We are due for a recession

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New York Stock Exchange, courtesy wikimedia.org

I hate to say I told you so, but it looks like the world is starting to catch up to the fact that the “Trump Bump” isn’t going to happen. As I detailed in my earlier post, stocks have been rallying around Trump while the real economy (wages, job growth – the types of economic factors that impact our daily lives) has been stagnant or growing very slowly, and that is a cause for concern.

Wall Street had hoped that Trump (and perhaps more importantly a Republican government) would bring them what they had been craving for decades – tax reform and entitlement cuts. This was their moment, the moment the business class had been dreaming about since they were drinking out of kegs, finally arrived with billionaire Trump sitting in the White House. What the business class had not factored in was the obvious dysfunction a Trump White House would bring to Washington (as if we needed more dysfunction in Washington), as well as the fact that the market was rallying far before he had even done anything.

This has been the singular issue in the entire economic recovery since the 2008 crash – the stock market has been rallying to new records while the average American sees no change in their daily lives. They are paying more for the same services, making the same amount of money, and seeing the job market dry up – all while Wall Street is all over their TV in a record-breaking rally. It’s no wonder the one uniting factor in our most divided political climate is a resentment for Wall Street. The only thing keeping demand moving has been the artificially low interest rates, so it’s not like the Fed can just cut rates again.

This time, the stock market had hoped that Trump would provide a foundation for the record growth in stock valuation since 2008, but it seems this will not be the case as Wall Street finds itself built upon quicksand. And worse than what happened in 2008, we do not have competent leadership (or good ideas) to help us ride the storm in case of another crash.

So far Trump’s economy looks a lot like Obama’s, with the exception that Obama had been trying to lead our country towards the movers of the 21st century economy – energy independence through solar, wind, and natural gas energy; easy access to community college and training; apprenticeships in the trades; healthcare; automation; etc. Trump has moved against all of this in a totally reactionary shift in policy in an attempt to protect 20th century sectors like coal and manufacturing. So while the United States moves to protect the jobs of the past, countries like China will pass us by with the jobs of the future.

Every 7 or 8 years since the dawn of the market, there has been a recession, and we are long overdue now. How Trump and the Republican government respond to a crisis like this is anybody’s guess.

Ronald Reagan is rolling in his grave

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Donald Trump abandoning the Paris climate agreement, courtesy businessinsider.com
Ronald Reagan viewed America as a “shining city upon a hill.” His vision saw America holding the torch of liberty for the world to see – a shining example of the power and prosperity that can flow from freedom, liberty, and democracy. That our power comes from our freedom, not despite it, and that our power will be used to protect and project the truth to world, along with our democratic values.

You might call this a “right makes might” worldview. A worldview that has grown and flourished in the years following World War 2, its basic assumption is that America is powerful because its institutions – freedom, democracy, capitalism – are right and just.

Compare this to the worldview shared between autocrats like Vladimir Putin and the alt-right, who see the world as a proverbial game board where those with the power to do so have not only the right to bully the others, but the moral obligation. Those who share this worldview believe that a nation should project whatever power it has on the world stage, and that this strategy, when followed by all nations, brings about peace and prosperity.

The problem with this is that it isn’t new. This nationalistic, might-makes-right strategy, has already been tested. And it failed miserably. What inevitably happens when many powerful nations believe they have more sovereignty over less powerful nations is conflict – and after industrialization, conflict is more costly than it is worth. The world has benefited tremendously from what was envisioned by Woodrow Wilson and has evolved since 1945 – a globe of interconnected, cooperating nations that work together for the common good. Through this cooperation, nations can achieve together what they cannot do alone.

This was the basic premise of the Paris Agreement. A nonbinding voluntary “gentleman’s agreement” that laid the framework for all nations to make a conscious effort at reducing carbon emissions for the benefit of all. The success of this agreement, being nonbinding, relied on the most powerful countries to lead the way.

America was supposed to be one of the leaders. Leading the world into a 21st century energy economy would have been another opportunity for the United States to prove that it is still “a shining city upon a hill,” an example for the rest of the world to look up to and emulate. Instead, the president Thursday rolled back that leadership, leaving the world to look for a new leader – a new “shining city upon a hill,” which now looks like it could be Europe, or China, or whoever may step into the leadership void. It was a powerful signal to the world that we don’t care about you any more, and that you are on your own.

Even more than this however, Trump’s foreign policy reflects a pivot away from what has treated the world very well in the years since World War 2. Abandoning global cooperation, abandoning leadership by example in an attempt to bully the rest of the world in a might-makes-right approach to foreign policy is already beginning to backfire. We are alienating the allies that have helped us push for democracy, freedom, and capitalism throughout the world, against the forces of totalitarianism and communism. This isn’t some left-wing “sissy” view of the world. This used to be bipartisan, shared by Republican and Democrat leaders alike.

Evan McMullin, the conservative independent presidential candidate in 2016, had this to say about it, “We left this model behind after the great world wars and have benefited from a lack of their return since. Our system since has been rules-based in which all nations, no matter how weak or powerful, have the same claim to sovereignty and justice. The ‘might makes right’ philosophy, whether in foreign or domestic affairs, is an assault on truth. It presupposes that there is neither right nor wrong, but only political or military power. Where political or military power determine what is ‘right,’ there is no truth because power is dynamic and changes hands regularly. Where there is no truth, there is neither liberty nor equality, thus the reason authoritarians adopt populism so readily. There is truth!”

Reagan knew this, he knew the power of leading by example, of truth, of supporting and cooperating with our strongest allies. Why are conservatives abandoning the philosophies of their heroes, the same heroes whose name they still cite as examples of what is possible with conservative leadership?