You shouldn’t pick up hitchhikers. I picked up one the other day, and he immediately said, “How do you know I’m not a serial killer?” I replied, “Do you know the odds of having two serial killers in the same car at the same time?”
– A Dear Reader
GUALFIN, ARGENTINA – Poor Mr. Trump has been upstaged. It must have been a horrible feeling. He turned on the TV and he was not on it!
It was Kavanaugh, Kavanaugh, Kavanaugh.
Even Mr. Trump’s most outrageous one-liners – wherein he said he “fell in love” with the North Korean dictator… or accused a reporter of “not thinking”… or claimed that “Canada’s been robbing us blind” – failed to boost his ratings for more than a few minutes.
But now, he’s back at the top of the headlines. First, because he is mocking Kavanaugh’s accusers… and second, because Forbes told the world that The Donald isn’t nearly as rich as he has claimed to be…
From Business Insider:
President Donald Trump has fallen 138 spots on a Forbes list of the richest people in the U.S.
Since Trump launched his presidential campaign in 2015, his net worth shrunk by roughly $1.4 billion, according to Forbes. It was estimated to be $4.5 billion in 2015. Over the last two years, that number settled to around $3.1 billion, the publication said.
Meanwhile, The New York Times released a major research piece showing that The Donald’s wealth – such as it is – came mostly from his father and his family’s dodgy tax deals.
But, at least here at the Diary, $3.1 billion is still a lot of money. And Donald J. Trump is still The Man.
And today, we’ll turn to his latest achievement – the new version of the North American Free Trade Agreement (NAFTA) – and give him his due.
The new trade deal is credited with adding 400 points to the Dow over the last two days. Investors were relieved – once again – to find that Mr. Trump is more bark than bite.
In the near term, Canada, Mexico, and the U.S. can continue trading pretty much as before; the new agreement merely jiggled and niggled around the edges of the old NAFTA and will have approximately zero effect on America’s trade deficit.
Mr. Trump sees all of life as an “us versus them” fight. “Winning” is what it is all about. And the way to win, he believes, is to growl like a vicious Doberman until they throw you a piece of meat.
In the case of the Canadian trade deal, Mr. Trump insulted the country’s prime minister, Justin Trudeau – calling him “weak” – and said he didn’t like Canada’s chief trade negotiator, Chrystia Freeland, either.
And then he threatened to block imports of Canadian-made autos to the U.S. market. This would have been a disaster for just about everyone, since autos are made by cooperating U.S. and Canadian companies shipping parts back and forth to one another across the Great Lakes.
A ban on Canadian-made cars would put people out of work on both sides of the border and raise auto prices for everyone.
But the trade negotiators on both sides weren’t born yesterday. They knew that a breakdown in trade between the U.S. and Canada would not only be bad for consumers and the public… it would be bad for them – the insiders, the cronies, and the Deep State elite – too.
So as soon as Mr. Trump turned his attention to some other fight, they went back to work and came up with a deal that was acceptable to them all.
Lo and behold, it was much like the deal that Mr. Trump had previously called “the worst trade deal in history” – NAFTA.
But at least Mr. Trump got a few morsels. He got a new name for the agreement: the U.S.-Mexico-Canada Agreement (USMCA). He got to claim victory over the wicked Canooks.
And he got some cheese, too; Canada lowered its dairy product tariff barriers. Now, American dairymen will have access to 0.24% (about one quarter of one percent) more of the Canadian market.
“It’s an amazing deal for a lot of people,” Trump said.
But the big winner was the Swamp. The feds could have simply said that trade with Canada was none of their business… that traders could perfectly well work it out for themselves.
We don’t have negotiated, crony trade deals between New York and Vermont. We don’t need them between the U.S. and Canada, either. But then, the swamp of lobbyists, anglers, and chislers would lose out.
We predicted that the trade war would go this way… Mr. Trump would bare his teeth. He would threaten. He would bark. But in the end, we guessed, he would wag his tail and lie down.
Because the biggest losers from a trade war will be those who profited most from the globalized trade preceding it – that is, the Deep State insiders and their crony friends.
The USMCA is more than 1,000 pages long. Every item has producers and distributors. And every one of them has a keen interest in getting a good deal for itself.
So the cronies go to work… and deals were cut every which way from Sunday. The pharmaceutical industry, for example, was able to get a provision giving drug makers two more years to profit from their patented medicines before the Canadians can sell generic versions of the drugs.
For further illustration, in the case of steel and aluminum tariffs, the feds opened the doors to “exemptions” and received 1,325 applications. Each one, of course, has a lobbyist behind it. And each one comes with juicy bribes – a job, a consulting deal, a speech before the National Association of Bathroom Fixture Manufacturers, and a $50,000 fee.
Deals are made… the door revolves… and the Swamp deepens.
Even more importantly, today, the whole edifice of American swag – including Donald Trump’s remaining fortune – depends on fake money lent at fake rates sloshing around the world.
The fake money – $19 trillion has been added to the global monetary footing in the last 30 years – financed the factories in China… drove the stock market up 10 times… and (along with more than a dozen bailouts from his father) helped rescue the president from his bad deals.
Meanwhile, trade with China, India, and Southeast Asia drove down consumer prices.
Interrupt trade, and the whole shebang comes apart.
Courtesy of Bill Bonner, Bonner & Partners (More articles by Bonner here)
The views and opinions expressed herein are the author’s own, and do not necessarily reflect those of EconMatters.
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