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Trump’s Potential Fatal Errors: Not for Him, But the Country. Pt. 1

Is he stupid or pretending to be?

To this day, I have been needled by a suspicion that Donald Trump is actually a shill for the sleazy, Clinton wing of the Democratic party. I’ve said many times, including when he was just hitting the political scene, and in my book. I had a hard time coming to grips with his immaturity, impetuousness and utterly disorganized style.

How, as I have often asked, here and elsewhere, can his clearly erratic behavior be actual stupidity and not just political shtick? Is he really trying? Or is he putting a four-year monkey wrench in the GOP, damaging their brand for the next decade?

Don’t get me wrong. When he seems to have at least gotten a basic concept right, I have been happy to say so. But he still gets so much wrong. And so many people seem to have it in their heads that Trump is a genius and worse, they think he is a conservative.

He is neither.

I’ll give you an example The President gets endless praise for his tax cut. But, with just a little ass kissing by congressional leadership, he owned a pathetically watered down version of a cut, without the valuable reform he had promised. If you were paying attention and not just celebrating this fig leaf legislation, you came away thinking what a sucker this guy is. With the slightest stroking of his ego, Trump will sign off on anything.

Continuing the same example, with little preparation and in complete ignorance of history, Trump spiked the entire economic uptick the tax cuts did provide with the monumentally stupid tariff announcements and implementations.

I will go into greater detail about this in my next book.

The costs of the Trump ego

Tariffs are wrong on too many levels to fully catalog here.  But a few aspects do leap out in this case.

1) First, as is ALWAYS true, tariffs help the bottom lines of the protected companies ONLY and, without exception, hurt the wider economy. The very people who are singing the praises of the administration’s get-tough trade policies are the ones being hurt by it, along with the entire world’s economy.  

President Donald J. Trump

2) If you follow the news cycles from Trump’s election, through the tax cuts and through the tariff announcements, you can plainly see that our economy was expanding beautifully. This was the direct result of someone – anyone – other than BHO going to the White House and that someone was talking about free market concepts.

As a result (and because we are still the world’s largest consumer economy) the world’s economies were expanding apace.  Even the PIGS (Portugal, Italy, Greece and Spain) were suddenly healthy again. 

But along with the rest of the world, our markets were thrown into turmoil and volatility because of this very stupid tariff idea.  The PIGS are now talking about defaulting again.

As ridiculous as the idea of tariffs already is, the way Trump rolled them out (i.e., with no forethought) we have this untenable situation as a result!

3) On top of the damage EVERYONE but the cronies who own the political whores feel, tariffs don’t work. They never have and they never will[1].  This how it will all play out:  We will place tariffs on whatever. Other countries will respond in kind (or maybe not because they already skim money from us on a huge scale.)  There will be “negotiations”.  In the end, when we’ve all had a bellyful of this stupid idea, all parties will declare victory and we will go back to where we all were before, relative to the economies of each country involved.

source: The Spectator

4) As was the case in the Travel Ban and the Zero Tolerance border policies[2], rolled out by executive order early in the Trump Administration, tariff actions were announced and launched impetuously and without any adult supervision. 

The result? Peter Morici, a respected economist, points out correctly that we now have barriers to raw materials for, say, bicycle parts and metal tubes, but no barriers against foreign bicycles.  As a result, American bike makers have to pay more for their raw materials, giving foreign makers a market advantage.  MEANWHILE, YOU NOW PAY MORE FOR A BIKE BECAUSE NO MANUFACTURER, FOREIGN OR DOMESTIC, IS IN THE BUSINESS AS AN ACT OF CHARITY!

5) In order to do what only Congress is permitted to do (introduce tariffs) by executive order, DJT declared our trade deficit vs the rest of the world is a national security issue.  Am I the only person who see how perfectly insane this position is? 

For more about the roots of this tariff debacle, and my earlier warning, read this.

Give me fair trade or I’ll kill you

Was the rest of the world going to attack the United States because we made it too easy for them to sell their goods here?  Were we on the verge of nuking Canada because of their unfair treatment of American dairy farmers? I’m going to go way out on a limb here and say neither was about to happen?

I would submit, and history does insist, that the placing of tariffs, especially by a stronger nation, are more likely to be the catalyst of unrest and even war.

Look at Germany immediately before and then after the clearly discredited Smoot/Hawley tariffs were rolled out.  Germany was struggling mightily to recover from World War II.  As they were beginning to turn the corner, people like Hitler were looked upon as weird opportunists, trying to advantage of Germany’s weakened, but improving, state of affairs.  Our market collapse in 1929 sent shock waves through the world economy. But the suffering was well distributed. Countries like Germany were continuing to work their way into world markets albeit at a slower pace.

Smoot and Hawley, two old men pictured from 1930s.
The authors of Smoot Hawley (that would be Smoot and Hawley themselves) the Dumb and Dumber of 1930.

Then along comes the Smoot/Hawley debacle.  Immediately, what was left of Germany’s chances of recovery were put off by at least a decade.  Already weak, the German economy had the chair kicked out from underneath it.  Suddenly, the blame-the-rest-of-the-world activists, including Hitler and the Communists, were seen as visionary. When you are dangling over the edge of the cliff, you’ll grasp at anything.

Germany, circa 1930 – 31 would be similar to our PIGS now. Their politics and economics are in ever increasing disarray. The tariffs aren’t helping them or the US in any way.

The cliché is: “When goods stop crossing borders armies soon will”.  It’s a cliché because it is true. So the talk of needing tariffs for national security reasons was undiluted bullshit from day one.

But, boys and girls, if I may be permitted the microaggression of noting the difference, we are now facing a far greater threat from Trump than any harm this tariff lunacy might do to us.

In an upcoming post I will outline the greater threat and the stupidity (not just Trump’s stupidity, this is widespread ignorance) behind it. In a separate post I will define the clear solution to our trade deficit.  I will give you a hint about the latter: We are SUPPOSED to have trade deficits with just about every other country because we are stronger and richer than they are.


[1] Read Economics in One Lesson by Henry Hazlitt.  It is a college education in one easy-to-read book. You can read it free here.

[2] The author supports both concepts, generally

 

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Vanity Fair Ought To Be More Careful

One of my future books is going to deal with just how wrong so many people can be about so many things. The reasons for such wrong-headedness are simple: One is immature or unprofessional writers, either out of ignorance or agenda, splashing stupid all over the web. The second is that we, as information consumers, tend bite into information in small chunks and swallow it all without questioning anything (especially if it validates our own misconceptions – confirmation bias). A glaring example of an agenda-laden package of stupid delivered to the world came from a Vanity Fair HIVE article in the September 2018 issue by Susan Fowler.

 

Right out of the gate, I am forced to set aside my incredulity if I am to believe her unofficial poll numbers about how many gig workers you’ll see at any given moment in San Francisco.

 

A gig worker is someone who works as an independent, performing app-driven or limited, self-driven functions. Uber, Lyft, Grubhub, etc. are examples. But there are others.

 

Bloody hell! If her outlandish numbers regarding how many gig workers there are in SF, all buzzing about on their assigned errands are true, then her city is an Uber-Valhalla! Forgive the pun, but I’d have liked to have experienced that utopia as a gig worker.

 

 

But like almost all information you’ll receive when motivated by a crusade or simple self-righteousness, the numbers in Susan Fowler’s article require a mystic suspension of disbelief.

 

Here are some real stats gathered from sources like Forbes, US News, Pew and others.

 

34% of the workforce fall into the category that some very loosely define as gig worker. This definition includes people who work 2nd jobs or work freelance. An example of the latter might be a really good-looking author/furniture maker who lives in Vancleave, Mississippi, whose initials are Matt Jordan.

But that is not the type of work the article refers to. Nor does the previous paragraph fit what most people define as gig work. Can my writing be considered gig work? Meh. Some would say yes, but I have only ever written one article based on a request. So I say no.

 

24% of the work force does report that they have received payment for work performed for an app-based service. Now we may be talking Uber or Wegolook, etc. But we would also be talking about affiliate marketers and gig writers, Fivvers who don’t run the streets in pursuit of the next gig. Further, that 24% includes many people who already have jobs and are only doing gig work part time. You won’t see the majority of these people flitting about the streets of San Francisco during the business day.

 

So, eight out of ten random passers-by, as Fowler states, being clearly in her line of sight, in pursuit of an app-based occupation is exceedingly difficult to believe. But perhaps she just happened to be counting on the exact date and time when an almost impossible number of gigsters just happened to collide on the same street corner. Perhaps two Lyfts and an Uber wait for riders, a Postmate glides by on a bicycle while three Grubhubs are delivering to nearby buildings. Meanwhile a Wegolook guy is measuring dents on a Prius with an “I’m with Her” bumper sticker on it (hey, this is San Francisco Vanity Fair is talking about). But when Fowler writes “eight out of every ten” it implies she sat and counted to ten several times and spotted dozens of gigsters. 80% of her total! Stephen Glass suddenly leaps to mind.  Vanity Fair ought to be more careful, even with “opinion” pieces. [emphasis mine]

 

San Francicso is populated enough to represent a fair cross-section of the population. When you only have 24% of the population being paid by the gig and at that, many working after business hours, and most of them not doing it in public, you have a very small number of people to count at any given moment.

 

But all that is prologue. It’s the meat of the article that offends the intelligence in more subtle ways. Take the time to consider what Fowler is trying to say (and not to say).

 

A quote (with my comments). “The gig-economy ecosystem (just “economy” will do – “ecosystem” adds a layer of bullshit and tips your hand right out of the gate) was supposed to represent the Promised Land, striking a harmonious egalitarian (PLEASE!) balance between supply and demand.”

 

The article is loaded with emotionalist tripe like this. But lets start here.

 

  1. These are just apps. Yes, even I have used the term gig-economy. But there is nothing magical about it.
  2. “Promised land?” “Harmonious egalitarian balance?” Seriously? Did an adult write this? Sweetie (Ms. Fowler), there is no such thing in the conduct of commerce as harmony and egalitarianism. Commerce is by its very nature competitive and cyclical. I sell you my widget for as much as I think you are willing to spend. You decide you want the widget more than the money you hold in your hand. If there are competing widget companies out there, I have to price my stuff to outperform the others. But you can shop more judiciously. So there is no balance. There are only cycles that reward or punish the buyers and the sellers. If supply and demand were balanced (and we pretended to be “egalitarian” – none of us are) we would all pay the same amount for everything. Wow! A pig just flew over my house!

 

Here’s another gem. From the start, it is clear Fowler is on a crusade. First she talks about the billions Uber, Lyft and Instacart are worth (rich people implies bad in the context of the article). She then talks about “- A class of workers who aren’t protected by labor laws, or eligible for benefits provided to the rest of the nation’s workforce – “.

 

It would almost move you to tears, if you were utterly ignorant of how the world works.

 

In response, we’ll stick to Uber drivers. Uber is the big gig on the streets.

 

These drivers are 1099, self-employed people. It is rare that a 1099 worker would be eligible for most of what an actual W-2 employee would be.

 

For example, a 1099 worker is not obligated to work in an inherently unsafe environment. So if my builder, Kenny, refused hang from a rope to paint my house, no matter how funny that would be to watch, I can’t force him to do it. Other than those kinds of considerations, a 1099 service provider need only supply what he promises and to take care of his own benefits. THAT IS THE NATURE OF THE RELATIONSHIP YOU HAVE WITH THEM! That is WHY they are 1099 and not W-2!

 

Here’s another doozy. Fowler quotes the New York City Taxi and Limousine Commission. They represent people who would not have jobs if not for a) BAD rich people and b) people on expense accounts that don’t care what transportation costs. And their constituent group, taxi and limo drivers, hates Uber as much as the buggy whip makers hated car makers.

 

Anyhoo, the commission, after stroking the stats as thoroughly as possible said that 85% of rideshare drivers earn less than $17.22 an hour.

 

Whoa! Stop the presses! Say What?! You mean to tell me that 85% of the drivers in New York sit like gargoyles waiting for that ping to come, then drive their cars from here to there, and they don’t get paid $17.22 to do it? They actually decide for themselves whether the amount they do get paid is worth schlepping around the city for?

 

I have two news flashes for Ms. Fowler. First the commission has no way of accounting for cash tips. In some markets, they are substantial. Second, when you sign up for Uber or Lyft, they promise no minimum (unless there is a special on for your first 30 rides only). What Uber does say is that nationally, their drivers can earn between $8.00 and $15.00 per hour.

 

So after the commission pencil whips their figures, the threshold for describing driver earnings is $17.22. I say WAY TO GO NEW YORK!  And to the drivers earning more, I compliment you on your ability to ferret out good money spots!

 

In Fowler’s piece there is mention of the Supreme Court of California ruling that Dynamex must pay its gig workers like full-time employees.

Big headline: California court rules against the laws of economics to the general detriment of most entrepreneurial individuals.

 

So what else is new? I read the weird standards they held must exist for an employee to be considered independent. By that standard countless lives can be ruined all in the interest of making sure no one gets ahead.

 

Now in fairness, in the case cited, Dynamex may be abusing the 1099 independent contractor rule. I don’t know. There are companies out there who say they are just an app-based service and gig workers work their own hours and are their own bosses. Then gigsters find out they are closely and personally managed and they must work the hours set for them. There are some that even have reporting requirements. This should be illegal, and it probably is. It is certainly a misrepresentation.

 

But Uber and Lyft certainly don’t fit that description. Drivers really do turn the app on when they want to work and turn it off when they want to stop. They have no minimums to meet. No one calls demanding an accounting of your time. No one chews you out for how you go about your business. If you are found to be unethical, you get canned. Perfect!

 

Fowler, who used to work for Uber as a software engineer, is now beating her breast in guilt at the Frankenstein she feels she helped create (a combination of an over-bloated sense of self-worth and drama queen syndrome). She said when she talked to drivers they claimed no matter how hard they worked they could only cover gas and maintenance on their vehicles and little else.

 

There is a technical term for anyone who would do that repeatedly. The term is SUCKER. I know from experience, in a very tough market that you are not going to get rich driving rideshare. BUT…if you are in a market where you are not making any money at it, why the hell would you continue to drive? My advise would be to network with other drivers and fix your problems, or quit. There are places in this world where there aren’t enough riders for Uber to be worthwhile. Only an idiot would repeatedly go out and spend six, eight or ten hours at time, away from home and relaxation, and not be able to collect a paycheck.

 

But one is left to wonder about which drivers Fowler was speaking to. Could it be her professional exposure was limited to complaints? That she never heard from the drivers who were actually killing it?

 

There is a lot more drivel, leading predictably to an obvious conclusion, notions like functions being broken down (as they are with gig work – making it so anyone can do them) into dehumanized pieces.

 

Well! Isn’t Susan just full of her socio-political self! What is a humanized task as opposed to a dehumanized one? How about cleaning a network engineer’s toilet or parking their car? Which is the humanized task? But yeah, we know where this is going.

 

When a group of Fowler’s low-level engineer bubbas were sitting around talking about how terrible their employers are, or how frightening the technology that feeds them has become, one person asks (you have to sigh here), “What can we do about it?”

 

The answer? You guessed it. Gig economy workers MUST unionize.

 

Rideshare drivers frequently see ringers come into their online groups waving the union banner. With the exception of a few people who don’t understand what is it they are doing as drivers or delivering food or measuring dents in cars, the ringers get laughed off the page.

 

Anyone who does 1099 work does so because either they wish to AUGMENT their income, or they wish to control more of their own time and effort. They reject the notion of a boss or a time clock. They will trade set effort for an agreed price – voluntarily. Any gig worker who claims to be abused by “the man” and still turns the app on tomorrow is an idiot.

 

So who will the union protect gigsters from, themselves? The app they are using? Their tool bag? Will a gig worker help widen his market reach by filing complaints against – who – the customer? Or would unions end up killing the golden goose, which is USUALLY the case.

 

Unions come with a truckload of time-wasting, overly complex work requirements. They also hide behind mountains of legal bullshit, required to maintain their very existence, which would cross the eyes of a hydra. How is the average Uber driver going to contend with that?

 

At the beginning of this piece I said people often buy off on stupid things because they read it in important places, like Vanity Fair. In Susan Fowler’s case, the story is drenched in frightening or dramatic drivel. If you don’t have time to digest it, you might even buy into it.

 

But it is thinking like hers that holds us back from realizing the full potential of what we can accomplish as persons, a company or an economy. And yes, this includes all the risks that come with any worthwhile endeavor.

 

So if you like having a rideshare ready to come pick you up and cheerfully take you wherever you want to go, at a great price, you might want to blow off Ms. Fowler’s heart tugger. People like her will ruin the concept.

 

Matt Jordan is an author, furniture maker and occasional gig worker living on the gulf coast.

 

 

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Is All This Tariff Talk Real? I hope Not!

Is all the Trump tariff talk real? Or is this just a better-orchestrated rehash of Trump vs Pina Nieta 2017?

Do you remember when President Donald Trump begged Mexico to pay for the wall, or failing that, at least not to say publically that they wouldn’t?

Of course, you don’t. If you linked here from FB you probably can’t remember what people were pretending to care about just before they pretended to care about illegals being separated from their kids. (It was Trump meeting with the crazy fat kid – even though the same people pretending to object to the meeting were insisting on it the week before Trump announced the meeting.)

But the idea behind the phone call to Mexico, cited in the link above, was to create theater around the border wall issue. I believe that by mid-2017, the Donald already realized the slim chance he had of getting a needless wall built. But his entire political trajectory is predicated on him being the Ultimate Deal Maker. Building the wall was supposed to be one facet of this title.

He isn’t a great deal maker. He never was. As streetpolitics.us has pointed out in other pieces, citing a variety of sources, Trump was never the big deal maker in the multi-billion dollar empire that bares his name. He was the face man. He was the dog-and-pony show that kept the flamboyant public image of empire alive, and the big money marks occupied, while the real deal makers hammered out real business. Ultimately, after it became apparent that he had no mature interest in the actual running and monetization of the corporation, the board fired him from positions of real responsibility and paid him a monthly stipend to stay on as the public entertainer-in-chief.

But hey, it’s an image, right?

When Trump first donned the MAGA hat and announced his candidacy, he knew that most of the public was blissfully unaware of his real role in Trump Enterprises and counted on his undeserved “Gordon Gecko” image to say that he would make “great, great” deals as president. “Such beautiful deals!”

But when it came time to actually perform, we found the Donald woefully lacking.

President Donald J. Trump

For example, when Trump did call Mexican President Pena Nieta in 2017, not only did he tip his entire hand, leaving himself no avenue of attack or retreat, he made a series of cringe-worthy gaffes which for some reason, even his political detractors didn’t really hammer him for. But Trump displayed an ignorance of parlay not seen since the Duke of Edinburg demonstrated the diplomatic skills of a Moe Howard on Chinese soil.

Along with racial groupings that only a modern “liberal” would conflate (because modern liberals are racist), Trump suggested to the president of another nation, that although his “wall” was the least important thing being discussed, that it would be helpful TO TRUMP if they would pay for the wall or at least stop saying they wouldn’t. This was tantamount to begging someone of an opposing point of view to pretend not to be, so the requesting party might not be made to “look terrible”.

I’ll try to address the racial gaffes in another article. My to-do list grows exponentially with such asides.

 Fast Forward

Is it possible we are seeing the same immature theater playing out with these tariff battles (minus the leaks that resulted in the WAPO article linked above)? Did Trump actually sit down with leaders in recent summits and say something like, “Look, I have to pretend to be this tough guy. So I will announce tariffs, then you can do the same and then we’ll settle back to basically where we are right now anyway. I have to do something because I said I would in the campaign. Not doing so would make me look stupid.”

If so, then the worst you can say about this “trade war” dust up is, at least in private, the leaders of the world are giggling behind their hands at the President of the United States. After a few months of posturing and stock market drama, all things will settle back to where they are right now, with a few meaningless, token changes. Trump will declare victory and the our trading partners will be happy to let him do so  because they will continue to gauge our exports as they have for the last 50 years.

I can live with the embarrassment. I would be disappointed with the result.

But what if the tariff talk is real?

What if Donald Trump really intends to use a tariff war to “help” the U.S.? Is it possible that someone who has no understanding of history or economics convinced him that haphazardly slapping several countries with tariffs is a good idea?

I will stipulate that among Facebook bozos and talking heads in the “Entertainment News” business, there is almost no understanding of history or economics. Most people in those two intellectual ghetto forums are motivated by what is politically helpful to my tribe?

 But when White House advisors start telling someone as pliable as Trump that protectionism is GOOD for our economy, well… Houston, we have a problem.

Assuming this is not a stunt, this is how Trump’s present course of action will pan out. We are hitting several key trading partners (I use that term advisedly) with broad, impulsive tariffs. They must respond in kind for their own domestic consumption. This includes China. It can be argued that they need our markets more than we need theirs. That is mostly true, but as you will see, hardly of any help in this scenario.

Very quickly, trade will slow, production will slow, and people WILL start losing jobs. Companies with the money and dexterity to quickly move production into countries, considered our to be “trade war” enemies, will do so. This will minimize some of the damage they will endure. These companies will be punished (mostly with rhetoric – look at Harley) by our deal-maker-in-chief. No one will actually be able to do anything to them legally, except congress, but there isn’t a gonad to be found among the entire 535 creatures there.

And so it will go. Eventually, no country will be able to sustain the economic hostilities. Slowly, quietly, the barricades will be dismantled, and as before, all belligerents will slowly retire to about where we are right now. As was the case in Cuban missile crisis, all countries involved will make some token gestures that will leave their home audience thinking they are strong and the international community thinking they are magnanimous. Everyone will get a participation trophy.

But after wrecking jobs and retirement accounts, nothing really will have changed in the grand scheme of things…

Except for one thing…

…The market sentiment and economic trend created with Trump’s election will be over. In fact it will see a huge reversal. Everything we have enjoyed over the last two years will be wiped out. And this COULD all happen by November of 2018. That means we could be looking at a real “blue wave” as opposed to the imagined one of today.

This is one reason I have still not completely let go of my old Trump-as-democrat-shill theory.

It all depends on whether we are looking at an opening gambit, with real free trade[1]  to be proposed in the ensuing weeks or if Trump and company are actually stupid enough to follow through on the existing threats.

[1] Real free trade is just that; no tariffs, no subsidies, no protectionism.

In my next economic piece, I will discuss REAL free trade and why we need it now more than ever.

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