It doesn’t get more pathetic than this. After the Donald’s unexpected outbreak of fiscal sanity Tuesday afternoon when he halted talks with Crazy Nancy on a +/- $2 trillion Everything Bailout 5.0, it only took a 400 Dow point swoon for the King of Debt to return to form.
During Wednesday and much of yesterday he was touting a series of standalone bailouts for airlines, small businesses and households until Nancy finally said no dice. Soon thereafter Stevie Mnuchin was ordered to strap on his knee-pads and genuflect his way back to Capitol Hill, whereupon he informed her that, why yes, the Donald was actually in favor of the very “large-scale” stimulus deal after all.
That is, the one he had just been against after he had long been enthusiastically for it.
According to a Pelosi spokesman, Mnuchin told Pelosi in a 40-minute call that President Donald Trump wants agreement on a comprehensive stimulus package, which was enough to send futures blasting higher, and hitting 3460 overnight, a level last seen on Sept 4 just after the market slumped from its all-time highs.
So to remove all doubt, Trump made clear during late Friday morning that the doors to the nation’s depleted treasury are to be flung wide-open, while the White House leaked that a revised $1.8 trillion package is just what is needed, apparently, to rescue the Donald’s faltering campaign.
Thus tweeted the Donald,
Covid Relief Negotiations are moving along. Go Big!
We know of nothing this craven and contemptible in all of US fiscal history. Whether Everything Bailout 5.0 gets done in the days just ahead or after the election, you can add a minimum of another $1.9 trillion to this year’s orgy of stimulus spending. That means when the dust finally settles the mad-men,-women and-theys on the Potomac will have fired a $5.3 trillion fusillade ($3.4 trillion in the first four Everything Bailouts) against a hole in the GDP which is likely to end 2020 (Q4) in the range of $800 billion.
That’s right. Washington’s bipartisan wards of the non compos mentis will have mortgaged future taxpayers, born and mostly unborn, by more than 6.6X the GDP loss during 2020 that stemmed from the government’s own lockdown orders and Covid-Hysteria spreading. And, of course, had a rational targeted protection and herd immunity policy been followed in the first place, the loss of GDP would have been only a fraction of the above mentioned estimate.
For want of doubt, here is the quarterly progression of real GDP since Q4 2019 indexed to the Q4 2019 GDP deflator level. For Q3 2020 (which is already over), the indicated level represents the average forecast of the Atlanta, New York and St. Louis Fed and the Conference Board of +25.5% annualized, while the fourth quarter forecast of +3.05% annualized represents the average of the Conference Board and the New York Fed.
Real GDP in billions (Q4 2019 $):
- Q4 2019 actual……………………….$21,747;
- Q1 2020 actual……………………….$21,472;
- Q2 2020 actual……………………….$19,548;
- Q3 2020 forecast…………………….$20,795;
- Q4 2020 forecast…………………….$20,947;
- Change, Q4 2020/Q4 2019……. ($800 )
Needless to say, in opening up the budgetary floodgates in this hideously disproportionate manor, the Donald had only one thing in mind. To wit, getting the stock average back to another all-time high in order to boast that America’s struggling, debt-entombed economy is on the comeback trail and will soon again become the Greatest Economy Ever.
Of course, there has really been nothing more behind the Donald’s budgetary vertigo of the last few days than inducing the mullets, machines and Robin Hooders of Wall Street to hit their “buy” keys. That was more or less let out of the bag recently when former White House chief of staff Mick Mulvaney told Fox Business:
“We always needed to put Kudlow on TV — on your show — when we needed the markets to go up.”
Perhaps Mulvaney spoke in jest after having put up with the insufferable Kudlow for so long in the White House, but even then the context for this bit of snide humor tells you all you need to know. That is, the historical fiscal conservative party is now led by a certifiable madmen, a Wall Street crony capitalist Democrat, a supply-side clown and two turncoat sycophants, who are the living betrayal of the 2010 Tea Party revolt—the last small phalanx of financial sanity to challenge the bipartisan duopoly during this entire century.
After all, the last two named culprits—chief of staff Mark Meadows and former staff chief and budget director Mick Mulvaney—were among the actual co-founders of the Tea Party Caucus and spent the Obama years warning about the fiscal armageddon being brought on by Barry and his lefty comrades. But the implied rancid hypocrisy of their current embrace of the Everything Bailouts is really only the half of it.
Even as high level White House functionaries this pathetic duo did not command absolute power. Still, they do exemplify Lord Acton’s famous admonition none the same. That is to say, like the Donald himself, they have been absolutely corrupted by the exercise of power, and in their current abasement the nation’s impending financial calamity is writ large.
In a word, they can apparently justify the utter fiscal infamy emanating from the White House at this moment on the grounds that the Donald must win at all hazards in order to stop the Kamala Harris/Left Progressive Regency from taking power. In a variation of Bush the Younger’s infamous quip that he was bailing out Wall Street to save the free market, today’s so-called conservative Republicans are bankrupting the nation in order to save it from socialism.
As the Donald would say, you’re welcome!
The truth of the matter is that there are a few very bad things that the Blue Wave would bring to the legislative agenda that will fortunately never happen. For instance, they could pursue a sweeping Green New Deal by means of:
- Heavy-handed regulatory mandates such as banning fracking, prohibiting the use of fossil fuels for power production and home heating and requiring that the auto OEM’s produce zero carbon emissions fleets within a decade; or
- Fiscal bribery via massive subsidies to induce the same outcomes.
The former would actually get the job done and bring on an economic catastrophe, but it will never pass.
When it comes to command and control socialism, America’s PAC-money ridden politics has an automatic braking mechanism. In this case, a mighty coalition of the auto, utility, home appliance, pipelines and home heating industries, coal producers and railroads, the oil and gas production sector and its drilling and fracking supply chains (e.g. Wisconsin has nary an oil well, but a huge fracking sand extraction industry that ships the white stuff from the shores of Lake Michigan westward in massive unit trains) would succeed in so thoroughly diluting and legally booby-trapping such mandates as to elicit decades worth of litigation and administrative rule-makings.
Hollywood liberals, AOC and their ilk would be sorely disappointed, but the K-street lobbies, law firms and consultants would become so flush as to think they had died and gone to crony capitalist heaven.
And we know this from the school of hard knocks. As a member of the US House energy committee back in the late 1970s, we fought the Carter energy mandates tooth and nail; and then as budget director shortly thereafter sought to gut the abomination called the National Energy Policy (NEP) by pushing the regulatory system toward maximizing every one of the loopholes and booby-traps that had been afixed to the swiss-cheese style statutory language.
On the other hand, the Trumpified GOP has perversely and surely inadvertently closed the door on the massive subsidy route to the green nirvana of coast-to-coast windmills, solar farms and biomass fermentation factories. Uncle Sam will truly be broke when they take the oath.
So count the Green New Deal as a colossal Washington cluster-f*ck that will generate huge dead-weight regulatory and fiscal costs, but history will likely also show that Sleepy Joe did not quite leave America shivering in the dark.
Likewise, Medicare-for-All would not be some kind of de novo unmitigated calamity; it would end up only as a super-charged version of the mess we already have, and which Republicans have been so reluctant to frontally challenge that they literally jump over one another advocating socialized medicine in principle via subsidies for uneconomic cost-averaged group health plans and bans on market prices for high risk enrollees (i.e.pre-existing conditions).
Stated differently, what we are dealing with here is a crucial historical legacy. Rather than adopting European style health socialism after WW II, the US went for a crony capitalist version that amounts to socialism for the beneficiaries, capitalism for the providers and a resulting waste and excess ridden delivery system that spends 18% of GDP on roughly the same outcomes achieved in western Europe for 10-12%.
Unfortunately, the crony capitalist health care horse is already out the barn-door. Therefore, when at the end of the first legislative season they oxygenate and prop-up Sleepy Joe before the White House teleprompter to explain the new BidenCare system, it will be nothing more than a recycled version of ObamaCare—with an explicit and universal “public option”.
That is, a massive pool of America’s high risk legions of slovenly diabetics, fast food junkies, social media addicts, alcoholics and sedentary slugs who can no longer frequent the malls—will end up getting cheap Dem-mandated premiums in the public option, which, in turn, will generate massive new demand for services from the medical provider guilds.
At the same time, the private health insurance industry will surely confer its highest honor on Uncle Joe for ridding them of their profit-destroying high cost enrollees.
As we said, Medicare-for-All is not something that can be avoided by keeping the King of Debt in the White House; it’s something we are already slouching towards anyway—especially after the GOP’s miserable failure to repeal ObamaCare—and the only issue is the speed by which we get there.
As to the rest of the so-called radical socialist agenda, there is some pretty kooky stuff, but it won’t be the end of the world if it happens. For instance, there is not much Washington can do about “defunding the police” because 95% of the $200 billion spent each year on police and prisons comes from local and state budgets. And as for their promised Federal law to ban choke-holds, the body cam industry is already salivating over the cash.
In fact, the only real reason to re-elect the Donald is not to stop the socialism we already have and which is becoming steadily more toxic under Dem and GOP rule alike.
No, the one thing the Donald has stood steadfastly for is putting solid conservatives on the courts–including strict constructionists like Neil Gorsuch and Amy Coney Bryant— and insuring that the root protection of liberty embedded in the constitutional separation of powers is resolutely maintained.
But even on the Dem court packing plan, which is apparently the word that can’t be mentioned until November 4th, we are not quite sure that we will be worse for the wear if Sleepy Joe manages to cross the finish line at the Electoral College. However it goes down, we doubt whether an Electoral College landslide could ever happen in Red State America.
So what we can say is that this is not 1936. And that means a 1937 style outcome is even more likely should the Dems actually try to add Supreme Court Justices to the 9 that have sat for upwards of 160 years.
After all, FDR had won by the greatest landslide in history up to that point and campaigned relentlessly against “nine old men” on the Supreme Court.
The latter had intrepidly knocked-down some of the worst New Deal economic schemes–like the fascist National Industrial Recovery Act (NRA), which were actually popular among vast segments of the working class during the Great Depression. Yet when FDR tabled his court packing scheme in early 1937, it died on the legislative battle field and paved the way for a sweeping victory by his enemies in both parties during the 1938 by-elections.
By contrast, the Biden Court Packing Plan is self-evidently the scheme whose name can not be mentioned, meaning the odds of getting and executing a voter mandate is somewhere between slim and none.
In the meanwhile, we have it on no less authority than Crazy Nancy that the president may not be thinking clearly because of the drugs he has taking while being treated for the Covid.
“The president is, shall we say, in an altered state right now,” Pelosi said on Bloomberg TV. “I don’t know how to answer for that behavior.”
For just this once, she might be right. After imposing another round of crushing new sanctions on its financial sector, the Donald today actually dropped an F-bomb on the Iranians during an interview on Rush Limbaugh’s radio show:
“They’ve been put on notice: If you fuck around with us, if you do something bad to us, we are gonna do things to you that have never been done before.”
Well, we thought maybe his verbal complaints about the Forever Wars were a thin thread of justification for keeping Sleepy Joe out of the Oval Office.
But now there’s this.