Login
  • 2

Unstable and Unpredictable

The President is introducing unpredictability into a relatively predictable system. That will lead to instability.

One of the things you tend to hear in law school and in business school is that predictability tends to bring stability. The outcome of the law tends to be predictable, though problematically less so. The outcome of economic policy tends to be predictable. If a Republican is President and the Supreme Court leans right, the variables tend to go a certain way. If the President is a Democrat and the Supreme Court leans left, the variables tend to go a different way.

You may dislike the direction and trends, but they are predictable. Consequently, businesses can plan ahead. They can find safe havens. They can move assets. They can use the predictability for their own stability. Other nations too can plan and predict.

The global economic systems in particular dislike the lack of predictability. That is why this statement from Secretary of Commerce Wilbur Ross is so troubling for big businesses, institutional investors, and global trade representatives. From Meet the Press:

You may applaud the President being able to throw everyone off his game, but the markets do not tend to reward arbitrary and capricious behavior, which is what this looks like. You might say it is great the President is doing this. But by doing either the tariffs or just leaving it to a guessing game, the President is introducing unpredictability and is so introducing instability into the systems that keep the global economy on course.

I think the only person on earth who thinks tariffs are a good idea is Wilbur Ross. Who happens to have Trump’s ear on trade.
Then again, every single republicans senator voted for his confirmation. Even though they knew he supported a tariffs and scraping free trade deals.
So in the end any fallout from this will come from not pushing Trump to confirm people who are competent in the area they are going to run.
But maybe trump just wants to be able to stand on the debate platform in 2020 and brag about how he saved the US steel industry. Ignoring all the smaller industries and companies he bankrupted doing so.

Bear in mind Trump is mostly angry talk but no action ... chances are he will have focused his attention on something totally different tomorrow (Alec Baldwin, probably).

I believe Trump sees companies bankrupting like he saw his companies going bankrupt. In every instance he came away richer and those who went in with him were left holding the bag. Trump is all about grand gestures. I'm imposing tariffs on steel and aluminum, if others lose out so what, steel and aluminum will make it big. The little people will never be noticed. This however is not how politics work and the little people in this case will vote and they'll vote their pocket book.

"Unstable" and "Trump" go together like hand and glove.

Good post Erick.

A primary principle of military campaigns is fluidity – i.e., the ability to change ones plans as circumstances change. It is fortunate that God was not reluctant to introduce a New Covenant when it became clear that the Old Covenant was not working: Jeremiah 31:31-32: “Behold, the days are coming, declares the Lord, when I will make a new covenant with the house of Israel and the house of Judah, not like the covenant that I made with their fathers on the day when I took them by the hand to bring them out of the land of Egypt, my covenant that they broke, though I was their husband, declares the Lord.” In 1967, the US produced 23.1% of the world’s steel (https://en.wikipedia.org/wiki/List_of_countries_by_steel_production). In 2017, China produced 49% of the world’s steel while the US produced 4.8%. Regardless of how one feels about Trump’s mental stability, there is no argument to be made that American manufacturing has not been decimated since the 1970’s, while China’s manufacturing has exploded and its steel production increased 60x. Trump’s stated goal has always been to restore greatness to America by returning it to the manufacturing powerhouse that it once was. That goal has never changed. Never Trumper’s may hate the tariff’s that Trump has proposed to achieve that goal. They may also mock the fact that Trump is willing to consider renegotiating treaties to achieve that goal. One definition of insanity is said to be a constant repetition of the same pattern of behavior with the expectation of different results. At least Trump is sane enough to recognize that better is a subset of different.

The reason Trump changes his mind so often is that he has no idea what he is doing and why he is doing it. He won't listen to his advisers even though they know way more than he does. It's all about what Trump wants, Trump gets.

Stories