Will President Trump Cause a Recession? - Vivek Kaul's Diary
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Will President Trump Cause a Recession?

Jun 9, 2016


BALTIMORE - It is a bright summer day outside. A dry breeze sweeps down Cathedral Street and blows away the hot, humid air.

It is hard for us to imagine that anything bad could happen today. But bad things do happen - even on nice days.

The weather was fine when General Custer rode out to the Little Bighorn, too.

Home of the Brave?

Over the weekend, we worked at putting up a board fence - with half-round treated posts and four 6-inch-by-5/4-inch boards.

It was grim work. On a small farm, nothing works as it should. The augur got stuck on a root and sheared a bolt...and the tractor slipped on the greasy clay.

After a few minutes, our shirt was drenched. Ticks were already crawling up our legs. What's worse, we barely made a dent in the job. In two days, we only got about 20 posts in place...with 130 to go.

Progress was slow. But at least it was real.

We were thinking about cowardice...the kind of cowardice that runs rampant in the Home of the Brave.

The voter, the patriot, the investor, the churchgoer - there are few Muhammad Alis among them.

Many readers are annoyed with us. Ali was one of the few real heroes of the Vietnam era, we said. How could we believe it?

Ali challenged the system. He said what all of us must have thought: None of us had a real quarrel with the Viet Cong.

But the typical man hides in solemn conceits and flattering fantasies. He would rather die than challenge the system.

He believes that he is running the country...his sons and daughters, protecting it, are heroes...the Fed will make sure nothing goes too far wrong in the economy...

And as for God...he's always on our side.

Culp's Hill

An expert tells us that the world's climate is changing. He says he cares. It is not that we don't believe him; we just don't know what it means.

Is it good? Is it bad? Will it spoil a picnic? Or increase grain harvests? Is it a fence or a fantasy?

We don't know. We know only that the sun is shining, right here, right now.

You put up Old Glory on Memorial Day; you remembered those who died in the service of their country.

Yes, of course, you did. But who and why?

Did you remember the soldiers who fought for the 1st Maryland Infantry, CSA? Or the Yankees who killed them?

On a hot summer day in 1863, in the fight over Culp's Hill near Gettysburg, the Marylanders were ordered to attack. Their commander, Brigadier General Steuart (a distant relative) protested. It would be suicide, he said. Then, he put his head in hands and cried: 'My poor boys!'

More than half were killed.

Which side are you on...or is he on? What 'country' do you serve?

Manhattan? Death Valley? The rednecks of South Georgia? Or the home decorators of Marin County? Blue states or red states? Fundamentalist Christians or fundamentalist Muslims?

Watch and Wait

There was not much forward momentum in the US stock market yesterday, either.

Still, stocks remain near an all-time high.

Fed chief Janet Yellen reassured investors. If rates rise, and stocks tank, it won't be her fault. She'll bide her time before hiking rates.

And so, we remain in 'watch and wait' mode.

It is one of those things economist Herbert Stein must have had in mind. As he famously put it, 'If something cannot go on forever, it will stop.'

The Fed cannot stay in a permanent state of emergency. It will have to come to an end sometime.

What is amazing is that it hasn't come to an end already...and there's no telling how much longer it will continue.

In the meantime, the claptrap flows, like beer at an Orioles game.

Trump Risk

One of the most prominent (among many) purveyors of myth and fraud is MIT wunderkind and former US Treasury secretary Larry Summers.

Writing in the Financial Times - a bastion of narrative delusion - he takes aim at the presumptive Republican presidential nominee, Donald Trump.

There are many good reasons to think Trump is a mountebank, but none of them seem to occur to Mr Summers.

Instead, he refers to the 'Trump risk', which he believes measures the damage that Trump would do to the US economy if he were elected.

'The economic consequences of a Trump win would be severe', claims Mr Summers in the headline.

But he has no way of knowing what the consequences would be, let alone if they would be severe.

Would they be worse than if Ms Clinton were elected?

No one knows.

'If he is elected, I would expect a protracted recession to begin with 18 months.'


Look at the numbers. Over the past 12 months, US GDP growth has been falling steadily, quarter after quarter. From 3.9%...to 2%...to 1.4%...to 0.8%.

Within 18 months there should be a protracted recession no matter who is elected to the White House.

Convenient Lies

Mr Summers also picks up Hillary's theme: It would be unsafe to have Mr Trump in charge.

'Who will rest secure with President Trump controlling the Federal Bureau of Investigation and the Central Intelligence Agency?' he asks.

He's got a point.

But wait, no one should feel safe anyway - no matter who is in the White House. These agencies are plainly out of control...and have been for many years.

Remember, it was rogue elements of the CIA that launched the Bay of Pigs Invasion - apparently, without informing President Kennedy. And that was more than a half-century ago.

Kennedy vowed to 'splinter' the organisation into a thousand pieces and throw them 'into the wind'. Instead, it was JFK who was splintered.

Since then, the Deep State has grown as fast as the credit that supports it.

But that's the difference between politics and putting up a fence... The bigger the scale, and the farther away, the less we really know what is going on.

So we resort to convenient lies to fill in the blanks...until the 'poor boys' die.

BILL BONNER Founder, Agora Inc

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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5 Responses to "Will President Trump Cause a Recession?"

Ravi Katari

Jun 9, 2016

About three years ago, Mr Subir Gokarn ex-RBI Dy. Governor spoke at my Rotary Club. He made the point that NREGA served a purpose that nobody had realised, which was that it kept the rural population in the villages. He said there would be chaos if NREGA was stopped or cut down as almost certainly there would be an exodus to towns everywhere.



Jun 9, 2016

In a TV program someone brought out data suggesting that leave aside banking sector, there is a overall growth in profit of companies is around 40% and their growth in revenue terms is 4% and you know the GDP growth and the employment data is not par. This is very peculiar statistics, pointing to probably one reason that growth data or method of calculation is not linked to the physical growth..


Ramachandraiah Challa

Jun 9, 2016

It is true that the number of people working in agriculture are reducing very much.This is very unfortunate.It is very necessary that the production in agriculture should be increased to ensure the need for the increase in population and exports.Similarly the number of people working for Industrial production should be more to improve the needs and for exports.It is unfortunate that the number of people in business and trading is increasing leading to increased false economic deals.This is also leading to reduced financial status of India.


Dr. K. S. Ananda Kumar

Jun 9, 2016

Ours is a democratic set up. We have our Communist friends always against Govt. policies. They always expect the Govt. to spend a lot for each and everything, but there is no money. Our people have been accustomed to social supports. Nobody learns their responsibilities. The family planning has become a failure. But,it has also worsened our position making it grave. I can't expect our Govt. to find or make numerous jobs, due to robotics, automation, and digitization and more skills being developed everyday in all fronts. Our beloved PM can't make our people understand how to make our country prosper. First let us have one policy. Let the govt. gives support only to the first child, and no more support to others. At least plan this for those born from this year onward. Only when a war starts, the people will have the urgency to learn and develop or invent and work hard. There is no easy solution to make or find jobs. God alone can save country from bankruptcy.


Atanu Gupta

Jun 9, 2016

Well diagnosed, Very alarming. How Govt will tackle? What abeginingre the alternative? Govt is always concern about unemployment from the beginning .new attractive area in agricultural secto rs have to be search.

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