David Stockman has another smash hit with his latest book, Peak Trump: The Undrainable Swamp and the Fantasy of MAGA.
Stockman is a New York Times best-selling author and he was also Ronald Reagan’s budget director.
In “Peak Trump“, Stockman goes after all the sacred cows: Military spending, entitlement spending, MAGA, Trump’s tax cut, the intelligence budget, and the Wall.
The book is not about Red vs Blue. In fact, it’s not really about Trump at all. Rather, Trump just happens to be the man at the moment.
I had a lengthy phone conversation with Stockman after I finished reading the book. The first thing I said to him was “This really isn’t about Trump, is it?”
He laughed, then responded along the lines of, “You are correct. Trump is a symptom of the problem. He wanted to drain the swamp but failed to do so. He never really had a good chance of doing that, but he failed to make the most of the chance he had. We are where we are because of decades of Congressional and monetary mismanagement.”
MAGA supporters may not see it that way. Those seeking a Leftist agenda will not be pleased either.
Stockman is sure to offend damn near everyone with one of his positions on something, including gun control.
Neither Stockman nor I are pleased with the partisan politics and the Washington compromises that keep digging us into deeper and deeper fiscal holes.
Timing Irony
Peak Trump is out just as House Speaker Nancy Pelosi humiliated Trump over the wall. Stockman could not have possibly timed his book better.
In regards to the wall and drugs, Stockman quipped, “The moment the wall goes up, there will be drone flying drugs over the wall to the other side”.
If you disagree, please tell us why.
Stockman defends his positions well. The book is well supported with excellent charts and graphics.
Even though you are highly likely to disagree with “something” he says, you are highly unlikely to disagree with “everything” he says.
Most importantly, I suspect he will change your mind on something.
Whether you like Trump or not just Get the Book!
Mike “Mish” Shedlock
Because people from Canada don’t want to come to the USA! If anything, Canada should build a wall to keep people from the USA out of Canada!
Who the fuck wants to go to Canada, the land of socialist. Screw that shit.
How come we don’t have a wall against Canada?
The idea a wall doesn’t help is laughable. Removing the wall in Tijuana would obviously be a bad thing. Of course it doesn’t end all the problems, but open borders aren’t the answer either. A simple barrier makes sense, it isn’t a big deal.
Billions of dollars is a big deal, though. They can be better spent. For example, on a bridge that thousands of people cross every day instead of a wall that prevents (considerably fewer) new workers from bolstering the economy. Or on law enforcement spending.
I bet it’d cost less money to investigate a thousand crimes than to build a wall that might prevent a few of them.
A simple barrier, free of all manners of high-falutin promises about the magic it will supposedly do, is very possibly a good thing along many or most national borders. And so are clear, legal, easily obtainable means of crossing said borders, at regulated checkpoints; for the vast, vast majority of wannabe crossers who does not fit any traditional (biblical, say) definition of being particularly “illegal” in any way.
BTW Stockman is also an advocate of a one time tax on wealth which he defined but I don’t remember the amount of tax or net worth he was referring to. This idea will come to pass in one form or another.
Trump is a counter-trend bounce. The trend of govt corruption/fraud/largess remains in tact. Govt’s are all about exploiting the people to fund themselves. Cops staking out those “dangerous” 25 mph streets with their radar guns demonstrates it is certainly not about servicing the people. Instead, it’s all about funding their unsustainable pensions, which the private sector can’t even dream about in their crazy world of reality.
Walter Burien has been documenting the largess of govts/municipalities for many years, and the assets and income streams are hiding in plain sight in their CAFR’s –
Yearly budgets do not include the balance sheet items found in the CAFR’s, which includes the stocks and income producing RE owned by state and local govts. If you add up all the stocks owned by muni’s, they would be the largest stock holder by far. These mini’s will claim this massive stock pile of wealth is for a rainy day. Do you think if the people knew what was owned by their govt, it might be harder to shove through new taxes?
Why do journalists not ask about these assets? Why are govts constantly finding new things to tax, like a Netflix service, instead of down-sizing and using the income streams from these assets? How can politicians be elected and re-elected when they can’t comprehend that every new tax simply reduces disposable income that lowers living standards for everyone?
The answer is simple. These career politicians have rarely been on the same side as the folks. They have little or no practical experience, yet we find people like AOC on the finance committee, which is headed by Maxine Waters.
Are citizens going to proactively stay in the streets until these mathematically-obvious abuses are brought to an end? Or, will the Yellow Vests not come out until the sh*t has already hit the fan? Human nature and history says the masses have to lose everything before they lose it and say I’m not going to take it anymore. Luckily, we have a minority of Patriots that will NOT allow govt to take away their last means of defense against tyranny. Since there is nothing new under the sun, expect the govt pension crisis to lead to economic decay and increased civil unrest/war. Why are people voting for this tragedy?
‘These career politicians have rarely been on the same side as the folks. They have little or no practical experience, yet we find people like AOC on the finance committee, which is headed by Maxine Waters.’
B/c they are voted-in by’ majority’ who are financially illiterate them selves!
They are not voted into their appointment. The establishment machine can get anyone elected in a given district, so they will then be their obedient foot soldier, like AOC.
Everything you wrote is true but these are just symptoms. Everyone will agree that money makes the world go ’round. The reason for this is that you have to have production before you can have consumption and production takes labor. Money is just excess labor (i.e. that left over after feeding and clothing oneself) stored in a fungible form that is trade-able with others for the fruit of their excess labor.
If you have real money/honest money, then said money represents the labor of the world. If you have fake money/fiat currency then some “special” person/group prints it from thin air and sends it into the economy to compete with earned money from others to compete for the purchase of goods and services. It chases up prices and devalues the currency that was earned by labor. Fake money is a naked short on labor. Naked shorting is illegal. When you take someone else’s labor via illegal means, it’s called slavery.
None of this can happen if the people stop accepting fake money as if it were real. If people either demanded to be paid in gold or silver OR as soon as they were paid in fake paper money they turned it into gold or silver then the slavery would end in 1 month’s time. So we are all in a prison of our own making. That is the simple truth of it and everything else is just noise whose din is now so loud that the sheeple can barely think. So they shut down and just herd with the herd, go with the flow.
For now the con runs and there is nothing that anyone can do about it because the herd has been fooled by the con men into having confidence in the con game; con games require confidence in order to operate. The herd will eventually lose confidence in the con and only then will things change.
None of them are 2000 miles long and all are in the middle of populated areas, not in the middle of nowhere.
As Denniger points out, the lack of a physical barrier is a small part of the problem with the signed Bill. Drugs will not be the reason the US economy implodes, but an invasion of low skilled workers, govt leaches, and terrorist will certainly not help … and drones can’t carry illegals.
Thing is, low-skilled workers are still workers, and they’re less of a drain than people born in the country simply because it’s difficult to get into the country illegal and only relatively young and fit people are able to do it. There’s less clear data since terror attacks are rare, but it’s likely immigrants are less of a terrorist threat than people born in the country, as well.
The idea that people from outside are a more dangerous than those inside the country is about as foolish as the idea that self-driving are more dangerous than human drivers. Cases that confirm the biased assumption get a lot of attention, while the conflicting evidence–like, all the human drivers and heinous criminals born on American soil–get ignored and dismissed.
The main danger to the US economy is, and has always been, regulatory capture and failure. Too much confidence and too much freedom–‘irrational exuberance’, in that famous phrase–is what brings on disaster. An aging population and a weakening government might increase the strain, but it won’t produce the shock on its own. (And immigrants help with those–they tend to be young, and in favour of a strong government.)
To argue that we should NOT have the means to control who comes into this country is non-sensical. To ignore that an open border makes it easier for child traffickers, terrorist, and other criminals to enter this country is ignorant.
While regulatory capture and failure is an example of unequal enforcement of the law, which also destoys competition, it is a bigger example of why govt is incapable of even running a bubble gun machine, and should absolutely NOT be made stronger. How can you think that those who abuse power should be made stronger?
Your BELIEF that too much freedom and confidence is what brings on disaster is proof you are clueless about what makes an economy thrive. Confidence and freedom are the most fundamental factors behind a robust economy, and they are the main reason the US rose so quickly to become the biggest and strongest economy on the planet.
Entrepreneurs must have confidence that govt is going to equally enforce the rule of law and protect property rights in order to risk their capital and work 20 hrs a day to make their dreams come true. The freedom to seemlessly share ideas and capital allows ideas to be turned into job-creating businesses. The GOVT protecting its donors by not enforcing anti-trust laws and enacting regulations that only big corporate donors can afford has reduced business formations. Forcing small businesses, which account for over 70% of jobs, to conform to burdensome regulations is also harming the economy. One example is internet business being forced to track and tax every customer in every state, which have different tax rates.
Govt’s hunt for money to save their perks, power, and unsustainable pensions is causing the capital needed for growth to get off the grid. For example, FATCA legislation requires every foreign bank to report information of US account holders to the IRS. This burden, which US banks do not need to do for foreigners, is causing foreign banks to forgo even opening accounts for Americans, making it harder for American businesses to expand overseas.
Greenspan’s use of the term “irrational exuberance”, four years before the peak of the dot.com bubble, was just another nail in his coffin of incompetence. I don’t fault you for being bamboozled by the so-called experts, as most people do not understand it is global capital flows, which are 10 times the size of all trade, that dictates economic trends and bubbles.
In the case of the dot.com bubble, it was caused by capital flows rushing to the US from Europe due to fears of the euro, which was a politically-correct nightmare from the beginning (late 1990’s), and is now in the process of imploding because the debts of participating countries were NEVER consolidated, allowing for an EU-based bond to compete with US treasuries. Instead, every country must buy the individual bonds of each country, so when one country implodes, the rest will be dragged down. As a result, countries like Greece must be constantly bailed out.
It should also be noted that periphery-countries like Greece, that used Goldman-Sachs constructed derivatives to mask their debt so they could qualify for EU entry, had their debt obligation double in the first two years of the euro, because their drachma debt was converted to euros and the euro doubled. In the meantime, Germany’s export-dependent economy benefited from the euro, which was weaker than what the deutchemark would be, resulting in Germany’s economic power (and fear of hyperinflation) to demand the EU impose austerity on the PIIGS. These harsh measures destroyed Greece and caused suicides to skyrocket, causing Merkel to be portrayed as inhumane, which led her to try to soften her image by opening the boarders to the Middle East immigrants, which are destroying European culture and over-burdening their welfare states.
As a result of all this govt meddling, the ECB now buys over 90% of the EU countries bonds, as no one else will take on the risk, which has destroyed Europe’s bond market (the same tragedy exists in Japan). In the US, individual municipalities can issue bonds, but the malfeasance of individual cities and states, like IL, NJ, CT, KY, NY, and CA cannot destroy the treasury bond market. This will occur after the euro and yen implode, but it requires the dollar to first skyrocket, blowing up the balance sheets of foreign entities that are holding excessive amounts of dollar-based debts.
This foreign capital flowing into the dollar is also the primary driver behind the current stock market, as anyone with a brain knows the economy is not as strong as touted. The Roaring 20’s was also the result of capital fleeing Europe due to WWI. Even the Great Depression was made worse because capital in the northeast banks and insurance companies flowed west to rebuild after the 1906 San Francisco earthquake.
The 2007 RE bubble was caused by GOVT allowing banks to overleverage and anyone with a pulse to qualify for a loan, not to mention the neglect of GOVT regulators that permitted captured rating agencies to give AAA status to Mortgage-Backed Securities that were actually holding subprime dogsh*t. It was also the Govt that allowed Bernie Madoff to operate under their noses for far too many years.
It’s all connected, and when we allow clueless and self-interested govt to try to manage the complex economy, the consequences always outweigh any perceived benefit – and two of the worst consequences are reduced freedom and confidence.
The bottom line is making govt “stronger” insures greater abuses, which is why the Founders wanted limited govt, but the constant collapse of Socialism and Communism throughout history already taught us this undeniable fact.
I agree with your first two lines. The means to control the border is the difference between bringing in immigrants who improve the country a little (just through natural selection alone) and bringing in immigrants who improve the country a lot! A wall isn’t a solution to the open border, though, because people aren’t simply walking in. Walking in is hard. They’re using vehicles to go through legal ports of entry, especially airports.
Until that problem is solved, building a wall is just like putting up a very expensive ‘do not enter’ sign, it’s not a solution to any problem except (in their opinion) builders and steel-makers not having enough contracts.
For your next paragraph, it’s the same issue again: Private citizens abuse their power even more than the government does. Keeping the government from collecting taxes, letting people accumulate wealth unchecked, results in more abuse of power than a strong government with higher taxes does.
This is because the government has oversight, transparency, and public exposure, while private wealth has less of it–often none of it. We don’t even get to see when a board room is incompetent until it’s far too late. That happens with the government, often, too, but it doesn’t go as far, otherwise the government wouldn’t have lasted 200 years.
Confidence and freedom do let an economy soar. But an economy can’t crash unless it soars first. It’s like bullfrogs in a pond, they ‘prosper’ one season and die off the next because they went too far. We’ve seen an incredible rise this century, and since the last crash 10 years ago, but there’s no escaping the law of gravity… at least, not until we’re able to start using resources that aren’t on our planet economically. If we continue on our present course, the crash could take down billions of people.
The main reason the US rose so quickly is because it came out of the second world war relatively undamaged and was able to exploit that position. In other words, because it was easy. The confidence was secondary to that. Heck, even the freedom we’ve had was a consequence of the country’s position, not the other way around… and we just saw that fall apart within the past few years because of ‘America First’ and the ‘War on Terror’.
All the things you say are hurting the economy are true, but there’s more you’re not mentioning: Young people being priced out of housing is hurting the economy. Wealth being kept within families is hurting the economy. Overworking and underpaying workers, and buying up intellectual property and sitting on it without sharing it are hurting the economy.
In these cases, the rule of law and property rights are part of the problem, and the solutions are socialist. Remember that businesses are seldom democracies–and when they are, it’s because of left-wing influences–so extremes of capitalism look a lot like the extremes of socialism. Or rather, they feel the same, even if they look a lot more colourful.
The government hurts for money for all those things, but most of the government’s money goes into infrastructure, defense, and social services, things everyone needs. Their corruption is exaggerated, and anyway, it’s not like shareholders and bankers aren’t shaving money off the top of every transaction to fund their own lavish pensions and lifestyles. It’s not that different.
Blaming the Euro for the dot com bubble seems contrived and partisan. There are sure to be many factors that contribute, but ultimately, investors were ignorant and overconfident. That matters, it always does. The stock market is supposed to represent the wisdom of the crowd, saying they were wise enough to predict the Euro’s troubles is a rationalization. They didn’t know what they didn’t know, and as the world’s most powerful economy, American deregulation contributed to both growth and instability everywhere in the world, Europe included.
I can’t comment much on your currency-trading theory, though I am curious why the Yen is considered such a safe bet if it’s supposedly going to inevitably implode.
My understanding of the roaring 20s is that it was based on mass production forming its own speculative bubble. At the time, people thought more goods meant more wealth, and they were shocked when oversupply occurred, not unlike what happened in Spain when they brought back too much gold from the Americas. Capital would have fled Europe anyway–it’s important to consider what it was invested in. It was invested that way in Europe, too.
If you use capital flows as a model, thinking more about where the money comes from and goes than what it’s used for and why, then how do you use that to avoid problems? Do you curtail the flows? Redirect them? Or would you say too big for anyone to manage? I prefer to think that what’s holding us back is a lack of foreknowledge, not the scale of the problem.
I don’t think a weaker economy is necessarily a bad thing. So long as no one lives in poverty, there’s limited value to greater wealth, and too much wealth is a liability–it generates jealousy, waste, corruption, decadence, and worst of all, unsustainable practices.
There’s always danger the government may come to embody all those things. But the private sector already does, so they need something to keep them in check. Unions aren’t perfect, and neither is government, but there has to be something.
Drones can carry me. I’m sure there are illegals lighter than that…
Even currently available commercial, cheap ones can carry a newborn to citizenship…. And with reliable DNA fingerprinting, then the parents he needs to support him.
High capacity drones are much more expensive, making it unaffordable for most illegals. Also, bored skeet shooters would find it unfairly easy.
Lower capacity drones used to be expensive as well. The tech is advancing very fast.
But yet walls around NFL stadiums, prisons, CIA headquarters, the Democrat Convention, Nancy Pelosi house, the entire Israeli/Gaza border, the Iraqi/Saudi border, Disneyland, etc. are quite effective.
See if you can think of why.
I’m thinking the effective walls you site are effective for one of two reasons:
Threat of death, ie guarded with armed personnel
Not worth the effort, i.e. just pay the $200 to get family into Disneyland rather than hoisting kids over a wall
US border wall won’t be guarded with threat of death, that just wouldn’t be tolerated. And people fleeing turd world countries like Venezuela are heavily motivated to get into US.
And yes, there will be drones to fly people over the wall as well, just a matter of time…
It is such a silly argument. Show something is 1% ineffective and therefore it is worthless and should not be done?
Does that make any sense?
So no walls around any prison then?
So not one new medical advancement or new drug?
And for sure, this never stopped democrats with gun control despite showing their laws 99% ineffective.
“The moment the wall goes up, there will be drone flying drugs over the wall to the other side”
1%, AND ALWAYS GROWING, ineffective.
In addition, don’t sell something as effective, if it is not. Since doing so, involves government making promises, which they will then use as excuses to continually grow and expand their initial involvement, in order to maintain the illusion that their program is “working.”
Building a wall along national borders, in and of itself, is not such a bad thing. But don’t build it, under the pretext that it will stop anything of consequence. Instead, what it can do, no different from a 3 foot wooden fence around one’s yard, is provide a clear dividing line between those who intend to stay legal, and those who knowingly wishes to break the law.
But for the latter to be workable, you must then also make the legal means of crossing, much more attainable. That way, the wall contributes to regulate the flow of people, so that by far most will come through legal crossing points. Instead of, as of now, the legal crossing points being, perversely, the points along the border, where crossing is the most difficult for most people.
MAGA is a fantasy because the American Empire is in the decline phase. The fall of the Soviet Union was the effective peak, as the U.S. became the world’s only super power. Quickly enough, being the king of the hill was squandered away. At the top of the hill, the only direction is down. We are following the same rise and fall of any other empire.
I’m starting to think the Soviet Union denizens were lucky. There was a period of several years where everybody knew the USSR’s goose was cooked, then came the inevitable collapse.
We, on the other hand, have powerful central bankers hell-bent on keeping this zombie alive. Our writing has been on the wall for well over a decade with no end in sight. Instead we get to face a slow motion implosion as everybody is programmed to despise each other. We also want to start a bunch of new conflicts around the world, ensuring our meltdown will be as messy as possible.
“Pissing up a rope” is the phrase that should be used at the start of any stimulus discussion.
The problem is that the entire system was built on assumptions of never ending economic growth. Everyone drinks the Kool Aid, mostly because we’re obsessed with the future. After all, it’s where we’re going to spend the rest of our lives. Besides, today sucks!
There are already drones flying drugs over the wall, as well as tunnels, air cannons, ladders, catapults, trebuchets, ultralights, Cessnas, portable ramp/bridges, and probably on wings of eagles too. An improved wall will only make the challenge that much more fun for the drug runners. But whatever Uncle Sam puts in place, they will get over.
I’m surprised no one is holding a contest yet, or a television show, where the 8 wall prototypes are near San Deiego. Let Americans see once and for all that it takes very little brains to get over any of those walls. I’ve got several designs myself already. Just looking for sponsors and team members now. 🙂
The book sounds like it describes why Trump won. It was a hail mary by 49% that didnt work. Bring on the crash of the 2020s. Reality cant be dealt with until we stop living in fantasy. Ray Dalio and John Mauldin have better perspective on the coming crises. They are generational and only happen once every 90-100 years.
John Mauldin doesn’t know crap, he was a Hillary weanie and lost half his base because he was such an ardent anti-trumper – best thing he could have done – stay out of politics.