White House Economic Council Chairman Larry Kudlow Discusses China, Trade and Meeting With Apple CEO Tim Cook…

An interesting discussion this morning on CNBC with White House economic adviser  Larry Kudlow beings to highlight the principal purpose of his forte’.

President Trump is the first U.S. president who came to the table of economic policy with a plan of action that is uniquely his own.  POTUS doesn’t need “advisers” to frame possible policy, he already has the program mapped out; POTUS needs ‘advisers” who are not actually “advisers” per se’ but rather a sales-force to explain and advance his program agenda to the world markets as the policies are implemented….

.

…Because this is such a substantial shift from historic reference, President Trump’s unique position of actually creating the economic policy must be emphasized and continually repeated.  It’s not Kudlow creating the policy; these are President Trump’s policies.  The granular details are carried out by U.S.T.R Lighthizer, Commerce Secretary Ross, Treasury Secretary Mnuchin.

Trade explainer Peter Navarro and Economic explainer Larry Kudlow are people specifically enlisted by President Trump to explain Main Street action (policy) and Main Street consequence (outcomes) to Wall Street markets.

It’s easier to understand the importance of Navarro and Kudlow when you remind yourself MAGAnomic policy is operating in a space between two historic economic engines.  As Trump de-emphasizes multinational interests, and re-emphasizes domestic Main Street interests, a generation of financial and economic media have no frame of reference.

MAGAnomics operates in the space between two entirely divergent economic engines.

Go through the archives and you’ll note a strategy unfolding that few, including us, could fully conceptualize when it first appeared.  Way back when candidate Trump first began to put his economic plans into platform outlines the subtle signature was there, but few were paying attention.

In order to reverse three decades of middle-class economic erosion, there were indicators that Trump’s strategy was a radical change in approach.  In essence the strategy was to split the economic policy into two areas and sequence the policy: highly-consumable goods (first) and durable goods (second).

Both product sectors have historically been viewed and approached by economic policy makers using a single financial strategy.  That singular approach gave rise to Wall Street benefiting and Main Street suffering.  Investment-class gained; middle-class suffered.

Trump outlined an approach –albeit vaguely– that was multidimensional.

His policy would first target multinational corporations, using the U.S. Treasury (Mnuchin) to weaken their grip and influence; simultaneously, he would use energy policy to drive down domestic prices in highly-consumable products (fuel, food, energy sector).  These sectors are not measured in fed inflation indexes; however, if lowered, these facets of consumer spending can also increase the amount of disposable income available for workers.

In essence, expand the economy by lowering the aggregate cost of living for the middle-class who live paycheck-to-paycheck.  Use monetary policy, fiscal policy and trade policy to entice domestic investment and create jobs; and ultimately put upward pressure on wages.

When the tax cut and reform package passed in December 2017, phase-one cemented and a new phase immediately began.  Phase II, 2018.

The second aspect, or second phase of Trump economic policy, is geared toward ‘durable goods’.  That’s where the trade imbalance plays a larger role in the strategy.

As the economy expands, Americans can now afford rises in the prices of durable goods.  However, as with all manufacturing systems -geared toward retaining market share inside a consumer economy (ie. the U.S. market)- the foreign creators will first seek to retain competitive pricing structure by making efficiencies within their own business models.

When foreign manufacturers entering a phase of cost-cutting analysis (note what happened when Trump left Asia after visit) you immediately hit them with stronger forecasted trade rules on their products.

The financial analysis and five-year-plans, being conducted by the manufacturers, then has to contain the possibility of new rules.  That’s where Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer come in:

(Story Link)

On Oct. 5, 2017 the ITC [International Trade Commission] voted unanimously in favor of Whirlpool, which brought a complaint forward accusing Samsung and LG Electronics, its South Korean competitors, of flooding U.S. markets with cheap washing machines and pricing out domestic manufacturers. While the ITC didn’t say material harm was coming from South Korea in particular, Whirlpool alleged the country’s manufacturers shifted production into other countries (Thailand and Vietnam) in order to avoid U.S. anti-dumping tariffs imposed in previous years.

The ITC’s recommendations will be sent to President Donald Trump, who will have two months to make a final decision.

This second phase is where the two economic engines: Wall Street and Main Street; begin to come into parity again.   The FED (monetary policy) does measure the cost of durable goods in their inflation index.  Rises in durable goods are recorded in inflation indexes and monetary policy (interest rates) is influenced accordingly.

Trump’s phase-one befuddled the FED who were perplexed over inflation being virtually non existent.  Most of the reason for this disconnect has been the downward price pressure on (non-measured) highly-consumable goods; and static prices on (measured) durable goods.  The FED could see the economy expanding, but they cannot, or at least couldn’t until now, reconcile the lack of inflation.

Wages are growing, albeit modestly at first – but now gaining speed, as a result of economic expansion and increased employment.  This wage growth, in combination with keeping downward pressure on high-consumable prices, allows Trump to begin a series of aggressive trade policies that will slowly raise durable good prices.

The trade policy, tightly executed by Trump, Mnuchin, Ross and Lighthizer, will put increased pressure on manufacturers to make products in the U.S.  In turn this puts further demand on U.S. workers; which, in turn, drives up the wages – to afford the prices of durable goods as they increase.  This action/consequence is not accidental, it is planned.

Simultaneously, it must be remembered that every dollar removed from imports actually increases the GDP.  The value of all imported goods is deducted from the combined value of all goods and services we produce.   If we drop $1 billion in imports on Washing Machines, and simultaneously manufacture $1 billion on Washing Machines in the U.S., the U.S. GDP gains $2 billion in value.  The U.S. economy actually expands by more than $2 billion because the attached manufacturing wages are also inside the U.S.

This multi-prong approach is one of the reasons why it still doesn’t seem to be part of the strategy to keep the U.S. inside NAFTA as it currently is constructed.  Perhaps, just perhaps, the NAFTA exercise is more optical than actual.  Perhaps, it’s more about the outside world seeing the U.S. trade position as executed, than actually negotiating.  Regardless of motive we shall soon find out.

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This entry was posted in Big Government, Big Stupid Government, Donald Trump, Economy, media bias, NAFTA, President Trump, Taxes, Trade Deal, Uncategorized, Union Activity - ALL, US dept of agriculture, US Treasury, USA. Bookmark the permalink.

116 Responses to White House Economic Council Chairman Larry Kudlow Discusses China, Trade and Meeting With Apple CEO Tim Cook…

  1. DanO64 says:

    Tomorrow, perhaps?

    Liked by 2 people

    • fleporeblog says:

      You can bet your bottom dollar that every country other than Australia (we have a surplus with them) that got an exemption until May 1st on steel and aluminum tariffs will see that window completely close! It will send a message to China (not exempt), Mexico, Canada and the EU that Our President isn’t playing around. You had your chance NOW you will pay!

      Liked by 8 people

      • litlbit2 says:

        Just a comment as a look around this town. You can not miss the amount of stock piling of foreign goods that are being place on parking lots. I am talking large items, construction equipment, farm/lawn, autos/trucks etc trying to beat the cut off.

        Liked by 7 people

        • fleporeblog says:

          Thanks for the anecdotal! Puts even more credence to my post above. They know what is coming.

          Liked by 3 people

        • This is a beautiful thing.

          These stockpilers of Exports-to-America are playing into President Trump’s hands:
          • All now have a glut of inventory: Suppresses prices in America.
          • The inventory glut will cover demand while NEW American factories are built/expanded.
          • Exporters to America will encounter a BIG drop in shipments.
          • Exporters to America will either build American factories or lose their American market.
          • That drop in American imports raises GDP, and new factories raise GDP MORE.

          Liked by 7 people

          • litlbit2 says:

            Amen. Believe the leaders of these countries that have lapped up to greed the last several years now hold a fist full of IOU’s and a slave population that was not allowed to raise their living standard except for a few. Now no buyers, unrest with a aging workforce. One child per family will take years if ever to overcome. MAGA

            Liked by 1 person

  2. MattyIce says:

    Thank you President Trump, the good ol’ USA needed this booster shot!!!

    Liked by 11 people

    • fleporeblog says:

      Your right! Larry Kudlow has impressed the heck out of me. He slapped that little blonde around. She was trying to say that the Tax Bill was a big waste of time given some data from March.

      I wrote this earlier:

      The Atlanta Federal Reserve put out their final prediction for the 1st Quarter real GDP that will be made available to the public tomorrow morning at 8:30 am.

      You can find the release at the link below:

      https://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

      Keep in mind it will be revised for a 2nd time on Wednesday, May 30th and for a final time on Thursday, June 28th.

      The Atlanta Federal Reserve is predicting 2.0% real GDP for the 1st Quarter.

      https://www.frbatlanta.org/cqer/research/gdpnow

      However, the NY Federal Reserve made their final prediction on April 20th and are predicting 2.9% real GDP for the 1st Quarter.

      https://www.newyorkfed.org/research/policy/nowcast.html

      There was some really good data released today about our trade deficit in the month of March.

      THE BIMBO DIDN’T WANT TO TOUCH THIS ONE!

      From the article linked above:

      Trade gap sinks to $68 billion in March, down 10.3% from $75.9 billion in prior month.

      This was the first narrowing of the deficit in seven months and came in well below the $73.4 billion estimate of economists polled by MarketWatch.

      Trade had been expected to be a drag on first-quarter growth because of the jump in imports in January and February, but the sharp narrowing of the deficit in March means that it will at least be much less of a negative.

      VERY IMPORTANT

      “If we’re right, GDP forecasts for the first quarter will be revised up by about half a percentage point.”

      From the article linked above:

      Analysts project growth of 2% after fourth quarter’s 2.9%

      Rebound expected in coming months as tax cuts take hold

      I would not be surprised if the initial release tomorrow comes in at 2.2% real GDP.

      However, given the fact that we cut the deficit in our trade imbalance in March by 10.3%, we will see a final real GDP of 2.7% for the 1st Quarter. Once again that final release will occur on Thursday, June 28th.

      Last year the 1st Quarter (2017) real GDP finalized at 1.2%. The initial release had real GDP for the 1st Quarter at 0.8%. BHO was still in office for 20 days in January of the 1st Quarter. Our President was only able to begin MAGANomics by starting to cut regulations and beginning to expand the Energy Sector.

      Liked by 8 people

      • fleporeblog says:

        The Blonde Bimbo didn’t want her viewers to know about the following below! To Larry’s credit, he referenced it on the show.

        From the article linked above:

        The U.S. Census Bureau said new durable goods orders in the U.S. nearly doubled the 1.7% median economic forecast for the month of March. The revised data from February also showed a stronger than previously-reported month.

        New orders for manufactured durable goods in March increased $6.4 billion or 2.6% to $254.9 billion, the U.S. Census Bureau announced today. This increase, up 4 of the last 5 months, followed a 3.5% February increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders increased 2.8%. Transportation equipment, also up four of the last five months, drove the increase, $6.4 billion or 7.6% to $91.4 billion.

        New orders for durable goods in February were revised up from $498.0 billion to $499.3 billion.

        Also the following GREAT news!

        From the article linked above:

        The Labor Department said first-time jobless claims fell to the lowest level for initial claims since December 6, 1969 for the week ending April 21. There were a seasonally adjusted 209,000 initial applications for state unemployment benefits, a decrease of 24,000 from the previous week’s revised level and the lowest since they were 202,000.

        Liked by 9 people

      • Ad rem says:

        Flep…it’s the multiple links that are slowing you down. Usually more than 3 causes WP conniptions.

        Liked by 4 people

      • I thought it would have been at least 3%. Are they rigging it? Our economy is booming and jobs are popping up! People on food stamps are down! I hope the next quarter will be higher!

        Liked by 1 person

        • fleporeblog says:

          1st Quarter historically is the lowest of the 4 Quarters.

          Keep in mind that the Tax Bill wasn’t passed until the end of 2017. Even Bloomberg had to say that they expect a much bigger number come the 2nd and 3rd Quarters.

          Last year the 1st Quarter initially came out at 0.8% and was revised to 1.2%. Quarters 2, 3 and 4 were averaged just above 3% combined. The annual rate finished at 2.3%.

          I am hoping to double last year when the final revision comes out at the end of June (2.4%). I am predicting a little better with 2.7% because of the trade deficit shrinking by over 10% in March.

          That will put 3% for the annual absolutely in play because the 2nd and 3rd Quarters may very easily reach 4%.

          Liked by 4 people

          • It must! If this economy is steady at this rate! Thanks for your great insight in this!

            Liked by 1 person

            • fleporeblog says:

              Anytime! I actually appreciate the inquiries because it allows me to learn by trying to share the information in a user friendly way.

              Liked by 1 person

              • maiingankwe says:

                Fleporeblog,
                You always put it in a way for some of us slower folks to understand. You write and add the tweets together flawlessly. I’m real serious about this. I’m not the sharpest tool when it comes financial stuff, stock markets, GDP numbers and how they are acquired among so many other parts of our economic structure and how they figure it all out.

                You put me on the playing field. Okay, I’m in the outfield, but I’m on the dang field due to you, your patience, and the way you explain and lay it all out for us with the tweets and your commentary along with sections of the articles. You have a heck of a talent and your talent has made me smarter for it.

                So what if I have to read parts a few times over, it helps me figure out what I need to understand. I also do this with what Sundance writes as well. Sometimes it takes me more than once to finally get it. And you know what? I am so perfectly fine with it, because it puts me on the dang field and I couldn’t be happier.

                My Mom and you would’ve gotten along so well, and she would’ve been so greatfull for someone to finally get it through my slow brain. She’d been trying for years to get me where you have.

                I actually think she would’ve printed your stuff and handed it to me and said, there, read this and then tell me if you get it.

                Please know I say this with good humor and a happy heart. You’ve done good, real good. I will be forever grateful for your expertise and knowledge, and knowing that you’ve been learning so much along the way as well, well, I just can’t put it into words without it coming out wrong. Let’s just say it makes me happy for the both of us. I know you’ve been good at this for awhile, it’s your schtick so to speak, but I know you’ve been learning things too.
                Be well and hope you have an amazing day tomorrow,
                Ma’iingankwe
                And God Bless.

                Liked by 1 person

          • Perot Conservative says:

            Are you asserting Trump does have a Magic Wand?

            Liked by 1 person

        • fleporeblog says:

          https://bea.gov/national/xls/gdpchg.xlsx

          This excel spreadsheet shows you all the way back to 1930 the GDP rates for each quarter.

          Liked by 2 people

  3. Paco Loco says:

    A barrel of WTI crude was up to $68 usd. Brent is $73.89. The significant jump in prices ( last year oil was $50/barrel) is going to create an inflation ripple through the economy. Not good for the economy and not good for consumers. With all of the shale oil out there, and production increasing, why are prices raising?

    Liked by 1 person

    • Are we still dealing with refinery bottlenecks?

      Liked by 4 people

      • PaulM says:

        I think were dealing with increased exports reducing domestic supply that drives our price up. Business as usual.

        Liked by 5 people

      • Sylvia Avery says:

        Yes, I believe we are. I don’t know, but I assume that the refineries that were off line because of the hurricanes are all back at capacity? And I know I read some time ago that three new refineries are under construction in Texas…but I doubt they’d be completed yet.

        There is a lot of “not in my back yard” protest ginned up around refineries so I know getting enough capacity is a struggle, but if anyone can fight the forces trying to hold that back, it is PDJT and his team of Wolverines.

        Liked by 5 people

      • fleporeblog says:

        BINGO!

        Help is on the way folks!

        Liked by 6 people

    • graphiclucidity says:

      For the fifth straight month, OPEC in March set a fresh record for complying with its agreed oil-production cuts, with the goal of re-balancing the market finally in sight. A parallel effort from 10 non-OPEC nations also improved even as the group’s biggest producer, Russia, boosted crude output slightly.

      Article, with helpful graphics:
      https://www.bloomberg.com/graphics/2017-opec-production-targets/

      Liked by 1 person

    • tdaly14 says:

      OPEC

      Liked by 1 person

    • spren says:

      That’s not entirely accurate. Fracking needs a price of over $50/barrel to be cost effective at current production efficiency costs. Venezuela’s oil production has collapsed due to their socialistic practices despite having some of the largest oil reserves. Iran’s production is under strain due to the political climate. All of these things, along with a growing global economy is significantly increasing demand for oil. Those pressures drive increases in price. But once the price reaches the levels where it is now at, many fracking operations which had curtailed production will now have incentives to ramp up their production activities which will tend to mitigate the increase in prices.

      Also consider that as we are nearing the summer season, with heightened travel (etc), the EPA RFG requirements kick in which strains the refineries production as many differing blends of gasoline are required due to the various state requirements. If we could obtain a consensus among the states of what those reformulated blends should be we could significantly provide a consistent supply of the gasoline. This would provide a consistent supply and greatly lower the increased costs associated with refineries having to provide so many different blends.

      Liked by 4 people

      • GB Bari says:

        yes. I addition, I have read elsewhere that minimal sustainable $/bbl costs for fracking have been slowly declining as fracking technologies & methods improve. So there is that dynamic which has not yet been accurately defined (cost-wise) and priced into futures.

        Like

      • West Texas exploration & production are booming:
        Fracking is now profitable at $35-$40 a barrel.
        Smaller guys with low overhead can work at less.

        $450 a night for a room at Homewood Suites.
        1BR Apartments that rented for $1600 last year are going for $2500 monthly!

        They are busing workers in for menial jobs at Starbucks and McDonald’s!

        Liked by 1 person

  4. Deplorable_Infidel says:

    “MAGAnomics operates in the space between two entirely divergent economic engines.”

    This is why many smart people (outside of those with an “agenda”) just do not “get it”, because it has not been taught in any school. Once it can be explained -as CTH does most excellently with this site- than it just makes a whole lot of sense.

    Those links embedded above in this post are indispensable to understand the big picture of MAGAnomics. A MUST READ for new Treepers, those of us that have hung around on and off for awhile, or just a quick refresher for those that have been here consistently for while.

    Send the link of this post to the economic doubters that all of you know out there.

    Liked by 10 people

    • Sylvia Avery says:

      Or for those of us who struggle to understand and need to keep rereading it! I learn something new every time, and I retain more every time.

      It is so helpful to understand what is going on economically and to see it happening and to understand why things are going the way they are.

      Liked by 7 people

    • GB Bari says:

      “This is why many smart people (outside of those with an “agenda”) just do not “get it”, because it has not been taught in any school.”

      I NEVER understood how the American middle class was ever going to prosper under the globalists, with middle class jobs disappearing until middle America was essentially an economic ghost town. I ALWAYS thought that you cannot replace manufacturing hard goods with service jobs or shuffling dollars around on paper.

      I came of age in the early 60’s, when U.S. manufacturing was still going full tilt. I grew up very middle class – maybe even slightly lower middle class (we lived in a 1955 brick row house community just outside of Baltimore City). Just about all of my friends had fathers who worked in some capacity in manufacturing industries in and around Baltimore and the surrounding counties.

      I watched that lifestyle evaporate over the past 40 years, but then far more quickly after NAFTA was passed. I saw young people who once had a choice to go into manufacturing jobs or professional jobs suddenly have their choices greatly narrowed, with starting salaries getting effectively smaller by the year (little growth in salaries but food, housing, energy, healthcare, and tuition costs were all going up). The professionals were mostly doing well, but the people who didn’t have degrees – and even many who did – could not find long term sustainable careers. Government jobs became the defacto “Plan B” – and a lot of young folks went that route.

      I never ever thought the new “free trade” paradigm was worth a hill of beans. And neither did most people my age who watched this unfold over the decades. We made our immediate children aware of the problematic trend by talking to them about the changing economy, the changing job outlooks, and they were rightfully concerned.

      I cannot speak to what’s being taught about economics in schools these days – I don’t seem to agree with generally most of public school curriculums – but what’s been happening has been a long term concern for me with a very unclear future – until President D.J. Trump came along.

      Liked by 1 person

    • Esperanza says:

      There was a brilliant cartoon in a magazine years back which explained it brilliantly. There were two ocean liners, one us, sinking, the other the Wall Street casino economy decked ou with financiers smoking massive cigars and drinking champagne as the sailed away watching us sink.

      Like

  5. I so love the respect Mr. Kudlow commands.
    And how he cuts through with clarity on the issues.

    Liked by 5 people

  6. Wink says:

    Mercy, that cat picture is priceless. hahahahaha!

    Liked by 3 people

  7. sundance says:

    Liked by 14 people

    • DanO64 says:

      I remember just a year ago or so everybody was screaming because they couldn’t get a job after college. Well, get to work.

      Liked by 7 people

      • Paco Loco says:

        Problem is wages and income are still stagnant. Lots more people working is good but low unemployment hasn’t caused wages to raise to keep up with inflation.

        Like

        • litlbit2 says:

          As the union bosses with the DNC bide their time to start the rethoric, “big corporations against the workers” raising union dues(dnc donations) to take back government control.

          I hope this time the working folks are smarter as we all remember the unions kept collecting and donating as the livelihood of the middle class became Detroit and coal country poverty.

          Liked by 3 people

        • There are 10s of millions of people “no longer looking”, beyond those “unemployed”.

          Wages won’t begin to rise significantly until we drop below 4% unemployment AND growth in job openings outpaces the rate that those in the above categories take jobs.

          Like

        • GB Bari says:

          Paco – it’s too early in the plan. Lots of anticipated positive outcomes have not yet had time to materialize. Heck, the Plan hasn’t even been fully implemented. This is a YUGE sea change in attitude and strategy which cannot have its full impact in just a few months. Remember the tax law changes were just passed last December.

          Trump cannot make up for the past 30 years of wage stagnation overnight. It will take several years of sticking with this new economic model to recover from that sorry trend of the past.

          Also the disparity between inflation and wages has been happening for a long time since the people making the official inflation measurements detached food and other essential consumer costs from the list of goods being measured. I am hoping that is changed back to reality by PDJT in the near future, but no one in the Administration has yet talked about it

          Liked by 1 person

  8. MakeAmericaGreat says:

    Well explained, Sundance. Thanks.

    Can’t have a better economic salesman than Kudlow. He was a great hire. Loved his interview in the included video.

    Kudlow is a charmer. Entertaining and fun. Just like Trump himself.

    Liked by 8 people

  9. MVW says:

    The Federal Reserve is supposed to manage the money through interest rates, and in their theory of economics, that is supposed to enable them to manage unemployment and prevent recessions… and when recessions do occur, provide a way to get out of a recession.

    The Federal Reserve failed to prevent the recession that nearly bankrupted us. Interest rates even when dropped to near zero failed to provide growth. Instead the US economy has been grinding to a halt.

    Enter Trumpanomics. Reduce regulations… massively. Drop taxes… massively. Unleash our home energy production. Give our home businesses a level competitive field. Suddenly, what the Federal Reserve failed to deliver is being delivered. And what does the Federal Reserve do???? They raise interest rates.

    We don’t need the stinking Federal Reserve, where we pay $ hundreds of billions on money borrowed from an institution that PRINTS the money… PRINTS THE MONEY. Got that? We borrow PRINTED MONEY.

    So, why? WHY?

    Liked by 12 people

    • Sylvia Avery says:

      This I do not know. The Federal Reserve is a gigantic mystery to me.

      Liked by 3 people

    • ladypenquin says:

      The Fed dropping interest rates was one of the worst things they could have done to get us out of the recession. Printing money created a false picture of the real Obama economy. If they hadn’t printed the money, and stopped spending borrowed money we would have been able to bottom out much sooner.

      Franklin D. Roosevelt’s policies prolonged the Great Depression. And while everyone call Obama’s era a recession, to many of us it felt like an economic depression, not a simple recession. Obamacare remains the great weight on the spending ability of the average American.

      Liked by 9 people

    • spren says:

      Exactly. The Constitution does not give the government the power to “regulate” the economy. The original power to coin the currency was granted to the Congress. They were supposed to regulate the money supply to match the value of goods and services existing in the economy. That was how they were to assist in avoiding or controlling price inflation. But then in 1913 we established the Fed (delegating the Constitutional authority from Congress to the Executive branch) who then usurped the power and responsibilities granted to them to include managing and directing the economy. Instead of just merely managing the money supply to equal the value of goods and services, they started being overlords of managing the economy. That has not generated good outcomes for our economy.

      Who are they to establish desired outcomes for a 2% inflation level? Who are they to determine that inflation is better than deflation? All of these things are certainly relative, but to those of us on a fixed income, deflation increases our purchasing power. These “king makers” think that inflation provides incentives for people to purchase things today instead of tomorrow because prices will increase, and that deflation provides incentives for people to forestall purchases as prices will be lower tomorrow. Why not just do your freaking job to regulate currency and let the markets take care of themselves?

      Liked by 5 people

  10. Perot Conservative says:

    Impressive, Sundance, from skullduggery to economics. I once studied the ‘dismal science’. I hadn’t fully realized the two-fer in bringing back manufacturing.

    An important missing piece here are regulations. I recall during the election, he once said something like, “I always knew regulations were important, as I speak with more business owners across our country, regulations may be as important as lowering taxes. Maybe even more important.”

    Trump was able to eviscerate regulations with Executive Orders below the radar. Concurrently, he approved 4-5 pipeline projects, giving him very visible wins. That, combined with his talk of an infrastructure program pushed up commodity prices like metal and copper.

    These moves helped continue the Big M, Momentum. They built confidence.

    At the same time, tough talk and increased border enforcement drove down illegal immigration, thereby increasing the need for forgotten Deplorables. Wages rise (modestly).

    It’s been too long since I opened a macroeconomics book, but we know Keynesian Economics failed under Obama. Would the current approach simply be called Free Market Economics? I’m rusty.

    One negative, one suggestion.

    The infrastructure plan seemed half baked, combined with Democrat obstruction it was DOA. Used to an 80 / 20 split, the opposite proposal was rejected. … I’ve read we’ve got 1,000 bridges to replace or retrofit. OK, complete 500 or 700 of the smaller projects, fast tracked. Find a way. Please dump the non-critical vanity projects!

    Suggestion. 60 Minutes had this good-old boy who helped rebuild a dying southern town. They primed construction projects (my term). They pre-approved sites, brought out water, electricity, and even built their own modern local steel mill! They then partnered with a local community college to provide company-specific training! When companies chose their city, buildings went up FAST, workers were trained, and the city exploded with jobs.

    Liked by 9 people

    • Sylvia Avery says:

      Interesting, informative post. Thanks.

      I knew we were being strangled by regulations, but much like the Swamp, I had no idea how bad the situation actually is/was.

      When Candidate Trump made the statement you quoted above about regulations, I never doubted his sincerity but to be brutally honest I never thought he could do it. I figured between the greeners protesting and the media squawking there was NO WAY he could make a real dent in regulations.

      Once again, I was as wrong as I can be. It has been amazing to watch. While the Left’s hair has been on fire and they have been spending their time and energy chasing after unicorns and protesting everything, they have succeeded in stopping none of it. So much has gone under the radar. I would see a report about certain regulations being rolled back and I would brace, waiting for the explosion. But it went like a whisper on the wind. Time and again. Utterly amazing.

      Maybe it was planned. Or not. Either way, you can’t argue with the results!

      Liked by 3 people

      • piper567 says:

        Sylvia, the comment you made ab the greenies, and the new EPA being able to just ignore the greenie factor as a threat to the President’s policies, are why the entire Left is going batsh!t over Pruitt’s success right now.
        Pruitt is just steamrolling ahead, as if the protests do not matter.
        I live in Navy Blue WA, and every little demonstration against ANY energy progress is front-page newsworthy…and then the usual suspects pile on, and any development is squashed.
        No more…we shall see what happens offshore in CA.
        Instead of doing their job, our vile, pathetic Congress is trying to denigrate and discredit the Good Guys who promote MAGA policies, and Pruitt right now is running the gauntlet.
        I loved it this a.m. when Pruitt said he is just going to continue to promote and facilitate the President’s policies.

        Liked by 6 people

    • Maquis says:

      Kenyan Economics Suck.

      Liked by 1 person

    • Esperanza says:

      Just a word for Keynes, his nostrum were for CLOSED economies, not the wide open ones we have now. Could be that Trumponomics will Make Keynes Great Again lol.

      French Socialists adore Keynes, especially the Bernie flavour. I once gave one coniptions when I told her he belonged to the Liberal party (meaning classical liberal, not progressive), a heresy in France lol. You should have seen her face 🙂 She was a young magistrate. Scary.

      Like

  11. Murray J. Philip - Nashville TN says:

    I am reminded of a book by Ronald Reagans Chief of Staff (Howard Baker) who prophesized that Reagan was the President whose campaign rhetoric most closely match his governance (UP UNTIL NOW in my humble opinion) because Reagan NEVER TOLD STAFF what to do or what he wanted, so they were forced to go back to the campaign rhetoric for policy direction.

    Liked by 4 people

  12. wolfmoon1776 says:

    Beautiful explanation, Sundance.

    THIS CENTRAL IDEA – the core nature of MAGAnomics – is as important as your earlier capture of the quintessence of the TRUMP DOCTRINE:

    “MAGAnomics operates in the space between two entirely divergent economic engines.”

    This is big. It shows that MAGAnomics is a BALANCE, and THAT idea – balance – is a STRONG argument in any mathematically-governed system – particularly one that experience shows tends to favor balance.

    Your explainer about the roles of Kudlow and Navarro – who are themselves VSGs and hardly errand-boys – brings me to an important realization.

    VSGs like Trump AND his “killers” may all have their own theories and ideas, but they can RECOGNIZE when somebody else has a rational, sound, and highly workable approach, which will very likely SOLVE THE PROBLEM, and they SIGN ON to the core ideas – especially if they see that with increased buy-in, the core ideas become more and more successful. That is what I think is happening here. People have their own ideas, but they see that Trump’s core ideas provide an extremely sound framework for realization, and their subsequent acts of selling convergence on that framework are basically DISCIPLESHIP.

    Liked by 8 people

    • Sylvia Avery says:

      “Kudlow and Navarro – who are themselves VSGs and hardly errand-boys – brings me to an important realization.

      VSGs like Trump AND his “killers” may all have their own theories and ideas, but they can RECOGNIZE when somebody else has a rational, sound, and highly workable approach, which will very likely SOLVE THE PROBLEM, and they SIGN ON to the core ideas…”

      Wolf, my man, I think you nailed it. You put into words something that has been circling around like a wisp in my brain, and I recognized it immediately when I read your words. What an amazing team PDJT leads!

      Liked by 8 people

      • wolfmoon1776 says:

        Thanks! Yes – an amazing team. I first started realizing just how many levels sharper than sharp the Trump approach was, when Mnuchin started speaking up as a calm and immovable advocate for MAGAnomics. Mnuchin modulated a pitch-perfect persona as he forced people to take MAGAnomics seriously by defending it soundly but calmly and (most importantly) RESOLUTELY – so that people came in to the ideas and “had a look around” (which is not easy to do in highly investigative and skeptical “investor space”). A softer or louder defense would not have worked – Mnuchin pushed things with an authenticity that got past my suspicious cat whiskers. He was leaving himself no path to “get out”, and that impressed me. But even more powerful – Trump HAD to know this stuff was there when he hired Mnuchin!!! Master Killer!

        Liked by 4 people

        • Esperanza says:

          Also, I disagree with Sundance on this, they are highly skilled negotiators, T promised the best, and at this level, they work as a team and have assigned roles. On a side note, Macron has the same background, worked for Nestlé as what is called a “Business Engineer”, albeit not for long.

          Liked by 1 person

        • Sylvia Avery says:

          I know exactly what you mean about Mnuchin. I saw him in action, too, and thought that he had bought into MAGA, and he sells it well. He’s thoughtful, positive, firm. Quite convincing.

          Liked by 1 person

    • Tegan says:

      Wolfmoon…a concept that TRex seemingly didn’t understand. I really liked TRex and am grateful for what he accomplished at the time when it was greatly important but your last sentence sums it up. Thanks for a good post.

      Liked by 6 people

      • wolfmoon1776 says:

        YW! 😀

        I do think that Rex was placed in a somewhat untenable position with the HIGHLY infected Hillary/Kerry State Department. Rex could NOT go in there without being forced to bend to AT LEAST two masters, one being a coordinated group of long-term underlings looking for ways to damage Trump, and actively working on those ways using DNC-CIA assets. Rex made as much headway as he could, but ultimately, the two masters got him. I am pretty sure Pompeo has a grip on those problems from the other end, and will take care of them if they do not flee first.

        Liked by 2 people

    • Maquis says:

      Rock On, Wolf! Seriously Value-Added Comment. Comme toujours!

      Liked by 4 people

    • “MAGAnomics operates in the space between two entirely divergent economic engines.”

      Between Local-Nationals and Global-Nationals.

      Liked by 2 people

  13. Perot Conservative says:

    Aside. The way the Left is going after the head of the EPA, he must be highly effective. We have to keep him.

    Trump didn’t gave to trade pork and cut deals to slash regulations. He could just do it. Immediate.

    Obama had free money, $10 Trillion in hot checks, and cheap oil. But the economy never took off. Stupid car buy program. Keynesian economics failed (just like in the Great Depression, when government policies extended the Great Depression!) ACA, more regulations, and higher taxes stifled our economy.

    Liked by 9 people

  14. Maquis says:

    Find out we will.

    Liked by 3 people

  15. Ellie Solo aka Maid Marian says:

    A clarification on GDP and imports may be helpful, b/c it’s a little difficult to summarize the concept of GDP.

    Sundance says:
    “Simultaneously, it must be remembered that every dollar removed from imports actually increases the GDP. The value of all imported goods is deducted from the combined value of all goods and services we produce.”

    The first sentence is correct only if the value of domestic consumption removed from imports is replaced by a domestically-produced product (that is also consumed domestically).

    The second sentence is inadvertently misleading. In the GDP calculation, mports are not deducted from the combined value of goods/services the US produces domestically. Rather, GDP is calculated from consumption, i.e. sales in the US. In order to go from the measurement of sales to the different concept of estimating production, the value of sales that are produced ex-US needs to be subtracted from the sales/consumption number. Equally important, the value of domestic production that is not consumed domestically has to be added to domestic sales to get to production.

    Liked by 1 person

  16. Shark24 says:

    Hmm, my two year old basic Whirlpool washer may need to be donated to our local family shelter and Mrs. Shark24 will get an even better one. Of course, I’ll be the one doing the actual laundry work (being that I’m kinda retired now) but it will be with ‘Merican hardware!

    Liked by 3 people

    • ladypenquin says:

      Look up Staber Company. Made in America, (Ohio) water saver washer. The washing basket is turned on its side with the opening topside – benefit of a “front loader” but not having to bend over. Does a great job, they ship it and you can install yourself, if you like that kind of thing. 🙂

      Liked by 3 people

  17. Janie M. says:

    Because I subscribe to the Consumer Product Safety Commission email alerts, I say Chinese steel/processed metals are inferior… metal frames of their manufactured products have a tendency to fracture. Other side of the coin, any products with electrical circuits (also made in China) tend to short out, some causing electrical shocks and/or catch fire. Don’t know how long it will take for our manufacturing base to get up to speed. Don’t know how many factories still exist.

    Liked by 2 people

    • ladypenquin says:

      It’s not just their metals that are inferior. All their dishes and coffee mugs, etc. etc. chip or break easily, while vintage American dishes are still going strong.

      Liked by 1 person

    • Retired EE says:

      OK, There are a number of issues here. RANT Warning!!! Sorry for the length. I had to put my oar in the water!
      The company I worked for sourced a lot of components and some resale products from China. I have to say there are world class manufacturers in China producing metal and electronic products on par with anything we produce in the US. That said, you have to be careful when working with them since there are quite a number of manufactures there that will use low cost materials to save a couple of cents. On the other hand I had one west coast circuit board contract manufacturer that completely screwed up an electronic assembly we had to scrap and my project was late as a result! Bad quality, didn’t read the drawing requirements, and completely messed up the product! But they were cheap and purchasing went for cheap! So, it can be spotty. China has a different set of standards for metals that don’t particularly match the ASTM standards we use and SOME of their manufacturers do not control the alloys closely which can cause lots of trouble if the in coming inspection does not verify the alloy grade. With electronic assemblies, safety critical components/assemblies need to meet safety standards like various UL standards. UL DOES have inspectors in China and they do regularly inspect the facilities producing the products and the products them selves. Safety critical parts specified in the UL product report MUST be the exact component specified and tested by UL. If a UL inspector finds they have substituted a part they will shut the plant down. If they find an assembly at the US plant with the wrong part they will stop production also regardless of where the assembly is made. To address this we had engineers that would go to China every two or three months to check with each supplier. I’m not personally particularly fond of doing business off shore but they manage to find good suppliers and manage them more or less effectively.

      All of that said, China does subsidize many areas I believe to kill our industry and they have been effective in that. I 100% support President Trump with his tariffs. Bring back manufacturing. We have seen machined stainless steel components produced and shipped to our dock for less than we could buy the raw bar stock for! Something is way out of wack. Tariffs need to address this! Companies that look for the lowest cost, I won’t mention any names the initials are similar to Walmart, will get products optimized for cost and not necessarily quality. We the consumer are somewhat culpable for this at least in part. Shop for price at the expense of quality it is what you get and what retail outlets provide.

      Here is an interesting one. We needed a new washer and drier. Looked a Whirlpool but found quite a number of reported quality issues at the time (about 10 years ago). Their products were largely made in Mexico with China components. We bought Bosch products. Interesting, a German company with products made in the USA. Not a recommendation but just a notice. By the way they work great!

      Oh well I will end this rant here.

      Liked by 2 people

      • tonyE says:

        Our Maytag washer and dryer were made in the US. Previously we had had a Maytag Neptune pair that lasted 15 years… it was made in the US too. I did require one new drum in the dryer. When I got rid of it was because it needed parts that had become hard to come by.

        In between the Maytags, I bought a GE pair Hecho en Mexico. It was a Piece of C###P. Never really worked and required a new dryer drum and heat sensor just 13 months out, one month out of warranty! Just a year later, the heat sensor for the dryer failed again. I pretty much dumped the whole thing, the washer was still running. Adios pendejo! El Señor Washer GE was not cheap either… heck, I did not go cheap on anything.

        Liked by 1 person

      • Perot Conservative says:

        How big was the mortgage?

        I inherited one from a friend, after a year it got this pesky error message.

        Like

      • Janie M. says:

        Ahh, Retired, recent CPSC recall, electrical components (factory in Mexico) shorted, believe it caused fires. The product in question didn’t affect me so I didn’t pay close attention to what it was. This is not to say, US made products aren’t problematic and won’t be recalled but since so much of our products are made in China, they are more likely to be recalled.

        Like

    • Perot Conservative says:

      California spent approx. $9 Billion on a bridge between San Francisco and Oakland, no increase in capacity, no mass transit, and half a bike lane. Plus Interest may take it over $15 Billion.

      It leaks, and steel that was heated twice has “micro fractures”. Brand new. Chinese steel and dodo decision-maker’s. But it’s “pretty”. Written up extensively in the Sacramento Bee.

      Original cost estimate before the Brown brothers entered the picture: $1 Billion.

      Liked by 2 people

      • Janie M. says:

        Yup, Perot, I know about that boondoggle. Archived the article (believe it was the S. B.) laying out all the problems – which included the fracturing of the anchoring rivets.

        Like

        • Perot Conservative says:

          To think I was a peon at a “professional construction management firm” … one of our former president’s helped rebuild Bosnia. He knew his sh*t, had solid engineers.

          Liked by 1 person

          • Janie M. says:

            Perot, if memory serves me right, the Chinese construction firm had never built a bridge before. Believe its low bid is what sealed the deal.

            Like

            • Perot Conservative says:

              I thought it was just Chinese steel? Contract stipulated American steel, but prices had spiked so high the winning firm submitted 2 bids, 1 with American steel, 1 Chinese steel. The number was so huge they flipped.

              I’m sure this will be in one of the “do not do” lectures. I think one person raised a stink, knew some issues, and they were blackballed.

              Like

        • Perot Conservative says:

          Backstory? Several articles mentioned problems they were having, and apparently a female sales engineer (?) said it was OK to reheat the improperly made parts, something like that, bc they had done something similar on the Richmond San Rafael Bridge… which is a completely different bridge, 20% of the traffic at best, a retrofit, and not the largest single-spire bridge (?) ever constructed! Engineers and managers blew it big time!

          All those computers, all those degrees, and now its Russian roulette.

          Bay Area Rapid Transit (BART), which goes under the bay, now maxed out. That will be another disaster, just like the White Elephant High Speed Not High Speed Train to Nowhere. Democrats! … no expert here … but going up straight Highway 5 where there are 20-30 mile stretches of nothing, is better than looping Highway 99, with thousands of businesses and hundreds of little cities. Lawsuits, delays, problems, slower. Ugh.

          Liked by 1 person

          • Janie M. says:

            Perot, another future problem came to mind… (thought I had save the article but couldn’t find it last night). It is my understanding there is a parallel fault line (cannot recall name) next to the San Andreas fault. They intersect IN the bay. Don’t know what the regulations mandate for structures (bridges, etc.,) in the event of an earthquake.

            Like

            • Perot Conservative says:

              Multiple articles! Last I read several years ago, there are some enclosed rooms under certain sections of the bridge where cabling attaches, etc … it was damp in there, and rusting cables, which the PR rep told the journalists was normal! Journalist showed pictures to an eminent engineer at UC Berkeley, he confirmed not normal.

              Bike railing also didn’t properly attach, and there was more unplanned leaking.

              Liked by 1 person

              • Janie M. says:

                Well, when the BIG one hits, it will be cataclysmic and the inferior quality of the construction/materials will be another attributing factor. But the blame primarily lies with CA’s government officials across numerous agencies.

                Like

    • Esperanza says:

      This worries me as it’s practally impossible to buy any electrical stuff here that’s not Chinese. I have already replaced the transformer on two spotlights. House renovated barely ten years ago. Looks like another has gone.

      Liked by 1 person

      • Janie M. says:

        Esperanza, I know – everything we buy is now labeled in a version of, “Made in China” or it bears a China sticker, etc. There is NO longevity/durability in their products. This is why we MUST return to manufacturing our own products. It truly comes down to a safety issue.

        A few months back, there was a recall (Walmart brand, I believe) on a slow cooker. The electrical components in the bottom of the appliance smoldered and eventually ignited, melting the base. I know working folks will prep their slow cooker meals in the morning, etc., before leaving for work, so they can come home to a hot prepared meal. Could you imagine this happening while you were out of your house? Who would sound the alarm?

        Like

  18. deplorable says:

    With NAFTA, what’s to keep Whirlpool or Samsung from manufacturing their washers in Mexico and then shipping them to the USA duty free?

    Like

    • GB Bari says:

      What’s to keep them from doing that? President Donald J Trump.

      Like

    • waltah says:

      They’re aware of that issue. One thing that’s been discussed is charge tariffs on ALL imports in some way that doesn’t penalize NAFTA participants if they meet domestic content requirements. The details weren’t clear to me.

      Liked by 1 person

    • Esperanza says:

      The uncertainty. Already brought them scuttling back. Uncertainty, one of the biggest risk factors in business in NON stable countries

      Like

  19. Ospreyzone says:

    “Wages are growing, albeit modestly at first – but now gaining speed, as a result of economic expansion and increased employment.”

    Remember, the key here is that wages would normally grow very steadily as PDJT adds fuel to America’s economic engine through incentivized productivity increases. However, the continuing presence of cheap labor throws a wrench into that equation. Until we can get real control over the invasion at our southern border and the H-1B/ H-2B visas deceptions, there will continue to be an anchor holding American wages artificially low.

    The other problem is harder to solve, but nonetheless even more critical. Most, and I mean around 80%, of American millennials could not read Sundance’s post that you just read and understand it. Our educational system is so systemically rotted, that few college grads today could pass a high school exam in any subject area given circa 1960. Only 3-percent of public colleges require any economics course at all. Stop and think about that. How easy is it for progressive socialists to lead these sheep to ruin by promising them easy rewards (e.g. restitution, student loan forgiveness, basic wage…)? Making inroads into true educational reform would be a nice goal for the MAGA second term.

    Liked by 2 people

  20. Top_10 says:

    Larry is excellent for this assignment. Facts, candor, humor, toughness and humility. Mr. Kudlow was accepted by the globalists because he came from television and was considered possibly not too damaging to the establishment. Economically speaking, Larry’s prognostications are a sonic sledge hammer to their cornered market interests. The crazy part is that if the crony globalists would stop trying to run the game, their very own interests would swell in the economic expansion. I love how Trump just uses Larry for what he’s soooo wanting to do, in and, of his own motivations. Our President aligns his employees’ best attributes with the jobs he needs done. So simple and so good – poetry in motion,…ok maybe a limerick once in a while ; )

    Liked by 1 person

  21. Results.

    That is the President Trump economic policy.

    Tax cuts became effective Dec. 22nd. Sales of new semi-trucks used to pull trailers from place to place, doubled in January, February, and March compared to a year before. Factory workers who were laid off because of slumping sales were called back to work. Demand to move goods by truck increased. This means the economy is growing.

    https://brassballs.blog/home/semi-truck-sales-doubling-means-economy-is-growing-and-trumps-tax-cuts-are-working

    Trump’s threat of 20 per cent tax on new cars built in Mexico cause VW, Mazda-Toyota, Volvo, Mercedes-Benz, BMW, Ford to add jobs and expand in U.S.

    https://brassballs.blog/home/trumps-threat-of-20-per-cent-tax-on-new-cars-built-in-mexico-cause-vw-mazda-toyota-volvo-mercedes-benz-bmw-ford-to-add-jobs-and-expand-in-states

    Liked by 2 people

  22. Steve 2A III% says:

    Imagine how much further along we could and would be without the “Russian collusion” BS? Or here’s a radical concept-if the Republican RINOs and feckless so called “leadership” actually got behind the MAGA agenda? And if you really want to go off into lala land, if more Democrats got on board…
    Kudos to PDJT for what he has accomplished so far. Really shows yet another facet of how damaging the RINOs and Democrats are to we the people, and how little they actually care about us-it’s all about THEM.

    Like

  23. Jacob-J says:

    Just wanted to say…the Fed Reserve is not to be trusted! I saw on the business news…wall street smells RATS! they are saying the likelihood of the Feds going crazy-overstep is REAL. The likelihood of recession is REAL, BECAUSE of Fed crazy-overstep!

    Liked by 1 person

  24. Pyrthroes says:

    Jeez, Louise! This all sounds so coherent, so economically rational, one has to ask: Where have these seemingly so self-evident initiatives, policies, been for Lo! these latest fifty years?

    The answer is: Trump is his own man, not a politician (albeit a brilliantly successful candidate) but –how to put it– a true man-of-the-people taking long-suffering citizens’ long-term financial as well as socio-cultural interests very much to heart.

    We’re convinced that people sense this… not only is Trump, the billionaire insider, “on our side”, but as such he rides as dragon-slayer against a cruelly indifferent, penultimately corrupt Establishment concerned only to exploit constituents regardless of laws, principles, ethical or moral strictures of any realistic kind.

    Not to make invidious comparisons, but America’s Founders acted just this way. Washington, Jefferson, Virginia planters as well as merchandising Yankee gentry, make nonsense of Marx’s insufferably obnoxious, superficial “class warfare” generalities. What he and purblind academics from ye ole Charles River to San Francisco Bay neglect is humanity’s abiding, all-powerful spiritual potential: As Churchill, beset by dire evil, urged FDR in 1941, “Give us the tools, and we shall finish the job.”

    Liked by 1 person

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