What Bonehead Appointed These Boneheads?

President Donald Trump continues to boast about creating the best American economy ever, but he also continues to urge the Federal Reserve Board to pursue the sort of monetary policy usually reserved for recessions and depressions. On Wednesday he “tweeted” that the Fed should be setting zero or even negative interests, and lamented about “A once in a lifetime opportunity that we are missing because of ‘Boneheads.‘”

We can’t claim to be Milton Friedman-level experts on monetary policy, but we think we understand the basics better than Trump seems to, and we’re cautiously hopeful that the “boneheads” at the Fed know best.

Trump’s “tweet” suggests he wants those unprecedented-in-American-history zero or negative interest rates so that he can rack up further trillion-dollar deficits at a lower cost, and perhaps allow him to refinance what America owes its international creditors. The self-proclaimed “King of Debt” believes he can negotiate the same kind of deal that left him rich even after six corporate bankruptcies cost his investors hundreds of million dollars, but we worry that the country would the have the same problem getting a line of credit that Trump has had ever since his casinos went under despite having house odds.

The “tweet” enviously notes that other countries have gone to zero or negative rates, but all of those countries are going into recession, partly because of the slowdown in the global economy that has followed Trump’s trade wars with just about everyone. Recessions require interest rate cuts and deficit spending, at least according to the consensus of economists on both the left and right, which has proved pretty reliable over the past many decades, but the best economy ever should be able to cruise along on the very low interest rates the Fed has lately set. Should the recent slowdown in the American economy slide toward recession, the Fed will need to be able to make cuts, and needs to keep that ammunition in reserve.

The “tweet” didn’t mention it, be we will note that four of the five Fed board governors and the Fed chairman — the aforementioned “boneheads” — were appointed by Trump. Trump also spent much of Wednesday denigrating newly defenestrated national security advisor John Bolton, the third man to hold the post in less than three years, calling him “not smart” and blaming him for starting the Iraq war, and Trump has had similarly unkind things to say about many of the people he appointed to powerful positions.

In his election campaign Trump promised he’d only hire “the very best people,” and he’ll probably repeat the claim during his reelection campaign, but that’s like saying the best economy ever needs negative interest rates.

— Bud Norman

What’s Good for General Motors …

Being the hard-nosed and hard-hearted sorts of old-fashioned conservatives who embrace Adam Smith and Milton Friedman and their red-in-tooth-and-claw school of laissez faire capitalism, we’ve always voted against those damned Democrats for fear they’d arrogantly think they could run our incomprehensibly multi-trillion dollar economy better than the free markets comprised of the free men and women  who actually make it happen. Now we’ve got a Republican president who arrogantly thinks he better knows how to run both big and small corporations better than the executives who have made them successful, however, and at the risk of being called Republicans in Name Only we can’t say we like that any better.

The constantly feuding President Donald Trump’s latest feud is with the iconic and still-formidable General Motors Company, where the brains behind the operation have decided that their long-term fortunes require them to shut down five plants and lay off 14,000 workers in the United States, which Trump would prefer they not do, and he’s threatening whatever punishments he has at hand if they go ahead and do it. Most of those plants and workers are in some of the industrial midwest states that provided Trump his improbable electoral victory based on his promises he would protect manufacturing jobs, so we can well understand his political calculations, but Trump’s underlying economic theory is not so obvious.

General Motors’ explanation is that by shutting down those five plants and laying off those 14,000 workers they can reinvest the money they’re currently losing in more efficient plants with workers building more profitable products in the scarily looming days of self-driving cars and other high-tech automotive gizmos, and that if they don’t the whole company and all of its workers might eventually be out of business. We don’t know any more about the automotive industry than Trump seems to, but given General Motors’ long tradition of existence to its workers and customers we’re inclined to believe its executives have a better grasp of the company’s situation than we or Trump have. We’ve long observed that success of capitalism involves some creative destruction, and this looks like one of those situations.

We have sincere sympathy for those 14,000 thousand workers and everyone in those five communities that will see a major segment of their economy shut down, even if they don’t affect our non-existent political careers, but we’d hate even more to see the rest of General Motors’ hard-working employees eventually be put out of work in a futile effort to sustain an unsustainable status quo. We’ll always remember how our beloved Boeing executive Dad used to agonize over the layoffs he was sometimes forced to make to keep that company the world-beating entity it is today, Life is undeniably tough in the red-in-tooth-and-claw free market world, yet it does seem to get better over the long run, and so far we haven’t found any damned Democrats or damned Republicans who can credibly claim to make it better yet.

So far this Trump fellow’s meddling in the economy strike us as arrogantly intrusive as anything that even a self-proclaimed socialist such as Sen. Bernie Sanders or any damn Democrat might have done if they’d had the chance. Republicans used to complain that Democrats wanted to choose the winners and losers, but Trump’s trade wars have provoked retaliatory tariffs and thus chosen the steel-making sector of the economy over the steel-using sector that includes General Motors, the coal-mining industry over the many industries that would prefer to use less expensive and more environmentally-friendly sources of energy, and he also prefers the mom and pop Main Street retailers over an e-commerce giant offering better prices whose owner also happens to own that troublesome Washington Post. So far it’s worked out well enough, but recent trends and ancient history suggest it won’t last forever.

Trump is still feuding with the iconic and steel-buying Harley-Davidson motorcycle company, which shifted some work to Europe to get around Trump’s trade war with that entire continent, and now he’s threatening tariffs that would raise the cost of the Apple Computer Company’s hugely popular designed-in-America but made-in-China I-Phones by a hundred bucks or so, which probably won’t play well with young voters.  Apple dominates the huge high-tech sector of the American economy that has lately been taking a beating on the stock markets, which was helped wipe out all of the last year’s overall stock market gains, so the threat strikes us as both economics and bad politics.

Trump is currently blaming the stock market’s recent swoon on the guy he appointed to be Chairman of the Federal Reserve Board, which has recently nudged interest rates up slightly to a point that’s still far lower than historic norms in response to what Trump boasts is the great American economy ever, but we trust that the Fed knows more about monetary than Trump or we do. The inflation rate is a full 11 points or so lower than the worst we’ve seen since way back in the ’70s, but it is outpacing the modest gains in wages that Trump likes to brag about, and the Fed seems to be acting according to the time-honored economic principles that the free market has mostly thrived on. Lower or at least steady interest rates would be a short-term gain for the president, especially after two trillion dollars of debt that’s been racked up by his administration despite the best American economy ever, but in the long run we’ll better trust better than Trump the time-honored economic principles and the creative destruction of the free markets.

Nowadays that makes us Republicans in Name Only, and we have no faith any damned Democrat would do any better than Trump has, so for now we don’t have much say in the matter. Those immutable laws of economics and their awesome market enforcements are more powerful than  anything n the universe anything but God, however, and General Motors and Harley-Davidson and the Federal Reserve Board still hold some significant sway, and we expect they will eventually prevail over such puny forces as Trump or those damned Democrats.

— Bud Norman

Looking Back Longingly

Way back in our teenaged days we had a summer job collecting signatures to get the Libertarian Party on the ballot in Kansas and Missouri, and the pay was not bad by ’70s high school kid standards, the work was interesting, and we liked the cause. Now that we’re looking around for some presidential candidate to vote for other than the Republican nominee for the first time in our adult lives, and suddenly feeling nostalgic even for the ’70s, we’re giving the Libertarians another look.

After ten years of second-rate public education and all the social engineering and other governmental bullying we’d already endured, not to mention all the Watergate hearings we’d raptly watched and the recent footage of the evacuation helicopters lifting off from the embassy in Saigon and the impending election of Jimmy Carter, the Libertarian Party had great appeal to our youthfully rebellious selves. We were already reading Milton Friedman and Friedrich Hayek and trying to slog through Adam Smith’s more archaic prose, and we’d lived through wage-and-price controls under a Republican administration and could already see the coming “stagflation” and Misery Index that a Democratic administration would surely bring, so the party’s free market purism made perfect sense. The Libertarians were mostly an unchurched lot who didn’t want religion imposed on them, but we had no desire to impose our religious beliefs on anyone, and indeed one of the tenets of our religion was that it must be freely chosen to do anybody any good, and they were also passionate about religious freedom and not at all the types to impose their non-religious beliefs on anyone. They were passionate about all the essential God-given and Constitutionally-protected freedoms, as we were, and then as now neither of the major parties were reliably stalwart about them.

The Libertarians were admittedly radical, and of course that had some appeal to such surly young ’70s punks as ourselves. They wanted to do away not only with all that Great Society nonsense that kept getting us beat up through junior high, but also to get rid of all that New Deal nonsense our beloved grandparents had voted for and our beloved parents had accepted as ineradicable facts of life with their votes for Eisenhower, and it didn’t bother us a whit. We had no confidence at that point that the government would be able to keep its promises to those of us at the very tail end of the already obviously awful Baby Boom generation, and figured we could do better with noticeable sums the government was already taking out of our meager summer job paychecks. Our surly ’70s punk cynicism extended to those hippy dippy teachers we’d already encountered, who were as bullying a bunch as we’ve met in a lifetime full of bullies, and we figured that if the government would limit itself to arresting and trying and imprisoning rapists and robbers and such as well as keeping the Commies at bay and a very few other things necessary to promote the common welfare we could handle the rest, and we appreciated that they thought so as well.

Although the Libertarians were the very antithesis of communism they were averse to doing anything about it until those Cuban paratroopers from “Red Dawn” started falling from the sky, which was a problem for us even in our younger days. We were also already reading Solzhenitsyn and Sakharov and Havel and all the samizdat writers, and the vindicated-by-history Reader’s Digest and National Review, and for idiosyncratic reasons we hated communism and every other collectivist ideology that would crush the individual who stood in its way, and our by-then long experience of bullies informed us that more collectively strong response was required.

That same summer we worked for the Libertarian Party we were rooting for Ronald Reagan’s insurgency campaign against Republican President Jerry Ford, and we even drove up to Kansas City to hang around the convention center where it fell short. The defeat made the Libertarians all the more appealing, but when the determinedly anti-commie and as pure-as-you’re-gonna-get free market capitalist and traditional values guy who didn’t seem all that interested in imposing them on anyone Reagan did win the nomination and the presidency we found what seemed a natural home in the Republican party and remained there until Tuesday night.

The Democrats are even worse than in the ’70s, which is saying something, so of course we won’t be voting for any of those. The Republican candidate is the worst ever, though, and promises to leave all those entitlement programs untouched and boasts of his very impure crony version of capitalism and has publicly threatened to punish his press critics and has no values at all and is quite willing to impose them on anybody and is in general the worst sort of bully we’ve ever encountered, so we won’t be voting for him, either.

Which prompts our reconsideration of the Libertarians. So far as we can tell they’re still free-market purists, which still makes sense to us. Those entitlements that the major party candidates both claim they can still somehow save still don’t seem worth saving, and we note that the Medicare trustees have pin-pointed that program’s collapse to the very year we’ll turn 65, just as our surly and cynical ’70s punk selves predicted. We’re almost certain to have to fend for ourselves in our old age, but we’ll still appreciate that the Libertarians thought we could do so. These days the social issues are at the point where the conservative survivors of the culture wars are being rounded up and lined up against a firing squad, and so far as we can tell the Libertarians are still passionate about religious liberty and disinclined to impose their mostly unchurched values on some Christian baker or photographer who who doesn’t want to go along with the collective’s momentary notions of morality. We have no idea where the party stands on some creepy male individual’s right to hang around women’s locker rooms, but both major party nominees are cool with that, so how bad could they be?

There’s still that crazy isolationism, but at this point neither of the major parties seem any better. The Democrat is that woman who offered the “re-set” button to Russia’s revanchist dictator Vladimir Putin, the Republican has openly expressed his admiration for his fellow bully and his campaign manager and top foreign policy advisor are both business partners with the former KGB agent, and meanwhile he’s threatening all our North Atlantic Treaty Organization partners that they’ll have to agree to his really great deals or he’ll let the whole thing go, so how bad could even the Libertarians be?

They’re a friendly and fun lot, too, these Libertarians. We still fondly recall traveling to Kansas City with a couple of older party workers to gather signatures that memorable summer, where we pleased to learn that Paul McCartney was playing a concert that evening at the old Kemper Arena. The older fellows rightly figured that the crowds outside the event would be amenable to signing a petition to get the Libertarian Party on the ballot, and when we arrived we found three long lines that we each began to pester. Meeting up at the pre-determined spot we were proud to say that we’d garnered some 100 signatures, the older fellow boasted of 120 or so, and the oldest said that he’d only gotten 10 signatures but had scored scalped tickets for everyone and a bag of marijuana. The concert was most enjoyable, and although we didn’t accept their generous offers of a toke we must have gotten what the kids call a “contact high,” because we remember thinking that Linda McCartney sounded great. Two summers later our summer job was interning for Republican Sen. Bob Dole, and it was also a good time, and we got to hang out with two future governors of our state and a lot of other very bright people, including one fellow who was proudly a member of the Prohibition Party, which some still appears every years on the Kansas ballot, and which we’ll also investigate, but we still fondly recall our Libertarian days.

The party hasn’t settled on a nominee yet, but the odds are he will again be former New Mexico Governor Gary Johnson. With both of the major party nominees being widely despised, and Johnson being almost entirely unknown, we give him an outside shot. He’s also an outspoken advocate of legalizing marijuana, and if he gets any traction with the issue we expect both major party nominees will soon also be on board, and given the more likely outcomes of this election some legal weed might come in handy.

— Bud Norman

Independence Day

The past several Independence Days have been bittersweet. It is still sweet to celebrate the ideas of life, liberty, and the pursuit of happiness that gave birth to our nation, but there’s no escaping a bitterness when looking around at what has become of them.

Almost everywhere is evidence of the decline and fall of America. The news briefs on the radio invited us to take heart in the latest job numbers that have pushed the unemployment rate down to a more or less respectable 6.1 percent, but they were too brief to mention that the number of working age Americans not working actually increased, that the number of full-time jobs actually decreased, and that the more the U-6 rate which includes the underemployed and involuntary part-time workers and discouraged workers remained at a Depression-era 12.1 percent. That $17 trillion of debt and all the bubble-inflating money printing that has kept the numbers even at these sluggish levels also went unmentioned, and of course there was no time to consider if the looming disaster of Obamacare and its incentives for employers to hire part-time workers who rather than pony up for the mandates on full-time workers has anything to do with it.

Obamacare and all the rest of the thousands of regulations and taxes and assorted governmental intrusions into the economy are clearly part of the problem, but there’s a nagging suspicion that it’s not all that’s gone wrong. The government is bossier and more lawless and as as incompetent as ever, as shown by the relentless storers about everything from its use of the almighty Internal Revenue Service to punish the dissenters to the endless waivers and delays and recess appointments and far-reaching executive orders issued by the president to the infuriating mistreatment of American veterans by their health care service or the administration-made invasion of illegal immigrants unfolding on the nation’s southern border, but none of that would have happened if the public hadn’t allowed it.

Another one of the great ideas that gave birth to our nation was a notion that America and its and government aren’t quite the same thing. The government had important work to do, and over the years it has done it with varying degrees of success and ethical behavior, but the heavy lifting was done by the likes of Thomas Edison in his laboratories and Duke Ellington at the Cotton Club and Milton Friedman in his office at the University of Chicago’s School of Economics and those guys eating lunch on the beam of the New York City skyscraper in that iconic photograph. The people used to do great things, and the government would let them, but for whatever reason we’re seeing less of it these days. Nowadays the great inventions are new social media and libido-boosting pills, the music no longer swings or bops or boogies or rocks but rather just thuds a monotonous nihilism, the big economic idea seems to be that no one should be allowed to get rich, and the photographer in search of an iconic image will have to find a disgruntled fellow in casual Fridays attire sitting glumly in an office cubicle. There’s still some space left between the government and the people, but it isn’t being put to good use.

Fireworks are already being ignited around our neighborhood in defiance of the city’s ridiculous ban, though, and the people of a small town in southern California have just risked the wrath of the high-minded media to repel an invasion of illegal immigrants, and some encouraging polls show people are wising up about the government. Ideas such as life, liberty, and the pursuit of happiness are not easily extinguished, and might yet reassert themselves. There’s still some room left to make them happen again, and people who still prefer them to free contraceptives or the state’s protection from an oversized soft drink, and reason for hope.

A former Miss Texas has invited over to her swank lakeside home for a party, and a hipster pal down the street has asked that we join him in blowing things up along the banks of the nearby Arkansas River, and we’ll charcoal some hamburgers and bratwurst in between and revel in the sweetness of the American idea. Come Monday we’ll resume our modest efforts to make it come true again, and we urge you to do the same.

— Bud Norman