A Racist, A Conman and a Cheat ...
Tough week for the President of the United States! The leader of the free world was accused of being a racist, a conman and a cheat by his own personal advisor.
Michael Cohen was before the Congress oversight committee. He had worked for Donald Trump for a period of twelve years, serving as a vice president on the Trump organisation. Working as Trump's personal counsel or "consigliare" he was widely regarded as fixer or enforcer for the now President.
It was Cohen who had arranged payments to adult film star Stormy Daniels and Playboy model Karen McDougal to prevent them from discussing allegations of affairs with Trump. It was Cohen who was charged with the responsibility to threaten schools and colleges not to reveal SAT scores or any record of Trump's academic performance. What could the oft proclaimed smartest guy in the ring have to fear?
Cohen revealed how Trump had inflated statements of net worth to secure banking loans, deflating asset values, when it suited to mitigate tax payments.
Cohen revealed Trump had decided to run for President with little expectation of winning. It was to be the biggest brand exercise in history. The biggest "infomercial" in the campaign of campaigns. A campaign of self interest, ask not what your country can do for you ... Trump was well aware what the run for President could do for the Trump organization. Not least, a boost to brand value, estimated (by Trump) at $4 billion in 2013 and Trump hotels in Moscow and Pyongyang perhaps.
Cohen had once said he was ready to take a bullet for the President. The spectacle of Trump's one time enforcer now denouncing him in televised proceedings detailing a "catalogue of cruelty and crimes" was truly shocking.
Republican diehards denounced Cohen. "Liar, Liar Pants on Fire" the not so sophisticated poster taunts from within Congress. He is a rat "lying to reduce his jail time" Trump proffered from Hanoi. No denials or response to the accusations made. Attacks on Cohen, his wife and family the flavour of the day. Some of the language was reminiscent of "The Godfather" and not "The West Wing". "I am a liar but not lying" claimed Cohen.
Trump diehard supporters have already made up their minds, the Grey Suits in the GOP may not be so sure.
The Art of the Deal ...
Tough week for the President of the United States. The master of the art of the deal came a cropper in Hanoi this week. The President had been spurred on by hopes of the Nobel Peace Prize allegedly sponsored by Japan's Prime Minister Shinzo Abe.
It was "heel spurs" that enabled Trump to avoid the draft in a previous attempt by Uncle Sam to get Trump to Vietnam. It was "ego spurs" that led to the trip this time round.
"Trump in Vietnam, getting killed at home by Cohen" the irony was not lost on Seth Myers the master of US political satire. Trump made the flight on Air-Force-One, Kim Jung-un made the 66 hour trip by train, a distance of over 2,000 miles. Despite an amicable series of meetings, the summit ended in confusion. The Americans had wanted an end to nuclear weapons in North Korea, the North Koreans had wanted an end to sanctions against the regime.
The propositions were unacceptable to either side. Aides had warned of intransigence with little hope of a deal on the day. It was an act of theatre to distract from the issues at home for Trump. Kim Jung-un expressed confusion about aims and objectives of the negotiation. Not for the first time confusion about Trump's "Art of the Deal" followed inconclusive talks. "Sometimes you have to walk" explained Trump. "At least I get to fly back on Air Force One" he should have added.
Trump's art of the deal came under further question this week. Tariff Man Trump is having second thoughts about the trade war with China. The deadline for the introduction of further tariffs was extended. By the end of the week, Trump asked China to remove tariffs on US agricultural goods. China's retaliation against U.S tariffs has hit American farmers badly. Exports to the mainland are expected to fall by over 50% from the $20 billion recorded in 2017. "This is very important for our farmers and me ..." explained Trump.
Janet Yellen former chair of the Fed explained that Trump has little grasp of economic policy and the role of the Fed. For many over there, including the farmers, it is becoming an expensive lesson in learning ...
Good news on growth ...
Some good news for the President this week. US economic growth in 2018 was confirmed at 2.9% up from 2.2% prior year. Growth accelerated through the year. On our preferred year on year measure, growth in the final quarter was 3.1% compared to 2.6% at start of year. Investment surged by 6%, Consumer spending was up by 2.7%
Exports increased by 4%, imports increased by 4.6%. The trade deficit is increasing as domestic growth sucks in a higher volumes of goods.
Most analysts expect growth to slow in the current year to around 2.5%. If the trade issues with China are resolved, growth may then be higher. The trade deficit will continue to deteriorate. The internal deficit, will continue to expand.
Trump has brushed off deficit concerns, whilst pushing through extravagant tax and spending plans. Now with the Democrats in charge of the house, Trump is expected to become the champion of fiscal responsibility as a series of clashes are likely in the months ahead. Trump may not know much about economics but he does have an eye for appeal at the polls ...
That's all for this week, have a great week-end. We will be back with more news and updates next week!
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for updates on the UK and World Economy.
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