This morning in Europe, before the market opened in New York, Trump lied about having received two calls from China pleading to negotiate. Everyone with a scintilla of sense knows he just pulled the alleged calls out of his ass. And the spokesman for the Chinese foreign ministered said he didn’t know anything about any phone calls.
Nevertheless, reported the Wall Street Journal, “U.S. stocks climbed Monday after President Trump said China wants to strike a trade deal, signaling a potential de-escalation in trade tensions between the world’s two largest economies.”
It is metaphysically possible that the big money people believed the lie that Trump pulled out of his ass. Much more likely, I think, is that the big money people, hearing Trump’s lie, thought other people would believe it, so they might as well take advantage of some buying opportunities after last week’s market decline.
Likeliest of all, perhaps, is that lots of the big money people acted in anticipation that lots of other big money people would pretend to believe Trump, so they might as well bid up stocks one more day.
Wheels within wheels.
Meanwhile, Aaron Blake, whose title is “senior political reporter” for the Washington Post, sucks his thumb for many, many paragraphs on the topic of what will happen with the China trade war. There is not a whole lot of new material in the piece, but I think it helpfully sums up the evidence bearing on two key questions: Will Trump pursue his delusions about trade wars and tariffs to the bitter end? And, if so, what will be the consequence? Blake concludes,
It’s too soon to call this entire exercise a failure — China is paying a significant price, too, after all, and you never know what could ultimately come out of this — but we’re getting closer to a situation in which difficult decisions will have to be made about how far forward to press. It may not be the nuclear button, but there is such thing as mutually assured economic destruction, and it’s worth asking what happens when this truly gets into brinkmanship territory. (A president threatening to prevent U.S. companies from doing business in China isn’t exactly a sign of easing tensions.)
Not that we should expect Trump to tip his hand like he appeared to Sunday. Both Trump’s pride and his reelection are on the line, and that’s a volatile mixture. This is looking as though it may be the genuine test of his leadership that so many Americans feared.
Well, Let Me Say This about That
At three points, including the last sentence of the piece, Mr. Blake says that critics “fear” that Trump will be Trump and drive the economy into the tank. And perhaps that is true of some “Trump critics.” But it is not true of your humble scrivener.
I am a Trump critic and I “fear” the exact opposite: that Trump might have a rare semi-lucid day and wake up to the realization that he has got to crawl on his knees to the Chinese leadership and take the least bad deal they find it in their hearts to offer him.
As to the alternative, I wouldn’t say I welcome the coming recession. If I needed a heart replacement, I wouldn’t welcome that surgery, either. But sometimes you urgently needs things you don’t particularly welcome. And this country urgently needs a really bad recession to bring some folks to their senses.