Trump Blames Companies
The Wall Street Journal reports Trump Says Companies, Not Trade Policies, to Blame for Business Setbacks
The comments on Twitter come as more U.S. businesses and farmers say they are suffering amid the prolonged U.S.-China trade war, ahead of a new round of tariffs set to take effect Sunday. When Mr. Trump was asked by reporters late Friday about whether the U.S. would go ahead with the tariffs, he responded: “They’re on.”
Dear Farmers
https://twitter.com/RexHuppke/status/1167443751301722112
Farmers have taken on too much debt, but Trump’s policies have unquestionably made matters much worse for them.
Trump Translated: Don’t Blame Me
“Don’t blame me! I don’t ever do anything wrong”
Who’s to Blame?
There is plenty of blame to go around.
- The Fed blew three consecutive economic bubbles by keeping rates too low too long yet again.
- Beggar-thy-neighbor global currency wars
- Trump’s seriously misguided tariffs.
- Global fiscal stimulus policies
- Global central banks policies
- Demographics
Apportion that blame however you like.
But please note that Trump is demanding more of point number one despite the consequences. Trump also wants the Fed to entertain point number two.
Mike “Mish” Shedlock
Trump is speaking as a politician. Have you ever heard a politician criticize their own performance before an election?
Expecting a rational analysis is like expecting a lion not to roar.
Trump didn’t force corporations to borrow and overpay for acquisitions, share buybacks, or one-time dividends. That was simply corporate leadership fleecing shareholders.
Partially agree. More and more the moral compass is being lost. However, when you are borrowing money at ridiculous interest rates (Fed) you are bound to make ridiculous mistakes.
A market based interest rate would still have problems, but would be better.
“As Martin Armstrong noted, all pegs are eventually broken.”
Yes they are – so what – there should not be pegs.
A dollar should represent a quantity of gold not a value of gold. There is a huge difference.
The former is not a peg. It is simply a 100% redeemable dollar backed 100% by gold.
“there should not be pegs”.
There should also not be deficit spending, massive govt corruption and freeloading, illegal immigration, no enforcement of anti-trust laws, etc, etc.
Your wishes are as much of a pipe dream as Bernie’s give-aways, until the career politicians is made extinct by demanding short term-limits.
Govt NEVER looks in the mirror and reforms. The root cause around the world is govt largess, which has consumed more wealth than any other factor. Yet, you continue to single out the Fed and Trump, who does NOT authorize the deficit spending and anti-competitive legislation.
I am not sure if am reading what everybody else is reading? Who said tariffs are solely to bring back jobs, so please stop repeating this over and over again. The sticking point are:
-currency manipulation (an MO common to East Asia)
-theft of intellectual property. (Too late, most have already been stolen)
This is not a Trumpian issue; the Europeans face the same conditions, but the “leaders” there prefer to bask in intellectual, moral high ground, and principles that no one gives a fig leaf about, elsewhere.
“theft of intellectual property.”
Yet the companies that do business there don’t seem to mind and have move some of their operations with eyes wide open. Since when is the government responsibility to protect IP not belonging to the government? What are you a communist?
“Too late, most have already been stolen”
Another thing that you don’t get: IP is ephemeral and dynamic. So the fact that they have “stolen IP – as you said” does not mean that a country can not overcome that with better IP. BTW the USA stole IP from England during the industrial revolution. That allowed America to start its own until enough capital created in country IP. Sounds familiar?
Anyone not on a strict Gold standard, is engaged in currency manipulation. East Asia, Europe, the US. Everyone. And Every.Single.One.Of.Them loses out because they themselves engage in it. There is no more real economic benefit from “manipulating” ones currency, than there are diet benefits from making the pound heavier, so one can pat oneself on the back for “losing weight.”
As for “Intellectual property”, complaining about someone “stealing it”, loses all meaning, when they are intentionally defined as broad as humanly possible. Not, never, to protect nor aid inventors and creators, but rather to enable ambulance chasers and “investors” to insert themselves into value chains way above their meager brain level.
It’s very much the same story as rape: When looking at a woman is defined as “rape,” in order to drum up improved access for ambulance chasers and other rabble to rob their betters, whether some broad claims she was “raped” or not, is just one more “rolleyes and so what?”
Poorer countries do tend to have more of even narrowly defined IP theft (as in straight up copying of Hollywood films and music” than wealthier ones. But that pretty much gets drowned out by the yahoo choir of ambulance chasers claiming to “represent” the “long neglected” family of the guy who invented the wheel; the patent trolls who insist it is, in fact, they, despite being unable to even comprehend something as complimecated as a wheel, who have “invested” in the rights to it. And that Trump needs to make them whole, or the syyystem will collapse.
A gold standard is not a solution in itself. It will just usher in a different set of distortions. Money need to expand in unison with the economy and not to constrain its growth. Money is sort of like nuclear energy: it can be used to power and light countries or to blow the whole planet to pieces — it’s what we want to do with it that matters.
“Money need to expand in unison with the economy and not to constrain its growth”
And the official meter need to expand to keep up with growing waistlines? It may seem exotic and all, but mathematicians, and accountants, have been aware of a thing called decimal numbers for awhile now…. And Gold has this property that it is very finely divisible……
There are, or at least have been, distortions imposed by Gold as well. The huge finds in the Americas being the most cited example. But until something more precisely defined, like Bitcoin, is sufficiently trusted, Gold is still eons ahead of any possible fiat currency. Supply may grow, or even shrink (from some industrial uses) a bit now and then, but it is still stable enough to plan for the future in, with fairly good precision.
And also, and this is even more important, Gold does not serve as a systematic vehicle for theft from some to others, the way fiat money does. Some may luck out and find a mine in their yard. But it’s random, like finding oil is. Hence non distorting. Something a racket where 99% have to work and provide something of value in order to obtain purchasing power, while a connected 1% can simply sit there and outbid any of those 99% by virtue of simply being handed fresh print, will never be.
Meter is only a unit of account, money is also a unit of exchange and an (imperfect) short-to-medium length store of wealth. That’s why the meter can’t ‘grow’, while money supply should to facilitate a growing exchange among an increasing population of people. Because money is a store of wealth, wealth can be stolen by physically stealing money, and a monetary system can be manipulated to transfer (or steal, if you will) wealth from one section of a population (the 99%) by another section of the same population (the 1%). One hypothesis would be that it has nothing to do with the monetary system and the kind of currency that serves as money, and everything to do with political economy, which is defined here as who gets what, when and how much based on — let’s say for a lack of better words — how wealthy we are to begin with and what we do (e.g., being a CEO).
So, presently we bemoan that the 1% can gift themselves money by blowing asset ‘bubbles’, when we switch to a gold currency, we may bemoan that the 1% sequestered all the gold and starve us of money.
I think some times that a fiat currency can have a type of justice to it that a gold system lacks. Gold has permanence, fiat is immaterial, a ghost, today its here, tomorrow its not. Excessive gifting may just bust the ghost. I would not be surprised if one day the 1% asked for a gold standard…
Just as an Ounze of Gold can be a unit of exchange, so can a meter of cloth. Or a square meter of farmland. The only difference is generality. In limited trades, the latter may well be preferred, but economy wide, Gold has simply proven easier to work with. So people exchange for it, in the knowledge that exchanged it for something else they need later, is easier than trying to make farmland deals at the grocery store.
There’s nothing magical about “money.” In general, outside f children’s fairytales, there’s no magic, period. Gold has just turned out to be a convenient something to use in highly diversified trade. Which is why it has generally been preferred, at any time and place where people are not, directly or indirectly, forced at gunpoint by totalitarian regimes to use something inferior, like pieces of scrap paper with trivially reproducible drawings on it.
Where does the misguided notion that a growing economy needs a growing money supply come from? It;s not as if people sufficiently competent to aid in economic growth, somehow cannot do basic fractional math. Nor as if Gold cannot be finely enough divided. Hence, even if the overall Gold supply remains fixed, the number of Gold pieces required to support activity, can easily be created, by simply making them smaller (or less fine.)
The reason Gold has virtually always become the preferred money when available, is specifically that it is so well suited to the task. It is compact, hence easier to hide and protect from theft. It is (relatively) easy to verify, hence discouraging fraud. It is easily divisible and recombinable losslessly, hence supports growing economies and transactions of vasly different sizes. Etc., etc. While anything CAN be stolen, confiscated, taxed or obtained fraudulently, gold has been preferred as money because it makes protecting it easier than alternatives. Certainly than the “alternative of easily, and legally if you’re one of the more equals, counterfeited paper pieces.
I am on the side of the gold standard. Gold stock increases gradually, and so should the money supply and the economy. Irrational exuberance in any asset should be tempered by higher rates, period. Gold standard is hardly an intuitive tool, but there is nothing better to prevent the urge to manipulate. Now, sadly too late, the bubbles are too big…
Well, let’s be honest with ourselves, at this point it is about imposing on China policies that will halt and reverse their economic growth, while shaping Chinese markets to permit our corporations to harvest the largest possible profits… as simple as that.
British imposed themselves on China after a sequence of Opium wars. We may need to do the same to achieve the above objective. British at that time were by far more industrially and military superior. We don’t seem to be. China seems to have learned the lesson, while we have de-industrialized.
But this is not what I hoped for, I hoped for internal changes and reforms to stimulate industrial growth and innovation and simply out-compete the other economic system. Does not look like it will happen.
Meter is not the same as a meter of something, just as an ounce is not the same as an ounce of gold.
Gold is uniquely suited for coinage. It has a relatively low melting temperature, resists rusting, very malleable, and soft, and thus useless for making weapons. Rare, but not too rare. Paper-like and clay media have existed from a very long time, but paper is susceptible to moister, ceramics are breakable. Silver was good enough as well. Human development progressed as they switched from one material to another: stone age, copper age, bronze age, iron age… what is it now? oil, electricity and silica age? Gold was a convenient currency for the ages of metallurgy, but not necessarily for the age of whatever we live in now.
Money, together with writing, arithmetic and geometry, has been invented by large, settled, structured societies for the purposes of bookkeeping and political economy, notwithstanding what they tell us about the ‘natural’ appearance of money in ‘primitive’ societies. Scythians made intricate gold ornaments, but no coins as far as I know — meaning they could make coins if they wanted to, but had no use for them. As late as 1600, Europeans bartered household items, agricultural implements and rum for slaves with West African chiefs. The situation was totally different with China, which wanted nothing from the British except gold.
Those large structured societies using gold and silver coins as a currency have been anything but democratic, free or respectful of human rights. Just the opposite. Modern people by and large have no idea about the money mechanics, nor do they care to know or give a hoot whether it is gold or ‘Benjamins’, as long as they have it.
Let’s do a mental experiment. Let’s say you are just hired and your salary is 2kg of gold per year (about 100K at current gold prices). But next year, your remuneration in gold has to be lower, because there was a (real) increase in GDP of — say — 3%, while the gold supply remained the same. So, you get 1.94 kg gold next year. Next year you get even less.. cumbersome. Then, they hire someone else. As a new employee, his salary will be less than 1.94kg. But then GDP declined, so you get back to 2kg…
Maybe there is some aesthetic or sentimental reason for switching to a gold, but I don’t a reason from the perspective of better monetary system or easy of usage…
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Mises
Quit bellyaching. The sooner, the better. If China trade is the trigger, I’ll not loose sleep over the CCP’s resulting hardships. Ours are already baked in.
Indeed, the sooner the better. Already 10 years too late.
Should be obvious to everyone that Trump is not part of the solution to our bankster nightmare. Still, I’ll be happy if he doesn’t start any new disastrous wars. To do that he’ll have to ignore his best friends Israel and Saudi Arabia, but so far he has resisted their pleas.
Would be nice to get a politician who wants to take on the central banks, but there are none today. Ron Paul was probably the last chance. Trumptards should take note that jawboning the Fed into CUTTING rates does not count as valid criticism.
Complainer-in-chief
He’s right regarding many companies, but incorrect regarding the prescription, the latter because naturally he believes (incorrectly) that rising stock market will ensure his re-election in 2020, because he was told (incorrectly) that most people view stock market performance as a barometer of their own economic well-being.
Regarding the FED and 3 consecutive bubbles — well, increasing or decreasing the cost of capital (by manipulating short term interest rates in the past and now paying interest on bank reserves – see Hamilton of the econbrowser) is the main mechanism of regulating economy in most capitalist countries whose major purpose is to smooth the business cycle. Now, do the esteemed thinkers and analysts and our host believe that we should abandon business cycle smoothing and revert back to unregulated economy?
Yeah but the problem is the folks in charge at the Central Banks don’t have the discipline or the ethics to halt bubbles before they become damaging since Volcker. We now have bubbles in assets as far as one can see and no escape strategy except negative interest rates and QE, a sure recipe for a revolution here in the US. A possible short term solution, QE for the people won’t be supported by the wealthy that actually run the western “democracies”.
That may be, but we need to know whether the FED-smoothing system is indeed worse than no smoothing — for some reason people in the position to do so decided to switch from no FED to a FED-system a long time ago, obviously they did not do it because the no FED approach worked wonderfully. And neither system works well, then what?
“Yeah but the problem is the folks in charge at the Central Banks don’t have the discipline or the ethics to halt bubbles before they become damaging……….”
The problem is the folks in charge at the Central Banks, have anything like a Central Bank to be in charge of. Once they do, they will blow bubbles, as that is all they can do.
Blowing Bubbles is Central Banks’ sole and only mission: Bailing out banks, lenders, borrowers and depositors which were imprudent and screwed up, hence allowing them to keep on screwing up. And to do so, using the same old instrument, which is the only one they have: The printing press.
The printing press does not create any new wealth. Printing Washington’s face on paper pieces simply does not, no matter how much economic illiterates may feel that it does. Hence, since banks et al are being bailed out, aka have more wealth than they would have had sans bailout; that wealth has to come from someone else. Meaning, it is being transferred, net, from those who were not imprudent, and not incompetent enough to screw up, hence didn’t need to get bailed out. Not by lower rates, nor “liquidity injections”, QE nor the rest of the obfuscatory jargon privileged money printers are fond of dressing up crass money printing in. Ergo, Central Banks exist solely to transfer wealth from people who are competent and prudent. To those who are not.
Keep doing that for awhile, and you end up where the USA is today: A bunch of incompetent, imprudent idiots owning darned near all wealth. No surprise there, given how long Central Banks have been at transferring wealth their way, away from their more competent neighbors. Of course, owning all wealth, also means controlling all productive capital. Ergo: Incompetents in charge of absolutely all capital. From factories to farms to once great manufacturers to the White House. Incompetents everywhere, who “made money” from Fed engineered wealth transfers, by way of asset “appreciation,” aka bubbles. And are therefore now in charge of things way beyond their aptidude and competence.
It’s an inevitable result of any Central Bank. Not something which will magically fixed by the next Caudillo, who says on TeeVee that he is bestester than all the other Caudillos, and will make Hope and Change Great Again…
“borrowers and depositors which were imprudent and screwed up”
No one bailed out the borrowers. They lost their home and their credit was ruined for at least 7 years.
The Fed does not bail out the depositors. The FDIC does that.
So I’m to assume you keep your money under the matters so as not to have to use a bank, a brokerage account or something of that nature?
So you reckon reblowing another housing bubble, another auto bubble, and another everything bubble, did not bail out borrowers? Then what the heck else did it do?
And what do you think would happen to depositors if the Fed had not bailed out banks, engaged in QE, reblown every bubble it could reblow, etc. You think the FDIC sits on enough money to make everyone whole? If you do, I assume you keep falling for the one about how “pensioners” “paid in” to something as well. Never mind noone seem able to find exactly were this “in” is, where all the money supposedly is….
Back in the real world, printing money bails out the entire credit nexus. At the expense of those who are prudent, competent and productive. As opposed to imprudent, incompetent and either idle or straight up value destroying.
You can’t bail out lenders, without also bailing out borrowers, as the means available to The Fed is simply to print enough to raise the prices of what borrowers borrowed to buy, back up to where they are again high enough to collateralize the loans taken out to buy them. And you cannot bail out banks, without also indirectly doing so to depositors, as bank failures of any magnitude, results in depositors taking losses. So, everyone imprudent and incompetent gets bailed out. Encouraging more of both. Which is plain to see all around.
“because he was told (incorrectly) that most people view stock market performance as a barometer of their own economic well-being.”
Really? that works until the CEOs of those companies start firing people to “compensate” for the market drops. It is really silly t say that most people don’t get affected. So here is my prediction if the market continuous dropping, unemployment will increase.
May be I am wrong here, but my sense remains his second term is not assured here even if the stock market is rising — why?, well, when he was elected over Hillary Clinton, the stock market was rising and by all indications the economy was doing wonderfully, unemployment was decreasing, Clinton had to win easily by this theory, why bring in an untested bizarre showman — but that’s exactly what people did (not a majority, but enough to get him in in the electoral system that we have). I conclude from this that a significant amount of people were energized by his ‘true’ outsider status and hoped he will user in meaningful reforms and changes.
But he attempted some reforms and by now has forgotten why he was elected, it is not to pump stock market and actuate market trading on his tweets. Come end of 2020, the stock maket may well be rising and he be voted out in favor of say…. Yang…
….of course he is not to blame …. the FED and other CBrs are, for continuously disrupting healthy business cycles in order to desperately keep the cheap debt, rat race going ; the CBs created cesspool is simmering with fermentation , only question remaining when(not if) it is going to overflow….
… and he’s crying “election tampering” because the fed won’t lower interest rates to cover his moronic decisions.
You get a pass for voting trump over Hillary. “Here’s your sign” for thinking trump represents anything you wanted.
Tariffs barely – it all all – bring jobs back to America.
Taxing corporations heavily – will.
I’ve been on several job interviews in the Boston area over the years where the person I interviewed with (Brown Brothers Harriman, State Street Corp) told me the Federal Government gives them tax subsidies if lay off workers in America and relocate their jobs in foreign nations.
Brown Brothers Harriman layoff off their IT workers in American and opened an office in Poland that to replaced. The government gave them $$$ – tax credits – to do it.
State Street has not only transferred their IT to India and been given your tax dollars and my tax dollars to do so, they have imported Indians to their offices in America and laid off their American workers…but not before the American’s train the cheaper Indian labor to do the jobs they lose to the Indians.
State Street sometimes herds their cheaper foreign/Indian labor into one area in the back office. Perhaps to minimize their visibility. I once worked at State Street’s Quincy, Ma office where entire area housed dozens of an IT devision, consisting of 100% Indians except for 1 white male American in the middle. He’s the manager. The American who used to do those jobs were laid off.
So it’s not just China, and tariffs are not going to help much if at all, in bringing jobs back.
What WILL help, is to increase taxes on American corporations by ending their ability to avoid taxes thru “foreign income” and also abolishing the tax credits we give them to eliminate American jobs and replace them with foreign labor.
“Trump’s seriously misguided tariffs”
are the result of seriously misguided China policy which resulted in the destruction of 10’s of thousands of U.S. factory operations and the jobs that went with them. China is now a rapidly rising empire.
BOE”s Mark Carney recently commented that low interest rates lead to crisis and war. Going negative, rates are the lowest in 5,000 years. Fourth Turning wars are major wars and it feels as if things are building up to that result.
“10’s of thousands of U.S. factory operations and the jobs that went with them.”
And now they will go some other place. Those jobs are not coming back to the US regardless. They will go to other Southeast counties and then to Mexico etc. You as Trump are living in the past. Jobs have always migrated to other countries – always. The way to keep MAGA is to move forward with tech. Then again, a president who thinks coal is to be protected does not inspire much “moving forward”.
Where did jobs migrate to during WW2? The U.S. became producer to the world.
“…are the result of seriously misguided China policy…”
Which in no way absolves a doctor for amputating a leg to “cure” a migraine. Even if the anesthesia does, temporarily, make the head pain go away.
The “misguided policy” was, and is, The Fed, the de-linking from Gold, and the attendant financialization. If Trump wants to fix those misguided policies, that’s what needs reversing. Nothing else will work. Since nothing else can work. Even in theory. And a migraine, plus a missing leg, will always be even worse than just a migraine.
“The “misguided policy” was, and is, The Fed, the de-linking from Gold, and the attendant financialization”
The misguided policy is that of thinking that gold is a permanent standard in world that operates on economic cycles. As Martin Armstrong noted, all pegs are eventually broken.
Well I must say no one better qualified to recognize bad management that a guy who bankrupts most of his own business. So there is that…
Trump is just the pin that can burst the bubble. If it was not Trump, it would have been something else.
Aside from omitting himself, he is dead on!
Which has to count as pretty fly for that orange haired guy!