The time has come to pucker up and give Trump a kiss.
Once we find the route out of our current Groundhog Day the rest of the 2020s will be a period of recovery from our self-inflicted 2008-20 demi-depression, with its joyful occasional playmate: boom. The Covid flash depression is the paroxysm that heralds the end of a disease rather than the beginning. We can’t see clearly as we are too bewildered and confused by the data that smashes together depression and growth indicators over the 2008-20 period generally and at hyperspeed through 2020.
Little Britain has a good opportunity ahead of it, particularly as it breaks free of the European Union’s economic and political shackles. Given the inexorable radical change ahead, a clean break is preferable to separation with occasional benefits – no matter how reassuring or gratifying in the short term any continuing dalliance feels. Don’t listen to the professionals on the matter. Their role in life is to curate the past not glimpse the future.
We hate to acknowledge it, and I’m sure many will continue to deny it, but the trade freedom and safety the global economy revolves around is underwritten by Uncle Sam’s soft and hard power. Today the soft power is a potent combination of their rapacious desire to consume imports and the mighty dollar we all trade with. Our collective global bounty is as much their gift as our endeavours.
“The trade freedom and safety the global economy revolves around is underwritten by Uncle Sam’s soft and hard power.”
America haters place too much emphasis on the bad, hard power element. Nevertheless, the hard power edge is key as it’s “blue water navy” that ensures we can all trade with little friction, including strategic competitors, China and increasingly Europe. No other country can provide this global guarantee and perhaps only Japan has the naval resource and capability to do a passable job of looking after its waterborne interest on a global basis.
Looking forward, Modern Monetary Theory (MMT) and much more active fiscal and economic policy is a shoe-in for the US and UK. Regardless of whatever our leaders say and believe today it’s an inevitability as its the only path forward that is politically expedient.
“The US doesn’t really need the rest of the world very much. But the rest of the world needs it.”
In the UK we have the good fortune of rolling, five-year dictatorships that can enable radical shifts. I know, I know, it’s not all good news. But it does enable us to strike a radical new path without lasting despotism…assuming some competence of leadership.
Stephanie Kelton’s recent book is a must read. Hopefully someone has made Boris, Rishi, Michael and Dominic read it. Help set them free from their limiting economic misconceptions and give them tools for our awakening. Of course, the hamfisted Euro project prevents Europe from embracing the MMT party.
MMT will accelerate US retrenchment from the world. The more explicitly this policy toolkit is embraced the faster the retrenchment. It is clear to both political sides that concerted domestic focus is essential. It will also be necessary to buy off fiscal conservatives (elected and media) by making a show of stringent efforts to ensure this internal “magic” MMT largesse doesn’t bleed overseas.
The US doesn’t really need the rest of the world very much. But the rest of the world needs it. That includes the resource-blighted and economically-deformed China. That said, the 1bn people captured within a modern hybrid of slave and indentured labour means that China’s lucky 300m overlings (elite and Western-level middle class) have a super-powered economic tool unavailable to competitors.
We will miss the US when it is gone as it has been a relatively benign and good overlord. We shouldn’t let resentment of its wealth and revulsion towards its gaucheness cloud our judgement. The US will embrace some loyal deputies and it’s clearly a hug we Brits should accept. There’s a high chance we will need the trade, energy and food security such an alliance with the US brings, and which Europe can’t, in an increasingly unstable world as massive socioeconomic change compounds growing geopolitical and environmental stresses.
To finish I have a more immediate prediction for you. Trump will probably win the election. The Democrats have made a huge error with the low-energy, lacklustre and visibly enfeebled Biden (listen to his diminished intonation when he talks). Trump is a law unto himself (a bad one for sure) presentationally whereas Biden needs to be the full presidential ticket.
“Trump will probably win the election.”
Campaigning has been dull to date (mid September) with Trump relatively quiet and Biden mainly pointing out how awful Trump is rather than why Americans should specifically elect him. The Democrats seem to have learnt nothing from Hilary’s error.
It’s going to get super hot for the remainder. Expect a full Trump attack plus, he has two very powerful tools to use. First, the Covid crisis is passing. US infections rose dramatically over the summer yet deaths did not. Beyond New York, and specifically Queens, healthcare was not overwhelmed. Most in the US are ready to cope and move forward. Big promises could move the mood a lot.
“I confess I’ve been a little bit puzzled why Trump has notalready put this gargantuan sum to use.”
Secondly, he has a huge purse to disburse. Specifically, $1.6tr or about 8% of its gross domestic product sitting in the Treasury General Account at the Fed, up from $0.2bn this time last year. This is a transposed version of MMT in action. The Fed stepped in to support the functioning of the US government bond market and the US Treasury siphoned off a huge sum.
I confess I’ve been a little bit puzzled why Trump has not already put this gargantuan sum to use. It seems near certain he will. There are Congressional restrictions but I assume executive power can still find a way. My suspicion is that he is waiting as long as he can to let the infection rates peter out in the US so as his spending can be focused on vote winning immediate economic promises rather than the destructive electoral anti-matter of Covid and healthcare.
He’s going to whip up a storm in the next six weeks. This gives Biden very little space to counter and make a case for him rather than against Trump. Biden will lose ground apace. It won’t show up in the polls as significantly as it should as there will be a lot of silent Trump voters, many who despise him but feel unsure of the alternative. We’ve seen that political movie many times.
Whoever coined the phrase “defund the police” should be sent to Siberia. Just and rational points underlie the demand but it’s the best gift Orangeman could have wished for in our informationally-shallow hypermedia times. Add Trump’s covert use of MMT-lite and the odds of him making the winners roster are considerably higher than perceived.