Over the Falls…

Over the Falls…

Those who make peaceful revolution impossible will make violent revolution inevitable.

- John F. Kennedy - POTUS

If you tell a lie long enough, it becomes the truth.

- Joseph Goebbels – Reich Minister for Public Enlightenment and Propaganda

By J.M. Hamilton (2-12-2017)

For those who have not viewed Niagara Falls, the Falls are well worth the visit.  Particularly the Canadian side, the view of Horseshoe Falls is breathtaking and otherworldly, providing – for me anyway –as close a case, as I care to come, to sensory overload.  The sheer power, nature’s force and primal rage, the constant rush, the deafening roar, the mighty Niagara reminds me of the Goddess above.  After a short period of time when viewing the Falls, I often have to avert my eyes.  In particular, the Falls reminds me that we are an infinitesimal spec of carbon, and our life span – relatively speaking – but a nanosecond in time’s great arc.  Absolutely, humbling.

Nevertheless, our lives have purpose, and part of that purpose is to be the earth’s stewards, and hopefully, leave something better behind for our children and future generations.

JMH brings up Niagara Falls because it’s the closest analogy I can provide to the news flow issuing forth from the White House.  Simply amazing and not entirely reactive, but rather, the news flow is by intelligent design and not w/out a great deal of political strategy.  One can see the strategies of Sun Tzu, Machiavelli, Sherman’s march through Georgia, and even the Reich Minister of Public Enlightenment & Propaganda coursing through the White House’s executive orders & POTUS proclamations barrage.  (Interestingly, Machiavelli – in The Prince – recommended that a leader, who conquered a Republic, must destroy said Republic and its citizens, before it destroys him.)

The press appears blown away by it, and JMH is having a hard time coming to terms with it, as well.  If, as Hunter S. Thompson wrote, “politics is the art of controlling your environment,” and the news flow and US media are the “political environment,” then Mr. Trump – and Mr. Bannon – are kicking serious tail and taking names.  Trump - or Bannon - seemingly, wants to be a man of destiny, and clearly want their agenda adopted (or both want, to at least appear, to be making progress in that direction).

The news flow is rapid fire.  In no few instances, the news flow emanating from the White House appears to be running full throttle to divert our attention away from the prior day’s or week’s errors, or the latest public outrage.  The MSM - owned and operated by the corporate and multinational establishment – often finds itself merely reacting in Mr. Trump’s wake.  Not everything Mr. Trump has done is bad or dreadful – some of his actions are creative & positive (albeit often conducted in a highly unorthodox manner).  One would not know this, however, from the core news organizations’ reactions, the five major media organizations that control about 90% of the news flow & content.

So how do we pull back, and not allow Mr. Trump’s administration to play us with a Niagara like news flow, and/or the MSM – and its agenda -  to do the same?  The consolidation of the news organizations – seen in the U.S. over the last several decades – has led to, and allowed for, a homogenized narrative and messaging, among most of the core media outlets (that any authoritarian or totalitarian might appreciate).  Indeed, some news outlets have even been witting instruments of the two establishment political parties, and the establishment candidates running w/in the parties.  Makes sense, the plutocracy owns the politicians and of course, the media outlets.  (Hence, Mr. Trumps distaste for additional media mergers, such as ATT/Time Warner)

When dealing with complex issues and problems, JMH generally finds it’s best to pull up and take a look at the macro picture.  In this case what is Mr. Trump’s core mandate, and ultimately, will he achieve said mandate?  That’s exactly how the American people will likely judge Mr. Trump over the course of his first term.  "It's all about the economy, stupid."  Here, it’s instructional to look at Mr. Trump’s inaugural address, and its fundamental themes.

…we are transferring power from Washington, D.C. and giving it back to you, the people.

The establishment protected itself, but not the citizens of our country. Their victories have not been your victories.

For many decades, we've enriched foreign industry at the expense of American industry; subsidized the armies of other countries, while allowing for the very sad depletion of our military. We've defended other nations' borders while refusing to defend our own.

Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.

We will follow two simple rules; buy American and hire American. When you open your heart to patriotism, there is no room for prejudice.

(JHM’s underline.)

Mr. Trump ran on two primary themes during his candidacy, and this came through in his address.

One, domestically & economically: Mr. Trump – a full fledged member and product of the establishment – ran as an anti-establishment candidate, and flat out told the American people that the U.S. political system is owned and operated by the establishment/plutocracy, and our government is generally run for the benefit of the establishment and plutocracy (aka the Davos elite).  And Mr. Trump would certainly know that.

Moreover, Mr. Trump planned to turn that around so that the economy, free trade agreements, and employment would be key features of his domestic agenda, and in the future, the economy and government would be run for middle America’s benefit (aka the 99%).

Two, foreign policy:  Mr. Trump acknowledged that credit card wars and nation building (aided & abetted by the Washington foreign policy establishment, which is embedded in both establishment political parties) had been a tremendous disservice to: Americans; the women & men who serve; U.S. prestige around the world; and amounted to gross fiscal mismanagement.  Along with that, there was the mixed message of remaining engaged in the Middle East and finishing the fight against radical Islam, and ISIS.  (That the U.S., and its so-called allies in the Middle East, spawned ISIS seems to be beside the point.)  And finally, on foreign policy, POTUS Trump wanted to break w/ the foreign policy establishment and not set up a new Cold War with the Russians.

And on these two core issues, JMH would argue that many Americans, perhaps a majority (given that Senator Sanders ran on many similar themes, and nearly beat Mrs. Clinton in the democratic primaries), support POTUS Trump.

What the majority of Americans did not, and do not support, is the Republican establishment’s social wars against American women, American minorities, and the LGBTQ community. 

Mr. Trump defeated the Republican establishment, it’s what he successfully ran on.  Not so surprisingly, it’s when the POTUS has adopted Mr. Pence’s (Mr. Establishment) social views, within the barrage of executive orders and POTUS proclamations, that Mr. Trump has found himself in a great deal of hot water, almost w/out fail.  It’s when Mr. Trump has adopted Mr. Bannon’s alt-right views that, again, he’s found himself dealing with marching in the streets (last seen on this scale in the ‘60s).

Mr. Bannon’s views apparently can be best summed up w/ the slogan: Make the White American Male Great Again. 

Nobody, or very few have said a word, when Mr. Trump took on the superpredators of Big Pharma, the contractors of the MIC, cajoled and jawboned U.S. multinationals into returning or maintaining jobs in the United States.  Very few – outside the globalist/multinational/corporate elite (and the academics, foreign policy establishment, and news organizations owned by same) – said a word when Mr. Trump tore up the TPP.

In short, there have been no protests in the streets over Mr. Trump's core – economic – agenda.  And outside the chattering class, little has been said about Mr. Trump’s foreign policies, excepting the Muslim travel ban, and Mr. Trump’s relations with Russia.

Here, it's worth noting that the Muslim travel ban was badly botched, and had Bannon’s finger prints all over it.  More importantly, it's worth noting that not a single terrorist attack has occurred on U.S. soil, originating from citizens from the countries on the Muslim ban list.  Per the Atlantic: "Nationals of the seven countries singled out by Trump have killed zero people in terrorist attacks on U.S. soil between 1975 and 2015.” (Ironically, the same cannot be said for the Sunni – Royal Monarchies – that the U.S. has commercial ties to and, conveniently, were left off the list.)  Word to the wise, Mr. President, discrimination based upon race, color, creed, religion, or sexual orientation is not only Un-American, but is probably considered backward by a majority of Americans.  There was a hundred different ways Mr. Trump could have executed upon that same executive order, calling for greater vetting of refugees, without even mentioning the word “Muslim.”

Now, as of this writing, the Muslim ban executive order has ended up in a federal court’s dust bin, precisely where it belongs.

In terms of Russia, POTUS Trump caught serious flack when he said, in response to the observation that President Putin was a killer:

“There are a lot of killers. We’ve got a lot of killers. What, you think our country is so innocent?” 

Anybody with a rudimentary high school education knows that America has a checkered history and suffers from a serious dichotomy between our ideals, and the manner in which our country is actually run and behaves, domestically and internationally.  From slavery, to manifest destiny, to overthrowing foreign governments throughout the 20^th & 21^st centuries to further multinational interests, Mr. Trump is right, and deserves credit for speaking the truth.  America has plenty of killers, and America has special forces in 70% of the globe’s countries.  These U.S. special forces aren't abroad on Boy Scout jamborees. 

Some American killers have well-trimmed fingernails and wear white-collar shirts, bespoke suits, and silk neckties.  We can generally, find this special breed of killer near the corner of Wall & Broad in Manhattan, or operating America’s private equity firms.

And the American press, here in particular, should know better.  It's on foreign policy in particular, where the MSM and the foreign policy establishment are most incensed about the Trump administration, and his abandonment – at least so far – of: a Pax-Americana foreign policy & the high priests of endless war.

The foreign policy establishment and the military industrial complex’s financial statements were very much counting on a new – credit card financed – Cold War (at the American people’s expense).  And the MSM is still upset over Mrs. Clinton's loss in the election, not through her own machinations or the DNC’s duplicity, but, allegedly, because Russia hacked the election and published DNC/Podesta correspondence.  Mr. Podesta’s correspondence, of course, has been discredited by no one.  In short, the truth found its the way to the surface, possibly with Russian involvement, and reflected poorly upon Mrs. C, the DNC, and her establishment base. 

Hence, the liberal McCarthyism that has been unleashed upon the Trump administration.  Meanwhile, hypocrisy is on full display.  Where is the liberal, and GOP’s, attack on Red China, and the totalitarian-communist thugs who run the slave labor kingdom?  Answer: Nowhere to be found.  U.S. multinationals make a killing off indentured Chinese labor, who often live and work in appalling conditions.

Mr. Putin is a killer, but anybody who has read Gulag Archipelago, by Aleksandr Solzhenitsyn, knows that Mr. Putin is no Joseph Stalin, or Adolph Hitler for that matter.  Mr. Trump’s and his staff’s conflicts of interest & machinations aside, along w/ Russia’s own modest empire expanding tendencies (spawned by the humiliation of the USSR’s collapse), this administration deserves credit for not landing the U.S. is a new Cold War (a new war this bankrupt nation can ill afford).

Yes, the news flow emanating from the White House is incredible, and so is the MSM’ response to it.  It’s pretty wild when the “liberal” media, such as Vanity Fair, takes the side of C-Suite/Multinational plutocrats over Mr. Trump. In the Vanity Fair piece, Mr. Trump was merely taking on the CEOs – who have grown wealthy beyond measure, via financial engineering and killing jobs and opportunity in America.

Role reversal? 

No.  Limousine liberals, Dems (see the Clinton Foundation), and establishment GOP have been on the side of the plutocrats for a long time, which allowed POTUS Trump to come to power.

How dare Mr. Trump attempt to fulfill his campaign pledge and keep multinationals from exporting U.S. jobs offshore.

POTUS Trump’s biggest shortcoming?  In his effort to appear decisive, he often takes liberties w/ the truth, which give the news media plenty of fodder to denigrate, or ignore, Mr. Trump’s more nobler efforts.  Mr. Trump should also stay away from Messrs. Bannon & Pence… their extremist social ideology is not a part of your mandate, Mr. President.  Their fascist beliefs & ideas may make for red meat to toss to some members of the GOP’s ever shrinking base, but they’ll do nothing to land your administration a second term. 

Best to go Rockefeller Republican on social issues, Mr. President.

MSM, pull up… don’t let a Niagara like flow of information emanating from the White House dictate the news flow or your reactions to same.  Hold Mr. Trump and his administration accountable to his mandate, and continue to speak truth to power.  And to the extent possible, MSM, ignore your corporate overlords' globalist – free trade – ambitions, and desire for endless warfare.  Yes, there’s a bogeyman around every corner, but none of them are a threat to the world’s last standing superpower.  If you can, MSM, stop spreading a fear based message. 

That’s the establishment GOP's, and Democratic Party's, job.

Copyright JM Hamilton Publishing 2017

A Threat to the Populist Economic Agenda?

A Threat to the Populist Economic Agenda?

The wealth of our middle class has been ripped from their homes and then redistributed all across the world.

-  POTUS Trump, Inaugural Address

By JM Hamilton (1-28-2017)

Like all executive branch office holders, the Trump presidency will certainly fall short in some areas, perhaps many, but keeping it interesting won’t be among them.

Among the avalanche of executive actions taken this week was scrapping TPP (or the Trans-Pacific Partnership), a free trade agreement, which was little more than multinational welfare.  The TPP, advocated strongly by POTUS Obama, would have further solidified the stranglehold of multinational sovereignty over the sovereignty of nation states (particularly, within the Pacific rim).  Instead, Mr. Trump appears to like bilateral trade agreements.  If he holds true to his campaign commitments, future trade agreements will favor working Americans as much, if not more, than the plutocracy.  The MSM is in such a lather over this, and other Trumpian developments, that the liberals have already forgotten that Senator Sanders, and former Secretary of State Clinton, also trashed the TPP free trade agreement, as dangerous to America’s and American’s interests. 

Mr. Trump, also by executive decree, stopped refugee immigration from several Muslim nations, many of them Shia or Shia led (Iraq, Iran and Syria, stand out on the list).  In doing so, Mr. Trump seemed to land on the side of U.S. commercial interests operating in the Middle East, such as Secretary of State nominee, Mr. Tillerson’s ExxonMobil. Omitted from the list, conveniently so, Mr. Trump left the door open to immigration from some the nastiest terror sponsoring states on the planet:  Saudi Arabia of 9-11 fame; the United Arab Emirates; and Qatar.  Hence, directly or indirectly, Mr. Trump seems to be signaling or weighing in on: the Sunni/Shia civil war being waged throughout the Middle East; and he very well maybe perpetuating the Washington foreign policy establishment’s errors of many decades, by not holding the oil rich monarchy states accountable for their terrorist actions. 

Or perhaps the MIC weighed in over at the White House, and didn’t want something like terror states, and terror sponsors, getting in the way of future arms sales?

Ironically, the aforementioned Sunni/Oil monarchy states are neck deep in ISIS funding & support… the very terror group, Mr. Trump vowed to “wipe off the face of the earth.”  If this executive action is an early Trump indicator of his Middle East foreign policy, it would seem to suggest more of the same.  That is, kowtowing to oil rich – Sunni – monarchies, and Israel’s agenda.  Left unsaid in the proceeding is the fact that excluding any person from entering the country, based upon their religion, would appear to be Un-American.

That’s really not the point of today’s piece however.  Today, we are going to write of Mr. Trump’s populist economic agenda and a possible direct threat to that agenda.  Mr. Trump has indicated that he would like to see a manufacturing renaissance w/in the United States, and he’d also like to rebuild America’s infrastructure.  And in doing so, place Americans back to work and crank up the American economy, perhaps by as much as a 4% growth rate.

Staring down Mr. Trump’s worthy agenda are the impediments of a strong dollar and possible future inflation.  Since winning the presidency, the dollar has grown progressively stronger, versus other currencies, in anticipation of the Trump administration deploying the Keynesian model of deficit spending (to spur the economy and the revival of the American middle class).  That is to say, infrastructure spending should increase the national debt, and barring the Federal Reserve engaging in additional balance sheet expansion/debt monetization, said increase in the national debt should lead to rising interest rates and debt service loads.

As a consequence, demand for the dollar is strong, so as to purchase dollar denominated investments in the stock market, and ultimately, w/in the bond market.  A stronger dollar, and slightly higher interests rates (spurred by expectations of incipient inflation) would be less of an issue if the U.S. debt to GDP ratio was significantly lower.  Given that the federal debt ratio has breached the century mark, it’s a problem for Mr. Trump’s agenda.

A strong dollar harms an American manufacturing renaissance by making more costly U.S. manufactured exports.  A strong dollar and higher interests rates, also crimps increased deficit, or infrastructure, spending by the Federal government, again, due to higher national debt and higher debt service loads.

In short, a strong dollar and higher interest rates could crush Mr. Trump’s domestic agenda. 

But what of inflation, which despite record and preternatural Federal Reserve actions – since the financial crisis, has shown up nowhere.  Ms. Yellen, a dove during the Obama presidency, is suddenly sounding hawkish alarms, now that Mr. Trump has entered the White House.  Ms. Yellen, and others at the Fed, have suggested incremental increases in interest rates are warranted and likely on the way in 2017, as a means to hold inflation in check and in order to cool an economy that is, allegedly, growing hotter.

Economic textbooks will tell you that inflation is either driven by demand-pull or cost-push scenarios.  Demand-pull inflation occurs when workers have too much money in their hands, and demand outstrips supply.  Hence driving up prices, and expectations of future price increases, for products and services.  But wages have stagnated in the United States, and Mr. Trump and his team aren’t even fans of a minimum wage, so where art thou demand-pull inflation?  In fact, one unemployment indicator or measurement, U6, actually suggests unemployment is much higher, closer to 9 to 10%.  Moreover, globalization has crushed labor’s wages and negotiation powers for higher benefits & wages.  So again, another strike against demand-pull inflation happening anytime soon.

As for cost-push inflation, this is where raw materials cannot keep up with demand from manufacturers, and finished product prices rise, due to an increase in the prices of the raw materials entering into the finished products.  Therefore, prices for finished goods rise on the supply side of the curve – along w/ future expectations, because of the higher cost of raw materials going into the finished products (under a cost-push inflation scenario).  Cost-push clearly isn’t a driver of inflation presently – either.  We know this to be true by the unprecedented fall in oil prices, the slowing of China’s economy, and the surfeit supply of steel, aluminum, and other raw materials.  In fact, the post-financial crash global economy has been characterized by too much excess capacity for the production of raw materials, and too much excess capacity for the production of finished goods (and inadequate aggregate demand). 

So if demand-pull and cost-push inflation is not a concern, what else could increase the price of products & services and drive nascent inflation?

Hmmm… what entity has the power, particularly for products and raw materials with relatively inelastic demand curves, to set prices?  That would be cartels, monopolies, and oligopolies. 

That’s right – in a world w/out cost-push or demand-pull inflation – the biggest threat to Mr. Trump’s domestic agenda comes from job-killing, economy killing, cartels and monopolies.  These government-sanctioned entities have no, or limited, competition, and, as long as demand is strong or strong enough, there are no restrictions on the prices they can charge.  With the ability to set price, and restrict supply, only cartels and monopolies have the power to create inflation out of thin air.

Doubt me?  Witness Big Pharma’s catastrophic price increases, from some of the biggest super-villains on the planet, like: Valeant, Martin Shkreli, and Mylan Pharmaceutical.

What we have seen in the last several decades, since the rise of Mr. Milken’s leveraged buyouts based upon junk debt… is a spectacular rise in M&A (i.e. mergers and acquisitions).  Wall Street banks, shadow banking, and particularly private equity have made exceptional fees and returns off M&A activity.

M&A has taken off to such an extent that the American economy, in nearly every sector, is now dominated by cartels and monopolies.  And as dictated by institutional investors, Wall Street banks, hedge/private equity funds, and in many instances, leveraged balance sheets – the pressure for cartels and monopolies to increase prices, while cutting costs/labor, is ever growing.

In short, increased pricing due to monopolies and M&A very well may give the Federal Reserve the excuse it needs to jack up interest rates… not because the economy is overheating, and certainly not due to demand-pull or cost-push inflation. Think about it!  Price increases, as a result of cartel/monopolistic pricing, also gives the Fed an opportunity to take a proactive stance against any number of bubbles the Fed/central banks have created over the last eight years (due to exceptional & extraordinary Fed monetary policy).

So what can the Trump administration do to hold – economy & job killing - cartels and monopolies in check?

·      For starters, Mr. Trump could declare a moratorium on all pending and future M&A activity, so as to prevent an even greater concentration of pricing power into too few hands (and to mitigate the Fed’s excuse to increase interest rates).

·      Mr. Trump – utilizing the Justice Department and the FTC – could also go after existing cartels and monopolies within the American economy, and seek to break up same.  Since the purpose of M&A is often to cut expense/labor, the reverse should be true if cartels and monopolies are broken up (that is to say, break up should create jobs & opportunity, as well as, additional opportunities for investors).

·      As Mr. Trump is fond of using taxes and tariffs as a means to incent corporations and businesses to keep jobs in the U.S., he could also use the tax code as a means to dis-incent M&A (by wiping out the loophole, or tax write off, for interest on debt).

·      The Trump administration could also attack our national debt itself, by instructing the Fed to contact its peers to study a global multilateral public debt write down.  If successful, a lower debt to GDP ratio would allow Mr. Trump to spend Federal money w/ far greater ease, a la Reagan.

·      And least desirable, the Trump administration could look to the Fed to engage in more debt monetization to finance yet another deficit spending round.  In essence, kicking the can further down the road.

At the end of the day, Mr. Trump’s mandate is thin enough… apparently, about as thin as his skin.  What a shame it would be if his economic agenda was strangled in the crib by an, allegedly, apolitical Federal Reserve, who now appears more interested in covering its hind quarters from the various bubbles it has created over the last decade.  

Mr. Trump does not strike one as a fall guy for the Federal Reserve's worst excesses, but if he's not careful, he could very well find himself - and his presidency - in that position.

Copyright JM Hamilton Publishing 2017