Monday, January 29, 2018

STOCKMAN: What Trump Accomplished in His First Year

David Stockman writes:
Donald has managed to do essentially nothing during his first year except emit a fulsome stream of pugnacious tweets, what he has done mostly has made the big problems worse.

We are referring to his $80 billion DOD boondoggle; his $1.5 trillion red-ink funded tax cut; $800 billion of net borrowing since inauguration day; utter silence and inaction on the $2.5 trillion entitlement monster; the seconding of foreign policy to a passel of discredited generals and recycled neocon interventionists; and most especially his relentless attacks on the very immigrant workers that America will desperately need as the 80-million strong Baby Boom ages-out into Welfare State dependency.

But above all else, the Donald has whiffed entirely on what is really killing the American economy. That is, the nation's out-of-control central bank.

Via its massive falsification of financial asset prices, the Fed has turned Wall Street into a gambling casino, the corporate C-suites into financial engineering joints and Washington into a profligate den of debt addicts.

Likewise, its idiotic pursuit of more inflation (2%) through 100 straight months of ZIRP (or near zero interest rates) has savaged retirees and savers, enriched gamblers and leverage artists, eroded the purchasing power of stagnant worker paychecks and unleashed virulent speculation and malinvestment throughout the warp and woof of the financial system.

Of course, we did not really expect the Donald to take on the money printers--notwithstanding his campaign rhetoric about "one big, fat, ugly bubble". After all, Trump has always claimed to be a "low interest man" and he did spend 40 years getting the worst financial education possible.

To wit, he rode the Fed's easy money fueled real estate bubble to a multi-billion net worth, or so he claims, and pronounced himself a business genius----mostly by virtue of piling cheap debt upon his properties and reaping the windfall gains.

Stated differently, the Donald came to office wholly unacquainted with any notion of sound money and free market financial discipline. And now he has spent a year proving he is completely clueless as to why Flyover America has been shafted economically.


  1. Unemployment at 4%, (6.8% among AAs, a record low), Dow 26,000, $2000 tax cuts for individuals, the mandate abolished, $1000 employee bonuses. Coming: more deregulation & vouchers.

  2. Coming: one massive bubble popping. But both Obama and Trump contributed.