Friday, January 22, 2021

Orange Man Gone

By David Stockman

The everlasting irony of Donald J. Trump’s presidency is this: He had all the right

enemies, but virtually without exception made all the wrong decisions during his

hapless four-year sojourn in the Oval Office.

The list of his enemies is enough to make any right-thinking supporter of peace,

prosperity and liberty proud. That starts with the TV networks and print organs of the

mainstream stenographers club, who peddle the state’s propaganda and call it news.

This most especially includes the masters of mendacity at CNN, the New York Times

and the Washington Post.

It also includes the bipartisan national security mafia, the climate change howlers, the

race card hondlers, the Russophobes, the Neocon War Brigades, the NATO/IMF/UN

acolytes, the Washington nomenclatura, the careerist racketeers of Capitol Hill, the

beltway shills of the Lincoln Project, the Silicon Valley thought police and the celebrity

scolds of entertainment and media, among others.

With so many worthy enemies it is amazing that the he managed to do so little good and

so very much wrong. But there is really no mystery to it when you cut to the essence

of Donald J. Trump, the POTUS Poseur.

That is, the Donald was a principle-free Caesarian Nationalist whose over-riding

objective was his own personal power and glorification. His route thereto was inflaming

a superficial nationalism that allowed him to pose as the defender of the flag, the

military, the borders, guns, domestic jobs, policemen and firemen, law and order,

religion, middle-class probity (sic!), the right to watch politics-free football games and,

above all, to stand tall in the face of foreign malefactors and plunderers of America’s


Alas, as much merit as might lie among this pastiche of groups, things, purposes and

symbols, the Donald’s form of bombastic knee-jerk advocacy added up to nothing that

was coherent, urgent or ameliorative of what really ailed the nation, and which had

caused the desperate citizens of Flyover America to cast a 63 million-vote Hail Mary

during the 2016 election. 

Above all, the economy was failing the working and middle classes because millions of

well paying jobs had been off-shored and because corporate America has eschewed the

hard work of business building to pursue the insider self-enrichment of financial


But the Donald’s brand of protectionist nationalism had nothing to offer by why of

rectifying these ailments. At the same time, his unremitting pressure for even easier

money and even lower interest rates only exacerbated the actual problem. That’s

because the Fed’s Keynesian money-pumping and mindless 2.00% inflation targeting

had been the real cause of the hollowing-out of the main street economy over the past

several decades.

We will address this matter in depth in Part 2, but suffice it here to say that “bad trade

deals” instituted by his predecessors and nefarious trade practices by foreign suppliers

were not the problem. Nor did the Donald’s punitive tariffs on aluminum, steel,

appliances, solar panels and China produce an improved outcome.

On that score, the proof is in the pudding. The US trade deficits in goods (red line) have

been worsening for decades, but no amount of double-talk and excuse making can say

that this downward trend was reversed or even arrested after December 2016.

In fact, the $64 billion trade deficit that month has essentially staggered ever larger

since then, ending at an all-time record of $86 billion in November 2020.

In this instance, there is a distinct reason why the modest reduction in the trade deficit

which began to materialize during 2019 has now reversed, causing the negative balance

to plunge to heretofore unimaginable depths.

To wit, the Donald’s signature policies over the last four years were fiscal promiscuity

like never before, coupled with a demand that the Fed recklessly monetize the Trump

administration’s massive debt issuance in order to keep interest rates at economically

ludicrous rock-bottom levels.

So exactly how did the Trump Administration fight the Covid-Lockdown recession?

Why, by massive spending, borrowing and monetization of the debt, which trillions of

proceeds were dropped far and wide on the American public. The latter, in turn, spent

its stimmy checks and unemployment insurance top-ups on imported goods via Amazon

because services like restaurants, bars, gyms, movies, sporting events etc. were

shutdown by orders of the Trump-enabled Virus Patrol.

In fact, the disastrous trade impact of the post-March 2020 Everything Bailouts and

$3.6 trillion of money-pumping by the Fed provide a concentrated demonstration writ

large of what has been wrong for decades.

That is to say, the massive growth of the Welfare State on the fiscal front and the drastic

financial repression and over-issuance of the dollar at the Fed have on the margin 

sucked-in imports from low wage economies and sent US jobs and middle class incomes

to these venues in return.

In the present instance, the Trump Administration just triple-pumped this infernal

prosperity wrecking-machine during the last 11 months. Not surprisingly, the US goods

deficit has now plunged by 45% from the pre-Covid February level of $59.7 billion.

Likewise, the Donald’s form of bombastic nationalism and the genuine Taftian concept

of an America First foreign policy turn out to be not the same thing at all.

To be sure, the Donald’s instincts about the obsolescence of NATO, the folly of the

Forever Wars, the pointless neocon attacks on Russia, the abject failure of regime

change interventions were all correct. But he ended up making no difference at all on

the actual policy front because of his knee-jerk affinity for nationalist bombast and

militaristic grandeur. 

What he utterly failed to grasp is that the vast military/industrial/intelligence/think

tank/NGO complex about which President Eisenhower famously warned in his 1961

farewell address is the fiscal equivalent of a self-licking ice cream cone.

There is so much loose change to fund self-serving policy research and advocacy—tens

upon tens of billions worth—- in today’s $820 billion national defense and international

affairs and security budgets that what Congressman and executive branch officials are

served up in their hearings and briefings is a massively one-sided case in favor of

perpetuating the imperial status quo.

Needless to say, the Donald’s massive and utterly unneeded defense spending increases

have only made this self-licking ice cream cone far more potent because the loose

change has gotten far more ample.

In dollar terms, the national security budget (consisting of the defense and international

affairs budget functions) was already massively bloated at $675 billion in FY 2016. The

evidence for that lies in the stark contrast with the FY 1962 national security budget that

Ike left in place upon leaving office.

In dollars of the day, it totalled $58 billion, but adjusted by the GDP deflator for the

cummulative inflation during the interim 54 years that figure is equal to $360

billion of purchasing power in 2016 dollars.

So here’s the thing. The greatest general to ever occupy the Oval Office, and at the peak

of the Cold War when the Soviet Union’s industrial might had not yet been euthanized

by socialist central planning, believed that $360 billion was more than enough meet the

national security needs of the United States.

Of course, 54 years later the Soviet Union had slithered off the pages of history; China

couldn’t and dare not attack Europe or the US because without their export markets its

economy would collapse overnight and its communist rulers would be strung from this

highest towers of Beijing; and the rest of the world consisted of pipsqueak powers like

Iran with a defense budget of $18 billion that did not even figure in the calculus of real

threats to homeland security.

So in the real world the $675 billion national security budget the Donald inherited could

have been cut back by nearly 50% to Eisenhower’s $360 billion benchmark. In turn, that

would have required force levels and conventional weaponry to be shrunk back to what

was needed for a Taftian homeland defense—sans the foreign bases, power projection

and war-fighting capabilities needed for Washington’s failed wars of invasion and

occupation all around the planet.

But instead of recognizing that the defense budget problem was one of bloated

commitments and improper missions, not inadequate dollar resources, the Donald

bought hook, line and sinker the “hollow” military scam that the Pentagon has been

peddling ever since Eisenhower’s time. That is, when the great general said nothing 

doing upon taking office and promptly cut the defense budget by 38% in real terms over

the next several years.

In short, American servicemen needed to be brought home—the 62,000 in Germany

and Europe, the 27,000 in South Korea, the 54,000 in Japan, the 13,000 in Afghanistan,

and the tens of thousands more in the middle east and North Africa. Instead, the

Donald gave them modest raises, shiny new weapons, more dollars for pointless patrols

and training missions and Washington parades and airshows, too.

The net of it was nearly a $150 billion or 21% increase of the national security budget to

$820 billion (FY 2020), including tens of billions more for contractors and think tanks

hired to prove why no missions should change and no budgets should be cut.

So the Donald ended-up boasting about the greatest military in history and national

military power like never before. so doing, he left America First entombed with the

ghost of Senator Robert Taft and General Eisenhower himself.

In further installments we will take on the myths of the Donald’s alleged Greatest Ever

Economy; the fact that national energy independence was the work of Mr. Market, not

the Donald; the folly of Trump’s trade protectionism and anti-immigrant border

policies; and the small government based axiom that the solution to civil unrest and

local crime outbreaks is Federalism, not a bombastic law and order sheriff in the Oval


In the larger context, the Donald failed because he aspired to be America’s Caesar, not

just because he was an uncouth, narcissistic lout. 

David Stockman was Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.

The above originally appeared at David Stockman's Contra Corner.

1 comment:

  1. One of Trump's most mystifying faults was choosing Swamp creatures (his mortal entries) as his most important appointments.