The hyperbolic anti-Trump fears are statistically over-blown and under-analyzed. The current meme is that Trump's 80% approval rating within the GOP means, he is either going to win two terms or delay the 2020 elections and become a dictator. Besides showing too little faith in the American system - one I whole-heartedly reject - the meme is statistically over-blown and under-analyzed. As we sit here in June of 2018, 42% of Americans who vote, are independent; while 29% are Democratic and 27% are Republican voters. Trump's 80% approval with Republicans, means 0.80 times 27% or 22% of voters are solidly Trump voters. He is -12% with independent voters, which means he only has 38% of the other 42% adding another 16%. Add the two numbers up and you get 38% Also, he has a gender problem with every class of female voters. How big? Minus 34%. Women outvote men in elections. Women outvote men especially in mid-term elections. King Trump? He first has to worry about the 2018 mid-term elections.
Speaking of statistics, Trump and the GOP are setting up another 1970's-like hyperinflation/high interest rate problem. The FED rarely has figured out how to softly land an economy with too high of inflation. But inflationary fiscal policy abounds. First, you have a massive tax cut, which besides driving up economic demand, adds a massive amount of new debt to the massive one we already have. Second, a protectionist tariff policy means, high prices on stuff to make stuff. Third, the change in the Iran deal, has led to higher pump prices. Finally, and there is more, just the threat of eliminating the individual mandate of ACA - while popular - would mean that hospital costs and health insurance premiums would have to go up. Health care cost, accounts for 1/5 of core inflation. Hospital costs had a 4% inflation rate pre-ACA. That fell to 2% post-ACA. But in the past six months — as Republicans attempted to roll back the ACA — hospital inflation has soared to an annual rate of 6 percent. If all of this reignites inflation, the FED has only one weapon to fight it. And that is to raise interest rates.
Speaking of tariffs .... I was out talking to some of my clients around the country this week. Because they depend on access to cheaper steel and aluminum from Canada, their clients - the one's that build buildings - are hedging their bets. A tariff means the cost of these commodities either goes up, because of the tariff, or because the local producer charges the same. Combine that with interest rate uncertainty and there is concern amongst them.
G7+1-->G7-->G6 +1 My god. 74 years almost to the date of the Normandy landings - where American boys fought, not for the conquest of land, but for the ideal of saving western democratic values - we have lost our moral authority. Trump calls Canada a security threat to validate his prized tariffs (somehow Trump voters see this as important as Mexican immigration - who's primary threat is they are leaving/not coming, at the risk of losing their children who are detained in cages - shouldn't that lack of humanity suffice?). When has Canada ever been a security threat to the US? They have and continue to shed blood in all American wars. EMBARRASSING. France's Macron: "Because these 6 countries represent values, they represent an economic market which has the weight of history behind it and which is now a true international force". EMBARRASSING. Angela Merkel Chancellor of Germany - now the West's value leader - has made clear her disquiet with Trump's policies, arguing that Germany may no longer be able to rely on its US ally. Trump's contribution to the Summit? He wants to bring back Russia. A Russia under US sanctions for the invasion of Crimean. A Russia under more US sanctions from meddling in the 2016 elections. A Russia who is backing up every alt-right party in Europe?
This one picture captures the whole absurdity. Trump - who was late and is leaving early - is being confronted by Merkel and Macron, while Japan's Abe looks on in resignation. While Trump conserves his 71 year old "best shape ever" body by sitting in a chair or crown ... EMBARRASSING.
Speaking of tradition: Justify! Justify winning the Triple Crown, at the 150 year running of the Belmont Stakes - twice the amount of time since Normandy, was as exciting of an American sporting event as there is in the world of sports. Mike Smith - a Mexican-American born in New Mexico, openly displaying his Christianity and showing his advanced age - can make every American proud. No one watching the race was thinking about what separates us. Everyone was together today. And perhaps shed a bit of a tear, seeing history happening in realtime with ethnic and age diversity. Today was a true example of what MAKES AMERICA GREAT!
June 9, 2018