “Wall Street” funding, decisively won the Republican primary. In sharp contrast, socialist Bernie Sanders decisively won the New Hampshire Democrat primary by attacking his opponent’s Wall Street ties. Trump supporters apparently believe that the way to deal with Wall Street a**holes is a bigger a**hole who will negotiate much better deals, whereas Sanders supporters believe that “Wall Street (a synonym for the entire US financial system) is a fraud” requiring major extractive surgery.
Most people within the NY financial community including the numerous mid-town asset management firms agree that many Wall Street players were a**holes during the sub-prime lending debacle leading to the 2008 financial crisis, but surely the Sanders pitchfork brigade wouldn’t travel uptown. This may explain why among the thousands of books and articles written in the aftermath of the financial crisis and the Occupy Wall Street movement, Wall Street hasn’t defended itself and has found few defenders willing to go public.
Truth be told, Wall Street has always attracted more than its share of greedy a**holes. But historically they discriminated against the less profitable investments in favor of those that had the highest return potential relative to risk. This represented the brains of a heartless US capitalist system. Defenders of capitalism correctly argue that it is the only economic system at the base of all human economic progress, however unequally distributed. Progressive critics argue for greater equality, the poor made poorer so long as the better off are equally so (although this is not the way it is typically represented).
I have been thinking about the Donald Trump Phenomenon for a while.
I have been mulling Revolution since last summer.
UPDATE: I am amazed but Peggy Noonan gets it !
I have thought for some time that there’s a kind of soft French Revolution going on in America, with the angry and blocked beginning to push hard against an oblivious elite. It is not only political. Yes, it is about the Democratic National Committee, that house of hacks, and about a Republican establishment owned by the donor class. But establishment journalism, which for eight months has been simultaneously at Donald Trump’s feet (“Of course you can call us on your cell from the bathtub for your Sunday show interview!”) and at his throat (“Trump supporters, many of whom are nativists and nationalists . . .”) is being rebelled against too. Their old standing as guides and gatekeepers? Gone, and not only because of multiplying platforms. Gloria Steinem thought she owned feminism, thought she was feminism. She doesn’t and isn’t. The Clintons thought they owned the party—they don’t. Hedge-funders thought they owned the GOP. Too bad they forgot to buy the base!
Read the whole column if you have access.
The GOP Congress has been a huge disappointment.
At this this time in history the Left may be correct about what truly matters. The institutional Republicans are still playing the game of administration. By contrast Obama is playing the game of revolution. By slow degrees the entire political system is coming around to Obama’s point of view. Perhaps this is no ordinary time. When Hillary calls Republicans “terrorists” and Obama calls them “crazies”; when Sanders and Trump are outflanking the established wings of their respective parties, each of these in its own way suggests the emphasis of the next ten years will not be on public administration but on determining the power relationships within America and among the countries of the world.
The Constitution says that Spending bills originate in the House of Representatives and the Ways and Means Committee is supposed to write those bills. It has not been happening even as the GOP has taken Congress.
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
So, we now have Donald Trump, who has almost no supporters known to GOP officials in New Hampshire where he just won the primary with 35% of the vote in a large field.
During that state GOP meeting a couple of weeks ago, I asked former Gov. John Sununu, a man with a lifetime of knowledge about New Hampshire politics, if he knew any Trump supporters. Sununu pondered the question for a minute and said he thought a man who lived down the street from him might be for Trump.
Immediately after the story was published, I got an email from a real estate executive and former member of the New Hampshire House of Representatives named Lou Gargiulo, who happens to live down the street from Sununu. “I’m the guy!” Gargiulo told me. “Not only do I support Mr. Trump, I am the Rockingham County chairman of his campaign. The governor would be shocked to know that many of his other neighbors are Trump supporters as well.”
What a surprise ! Pauline Kael would be shocked.