Wednesday, August 23, 2017

Trump During Speech in Arizona Hints That Government May Have to Shut Down

It appears that President Donald Trump is set for war on many economic fronts.

During a speech Tuesday night in Phoenix, Arizona before a crowd of rabid supporters, Trump hinted that the government may have to shut down if funds aren't approved as part of a debt ceiling bill to build a wall along the southern US border with Mexico.

The President also stated that it will be difficult to negotiate a "fair" North American trade deal and that NAFTA may have to be canceled.

The Goldman Sach crew. Goldman CEO Lloyd Blankfein, Trump economic adviser the former Goldmanite Gary Cohn and Treasury Secretay Steve Mnuchin also a former Goldmanite  (graphic via FT).
Of course, both these Trump policy initiatives are anti-free market and it is questionable how much support he will have for them now that his policy staff has been purged of anti-free trade economic nationalists. Goldman Sachs people are in charge of economic policy. They are good on trade but as crony as you can get.

David Stockman, who is one of the best DC observers,  makes the point that I have also been making:
[T]he nation will now be ruled by a Goldman Sachs Regency and a team of three generals—Kelly, McMasters and Mattis...
 Stockman is also good in explaining how the crony advice will be pushed on Trump:
What we mean is that during the upcoming battles over the crucial economic issues of the debt ceiling increase, tax reform and the ObamaCare coverage/premium crisis, Trump will be getting the worst advice imaginable. That is, these lifelong Democrats will push the Donald into attempting to make “bipartisan” deals with the Chuckles Schumer and Nancy Pelosi that will blow the tenuous GOP majorities to smitherns, and do so in the name of status quo statism.

Right out of the Box after Labor Day the destructive game plan of the Goldman Regency will show up in thundering battles over a “clean” debt ceiling. The mainstream pundits make this sound easy-pezee with the notion that Ryan and McConnell need only line up a modest number of Democrats to supplement their own rank and file GOP votes to enact a debt ceiling increase. Such purported fiscal virtue would permit Uncle Sam to borrow all the money he needs to pay his bills and protect the sacred credit rating of the US Treasury.

Except it doesn’t work that way. If the Dems cooperate at all, it will be only on the basis of an onerous quid pro quo that requires Trump to give up the Mexican Wall, tax cuts for the wealthy, his proposed deep domestic spending cuts and also to fund the insurance company bailouts that are needed to forestall drastic premium increases and coverage cancellations during the 2018 insurance (and election) year.

To be sure, the Democrats are clever enough to demand this kind of quid pro quo as a side deal rather than as an explicit rider to the debt ceiling bill, but it would have the same effect if attempted. Namely, the Freedom Caucus and the vast majority of conservative leaning congressional Republicans would jump ship, thereby setting up a replay of the Boehner Betrayal: To wit, passage of a debt ceiling bill with an overwhelming Dem majority and only a corporal’s guard of Republicans.



  1. If he really wants his precious Mexican Berlin Wall, why can't he make some spending cuts elsewhere to pay for it? [queue laughtrack]

  2. --- [...] Trump hinted that the government may have to shut down if funds aren't approved as part of a debt ceiling bill to build a wall along the southern US border with Mexico. ---

    I guess the man who wrote "The Art Of The Deal" only knows one artful tactic: shouting and kicking and holding his breath until he turns purple.