The stock market is priced for perfection in a grotesquely imperfect world. Trump provided a fleeting respite by showing us how the Art of the Deal works in trade negotiations. Fox News rightly rubbed the legacy media’s face in his success while the President took a half-dozen victory laps to muted global applause. This may turn out to be more than he deserves, since no one can predict what will come of the new taxes that have been imposed on global trade. Because eggheads, editorialists and Bloomberg’s talking heads have no deep understanding of tariffs, here’s an interesting thought from someone who does — Reagan budget director David Stockman. The point he makes is too basic to ignore: If capitalism is truly free and functioning, he points out, America doesn’t need a dealmaker in the White House.
Affordability is our big problem anyway, as the nation’s erstwhile middle class continues to sink into poverty. Nearly everything we buy has become not merely expensive, but too expensive, particularly big-ticket items like homes and automobiles. The average price of a used car hit $32,000, up from $23,000 just three years ago. It can cost $400 or more to take a family to a ballgame, where a hot dog and a beer are now $25. The $9.99 breakfast special in Las Vegas has risen to $29.99. And if shrinkflation at the supermarket gets any worse, we’ll be buying staples by the gram rather than the ounce.
Putin’s Hole Cards
Inflation will not be the worst of our problems if the Ukraine war takes a turn for the worse. Putin is Trump’s only equal in global power and influence, and he will not bend to Trump’s ultimatums like the pantywaists who run Europe. Whatever Trump intends by repositioning U.S. nuclear subs closer to Russia, going to war is not an option. That leaves sanctions, which have never been known to change Putin’s mind. He has his own cards to play as well: China, North Korea, Syria and Iran.
Celebrating America’s easy victory over its trading partners may play well on Wall Street, the planet’s main source of feel-good balderdash. But the hubris is arguably just a distraction from grave economic problems that could collapse the bubble economy and stock market overnight.
In short, no, Putin — BRICS, actually — is not going to back down. What’s at stake here is well beyopnd the ambitions of a Russian expansion. It’s about a new global BRICS hegemony, a world empire if you will. While Putin would of course love to expand Russia’s borders, I believe the real purpose is for persuading the Saudis that the U.S.-led West can no longer keep Iran at bay and keep the Middle East relatively stable.
It can’t be overstated that this policy has been the global status quo for many decades, and accounts for the relatively peaceful and unprecedented prosperous world we’ve had, hitherto. But if that were to change? It would be the end of that order, as well as a U.S.-led world. Hence…
Trump isn’t likely to back down, either. Shrinkflation is bad now, but imagine if it were to double in scope (half as much for today’s prices). Then realize that, outside the U.S., it would be WAY worse. Many countries friendly the U.S. now — or at least willing to work with us — would drop us for BRICS and our economy at home would NOT fare well.
So, I believe a Mexican standoff will soon enough commence.