How Now, Red Cow?

 

How Now, Red Cow?

Be Careful what you wish for.

Did Donald Trump, based on the Electoral and popular vote, now controls or is about to control all three branches of the federal government (Executive, Legislative and Judicial). Does he get the absolute mandate, de facto autocracy, he wanted? Or will his efforts to impose Project 25 values, now acknowledged as the guiding platform, be so extreme as to create a backlash bigger than his mandate? Time will tell, but many of his announced policies will actually conflict with what his voters are willing to accept, even contradictory with their true priorities. Which are, according to exit polls? Daily cost of living reduction and tighter immigration policies. Although white working-class men feeling marginalized by DEI policies did resonate, most of his other culture policies were left in the wake of his reelection.

As Kamala Harris failed to distinguish herself from a very unpopular elderly President, and thus the blame for higher prices and immigration nightmares heaped on Biden (whether he could have done more to fix these is a question), the two major issues why Trump won. The icing on the victory cake also brought together two very conflicted constituencies to vote for Trump: pro-Israel Zionists, mostly older, aligned with Trump-fan Benjamin Netanyahu and those GenZ voters horrified at Biden’s unremitting supply of weapons that enabled Israel to pound Gaza into near oblivion. How Trump will handle this conflict is key, but Netanyahu may have an excuse for that ceasefire now.

However, that mandate among not-always-Trump voters did not embrace extremism. If democracy continues – and since got the control he wanted, he did not have to “terminate” the Constitution – Trump might actually be limited by a desire to enhance his historical legacy plus a possible backlash that could tank the MAGA right in the mid-terms and beyond. People want cheaper housing costs, lower daily cost of living realities in insurance food and fuel plus border control as their main objectives.

As David Lauter, writing for the November 9th Los Angeles Times notes, dealing with cost stabilization is easy, but Trump seems hellbent on screwing it up: “Preventing a new round of widespread price increases should be easy: Inflation is already largely under control after the rapid rise in costs of 2022 and early 2023, and interest rates are coming down. Doing nothing would basically get the job done… The problem is that Trump doesn’t want to do nothing. He wants to do several things — including imposing massive tariffs and enacting new individual and corporate tax cuts — that run a high inflationary risk… Immediately after the election, interest rates rose as bond investors began to price in the possibility of renewed inflation under Trump.”

If tariffs act as expected, de facto sales taxes on everyone fomenting retaliatory tariffs on US exports, the normal economic reaction is higher prices here and fewer opportunities to export. The notion that foreign governments will pay the US-imposed tariffs and fund everything is simply not how tariffs work. Importers pay those tariffs and generally pass those higher costs to consumers; many Trump supporters did not understand that. That American-made manufactures (like cars, aircraft, etc.) are rife foreign-made components further complicate this pledge. US consumers will pay more. A massive tax cut for the rich is on the table again. Trump’s tax cut in 2017 failed: where the incentive to “job creators” was more dividends, more merger/acquisition activity, but no increase in those “good jobs” touted, plus a few trillion-dollar hit to the deficit. The tax cut most certainly did not pay for itself. Neither will any further such cuts.

The other factor that I do not hear much about is the potential devastating consequence for the value of the US dollar from a possible international backlash against this US effort manipulate overall trade vectors. US economic bullying could ignite a global response that could result in a fade in the status of the US dollar as the primary global reserve currency (the currency metric which is used in most parts of the world for trade and valuation purposes) and increasing global efforts (already underfoot in Russia and China) to work around US financial standards (like SWIFT banking) with new replacement platforms. Such a result will make our ability to borrow to fund deficits increasingly difficult, reduce the value of the dollar and thus result in vastly higher costs and forced austerity for American consumers.

The other mechanism to pay for that tax cut includes offsetting massive federal budget cuts. And while that sounds popular, most Americans are wary of letting a near-trillionaire, Elon Musk, take his scissors to the discretionary part of the budget. We still owe interest on our deficit, which will not go away. If the tax cuts are not countered by massive reductions to the federal budget, inflation’s gnarled teeth will start chomping away as prices skyrocket. Do we really want reduced healthcare, the Affordable Care Act, Medicare and Social Security… cuts to education support?

Rational immigration policies are also a top-line item. Cruelty and budget-busting massive incarceration and deportation of all undocumented residents are not what most Americans really believe will happen. Indeed, pulling out a huge segment of low cost labor, particularly in agriculture and construction, will send food costs higher and prevent the construction of all those new residential projects needed to relieve the housing crisis. And no, that undocumented work force will not vacate desirable houses and apartments.

While deportation of some of these undocumented residents is high on the priority list, “That doesn’t mean, however, that they’d support [Trump advisor and extreme MAGA Stephen] Miller’s dreams [of complete deportation]. Voters’ views on immigration are often complicated. A separate question on [a] Pew survey found that 61% of voters — although only one-third of Trump supporters — said that undocumented immigrants should be able to ‘stay in the country legally, if certain requirements are met.’… Other surveys have found that support for deportation drops when pollsters ask about specific categories of immigrants who lack legal status, such as longtime residents, spouses of U.S. citizens and people brought to the U.S. illegally as children.” Lauter.

And then there are the policies that will alienate those independent voters who thought Trump exaggerated certain promises, but if he implements them… “There’s much less reason to think voters long to hand broad government authority over to Elon Musk or give Robert F. Kennedy Jr. control of federal health policy… On other topics, there’s strong evidence of what might be called an anti-mandate. Even in conservative states, for example, voters made clear that they oppose moves to restrict abortion. There’s very little [grassroots] support for rolling back LGBTQ+ rights, despite the wishes of some of Trump’s evangelical supporters... And there’s little public support for Trump to go on a revenge spree against his Democratic opponents.” Lauter. We’ll see.

I’m Peter Dekom, and there is a huge gap between what a candidate promises to deliver and the harsh reality that often laces those policies with a double-edged sword… and where “alternative facts” just do not work.