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Outsiders vs. Insiders: How Trump can avoid a ‘Day of Infamy’ on the economic front in 2020

Leave it to a liberal to add new meaning to December 7th, a day that will “live in infamy” thanks to the Japanese sneak attack on the American Pacific Fleet stationed at Pearl Harbor (on the island of Oahu in Hawaii) in 1941 .

Without rehashing all the historic details, seventy-seven years ago Japanese warplanes assaulted United Trump at Pearl HarborStates Navy ships at anchor, sinking several and effectively crippling our military’s ability to make immediate war on the aggressive Empire of Japan. Thankfully the nation responded quickly and the war took an irreversible turn half a year later during the Battle of Midway.

Today, liberals are talking about a different kind of “sinking,” more political in nature. In a piece titled, “A 'Trump slump' would sink the president,” Juan Williams wrote at The Hill earlier this week, “[T]he biggest political boogeyman [for Trump] is the very real fear that 2019 may be the year the U.S. economy goes into a ‘Trump slump.’

“Trump showed fear last week with his attack on Jerome ‘Jay’ Powell, the chairman of the Federal Reserve. Trump told The Washington Post he made the wrong decision in putting Powell in control of interest rates, bonds and other levers controlling the economy. ‘I’m not even a little bit happy with my selection of Jay,’ Trump said, ‘not even a little bit.’…

“In 1992, Bill Clinton defeated then-President George H.W. Bush on a message of ‘It’s the economy, stupid.’ Twenty-eight years later, it’s entirely possible that another Democrat could beat Donald Trump running on the same message.”

Or so Democrats pray will happen. The economic numbers have been so positive since Trump moved into the White House that Democrats couldn’t hope to run on a weak economy if the trends continue. Needless to say, we didn’t hear much about the unemployment rate during this year’s midterm elections campaigns, with Democrats retreating back into their foxholes to loft substance-free rhetorical grenades at unseen targets while shouting “Russian collusion” and “Trump’s an illegitimate president” with every toss.

All the while American consumer confidence was sky high, people went about spending their tax cut windfalls and bonuses and acted happy and content, enjoying a return to relative prosperity we haven’t seen for a long time. It was almost as though someone competent finally placed a choker on the gargantuan federal leviathan. Now, Democrats want to screw it up.

The fact is, Trump has every right to be upset with Jay Powell. After the national economy slumbered through eight years of hyper-aggressive government intervention during the Obama administration it shouldn’t be too much to suggest the Federal Reserve keep the avenues open for promising economic growth (namely, don’t mess with the interest rates). The stock market’s recent drops are due to those threatened rate hikes Williams alluded to, which is scaring investors -- they’re terrified more are coming.

Markets eventually even out and rates go up or down, but instability kills investment. Higher rates also make the government’s deficit problems even worse, since every minor increase makes it that much costlier to finance the massive national debt. Politicians count on lower interest rates to bolster their demands for big government goodies…but it can’t go on forever can it?

Basic economics teaches if you raise the price of money then people borrow less. Supply and demand sets prices in a true marketplace, but the FED isn’t the same animal. If people borrow less then they also spend and invest less. Inflation is everyone’s enemy (most of all the people who depend on 401Ks and mutual funds for retirement), but smart economists like Trump advisor Larry Kudlow swear inflation isn’t rising along with the growth the economy is experiencing.

The FED set the federal funds rate at or near zero for most of the Obama years. Why the sudden switch when a new and more business-friendly regime has taken charge? Do we want less growth? Do we want fewer jobs? Can’t we have all of those things and still keep inflation under wraps?

The Federal Reserve is supposedly independent of the political branches yet the Fed Chairman is appointed just like the president’s cabinet officers. Unlike the president’s cabinet, however, the FED doesn’t pay attention to the chief executive’s wishes and desires. Does that make it independent or just out-of-control? For years many respected conservatives (such as Ron and Rand Paul) have called for auditing the FED because no one really understands what’s going on behind those tall closed doors.

Williams’ dreams of a “Trump slump” won’t be realized unless Americans lose faith in the positive direction of the economy. While it’s true the federal deficit is growing, tax revenues have remained steady despite the tax rate cuts. Why don’t liberal pundits like Williams ever address the massive borrowing and spending government already partakes in under both parties’ leadership? Why are tax cuts always to blame in liberals’ eyes? Do they seriously claim the government isn’t receiving enough money to spend?

Winston Churchill famously said, “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Another noteworthy British politician, Margaret Thatcher, quipped, “The problem with socialism is that you eventually run out of other people's money.”

Trump isn’t perfect but his philosophy is much more in line with letting free markets decide the flow of goods and services. Critics suggest his administration’s tariff increases are putting the brakes on the economy, but the trade policies haven’t yet fully taken effect and there’s a good argument they’re highly necessary after years of domestic economic favoritism practiced by America’s trading partners and competitors alike.

Trump’s tariffs -- or the threat of them -- have already paid dividends with the new United States Mexico Canada Trade Agreement (USMCTA). The incoming Democrat House majority must soon weigh-in on the three-nation pact, but would Nancy Pelosi and crew dare reject a new treaty which will help American workers and companies compete on a level playing field?

If there’s instability in the stock market today it’s likely due to the prospect of Democrats being successful in pushing through their massive tax and spending schemes which would only balloon the deficit further and send the economy into a nosedive. How can anyone invest with confidence when the government is looking to nationalize healthcare or borrow more to finance “free” college tuition for everyone?

A “Trump slump” likely won’t occur -- but even if it did, Democrats will own their share of it. Any economic downturn will have begun on Pelosi’s watch. Do Democrats believe people won’t notice? Even with the media’s wind at their backs Democrats couldn’t hope to claim the reversal was all Trump’s doing.

The focus might just switch back to immigration if that’s the case. Whereas Bill Clinton won on “It’s the economy, stupid!,” Trump could turn the tables and say, “It’s illegal immigration, stupid!” Illegal alien caravans rioting at border stops is a heck of an image to get voters motivated. National security is a Republican strength, after all.

Regardless of the topsy-turvy stock market there are other indicators of America’s economic health, including the rise of energy production under the Trump administration’s forward-thinking policies. The Editors of The Washington Examiner wrote, “The Trump administration can help coal country by fast-tracking permits for pipelines and otherwise facilitating the already-in-progress transition to natural gas extraction. That has already begun without any government interference, such that Appalachia now accounts for more than a quarter of the nation’s natural gas supply and is expected to account for 40 percent in coming decades.

“Instead of bailing out King Coal, the Trump administration should leave the industry alone to do its business — even if that means just putting its affairs in order in preparation for a gradual long-term decline. A slow, orderly reduction of mining to market-supported levels will be far less destructive for coal workers than the abrupt end envisioned by meddling Obama-era bureaucrats and environmentalists…

“The main point here is that coal country, and the U.S. as a whole, both have a great future ahead of them, and it doesn’t involve bailouts or other bad decisions that will harm the economy.”

This is one area where practically everyone would -- or should -- agree. Liberal environmentalists should like the fact Appalachia is starting to produce clean burning natural gas instead of the much heavier polluting coal; conservatives should appreciate government staying out of the picking winners and losers business (through bailouts and subsidies) and consumers win by enjoying plentiful and comparatively cheap fuels to heat their homes.

The Trump administration was correct in removing the artificial barriers to coal production erected during Obama’s years; the industry simply wasn’t ready for so drastic a transformation and politically speaking, throwing tens of thousands of hardworking people out of their jobs because of government decision-making wouldn’t be popular anywhere.

Trump was also correct to withdraw the United States from the Paris climate accord. As the Editors’ article indicated, America is already doing its part to reduce greenhouse gas emissions at a greater rate than any other signatory to the agreement, and our country’s doing it because fostering the gas industry makes economic sense -- not due to arbitrary mandated limits. This is yet another example of something that’s cost effective and efficient being better for the environment, too.

If climate change is indeed taking place (as my MIT graduate nephew insists it is) it will require every country’s business and political leaders to reach similar conclusions. Taking the government out of energy production (both for and against it), citizens can let their own self-interest choose for them. If it’s good sense to shut down the coal mines -- eventually -- then hopefully natural gas harvesting will fill the employment void (U.S. coal consumption was already at a 39-year low as of last year) for those communities.

As the Editors argued, government can help by providing permits for the necessary infrastructure (they suggested pipelines) to speed development of new sources. Coal can’t move via environmentally friendly (in terms of the number of accidents) pipelines, but natural gas can. Coal is dirtier to burn and costlier to transport since most of it is done through rail transportation.

Would such concerns receive a fair hearing under a Democrat administration? Would Elizabeth “Pocahontas” Warren host discussions at the White House with coal, oil and gas business leaders to work out a solution amenable to all sides? Or would she (or substitute any Democrat presidential hopeful’s name here) simply defer to the whims of her radical George Soros-like environmental lobbyists, activists who publish position papers on why all fossil fuels are bad and why the government must dump hundreds of billions into expensive and less reliable “renewable” sources in order to save the planet?

A socialistic Democrat president would be a disaster for the burgeoning U.S. energy industry. Instead of opening the door to safe and productive energy resource exploration he or she would go searching for “international partners” to dictate how much each nation is mandated to contribute. Federal regulators would also be unleashed on existing industries to make it so arduous and expensive to operate that they’d shut down.

It would be a nightmare…one from which we couldn’t awake.

Democrat constituencies don’t look at the big picture, especially young impression-ables who are yet to make a contribution to the economy. How can the GOP win over younger voters? Might a little freedom to buy booze help? J. Christian Adams wrote at PJ Media, “If the Republicans want to attract young voters, then lead the charge to repeal the National Minimum Age Drinking Age Act that Democrats in Congress passed in 1984. Loudly repeal the mandate and allow states to lower their drinking age to 18 from 21 without federal penalty. Appeal to young voters with beer and bourbon...

“Washington, D.C., should not be deciding how old you have to be before you can drink a Miller Lite.  As a matter of constitutional division of power, the Twenty-first Amendment to the Constitution gives states almost complete power over alcohol.  States have the power to legislate themselves dry, or to eliminate the drinking age altogether, notwithstanding the federal mandate...

“Repealing the 55 mph federal speed limit mandate was one of the first things the new Republican Congress did in 1995. It was also wildly popular and Republicans got the credit. If Republicans want to appeal to young voters, appeal to their desire for freedom. Go ahead, laugh if you want. I’m aware of what is happening on campus and in the classroom…”

Adams pointed out that increasing the legal drinking age didn’t appreciably add any social benefits (such as a drop in drunk driving accidents). As a freedom issue, adults should be able to choose whether to have a drink -- especially since young people are often the first asked to fight in the military.

Local control is almost always a good thing, too. Lowering the drinking age might reduce the pressure on states to legalize marijuana.

President Trump could face a struggling economy in 2020, but there are ways to ensure things run smoothly when the moment arrives. Keeping interest rates low, encouraging clean natural gas production and repealing federal control of the legal drinking age might help the GOP.

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