Trump’s Bite May Be Worse Than His Bark: Stockman Slams “Absurd, Dangerous, Stupid” Policies

    Via Global Macro Monitor,

    Excellent CNBC interview with David Stockman, President Reagan’s head of OMB, who speaks his mind and never holds back.    Some dismiss him as a perma-bear and doomsayer.

    We certainly don’t, just has been a bit early, like every analyst and economist worth their salt.   His analysis and model are sound.

    By the way, if you ever meet someone who claims they always top tick or buy every bottom,  and have perfect timing, run as fast as you can.

    Moreover, the former “beltway boy wonder” doesn’t have to make his money trading and can maintain his conviction without going bankrupt or losing his career.   He will eventually be right.   It’s all timing, my friends.

    Listening to him today, we respect him even more for his intellectual honesty.   We have always perceived Mr. Stockman as a supporter of the president, but we could be wrong.

    He never allows his politics to warp his analysis.  Rare and refreshing.

    Taken To Woodshed

    He was famously “taken to the woodshed” by President Reagan for his statements in a 1981 Atlantic Monthly article, that supply-side economics — the backbone of the Reagan economic revolution – was a ‘Trojan horse’ that would ultimately benefit the rich.”

    He laid it all out there today and held nothing back.

    Massive trade war won’t solve deficits, says former Reagan WH budget director from CNBC.

    Money quotes from today’s interview *

    • Imbalances are not the result of bad trade deals

    • We have had 43 straight years of large and growing current account deficits, that is a monetary issue

    • A trade war is not going to solve it…let interest rates find their right level

    • The fact is, we are heading into a massive trade war in the world

    • Trump doesn’t know what he’s doing at all. He is making it up. He is a hopeless protectionist with a 17th-century view of the world

    • We have an absurd policy — dangerous, stupid. The worst that I’ve seen since my whole career started in 1970 under [President Richard] Nixon, and he did some crazy things

    • The market marches to new highs until it doesn’t

    • In 1990…the average tariff in China was about 30 percent, the average tariff in China today is 3 ½ percent. It is not an issue

    • What they [Trump administration] are objecting to is China’s policy of “no ticky, no washy.” In other words, if you want to come to China and do business, you have to be in a joint venture and share your technology

    • If somebody wants to go to China so they can come on CNBC and brag they are in a growth market then they ought to put up with the local regulations

    • Don’t start a trade war and throw the soybean farmer under the bus because of some big business lobby in Washington is whining about China’s terms of business

    *the interview was concluded before the announcement of a 10 percent on an additional $ 200 billion of Chinese imports was published by the USTR after the market close.  

    Tough words.

    No Reagan Moment On Free Trade

    Sorry,  Mohamed,  we love you but there will be no Reagan Moment” for International Trade.  We hope we are wrong, and we could be, but we don’t think so.        

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