President Donald J. Trump with President Xi Jinping during Trump’s visit to China last November. Photograph courtesy The White House/Shealah Craighead.
Nature may abhor a vacuum, but Wall Street really abhors uncertainty. As an investor, you can make money in wartime, and you can make money in peacetime. What is really tricky is to make money when one day you’re going to war and the next you’re not.
At the moment, we’re in a trade war – except when we’re not. The idea fluctuates not merely from day to day but from Trump Administration individual to individual on the same day. Sometimes it seems like a good cop-bad cop routine with President Donald J. Trumpet playing implacable bad cop to new economic adviser Lawrence Kudlow’s urbane good cop. Sometimes it all seems like a bargaining chip. Except, of course, that that would attribute to the Trumpettes a degree of Machiavellian sophistication that they heretofore have not evinced.
See the problem? As a result, the market’s been bouncing around like a Nuke LaLoosh fastball. (See “Bull Durham,” a 1988 baseball movie that despite some groan-worthy observations about women holds up pretty well.)
You would think that this would be a source of deep concern to a Republican administration and a Republican Congress, in the past reliable friends to businesses big and small. But no, no, this seems to be of little import. What seems to be of paramount importance is appearing tough to the base – rushing National Guardsmen to the southern border for a Fox News-invented crisis; stoking immigration fears; dashing the hopes of the Dreamers; taking on necessary opponents (Amazon at home, China abroad) but in the most irrational and ineffective of ways.
A New York Times poster and Trump supporter pointed out recently that Trump doesn’t have to care what people think, because he was democratically elected. This is wrongheaded in so many ways, but I’m afraid my dashed off reply was also poorly thought out. I wrote that Trump doesn’t care what people think, because he’s a narcissist.
But that’s not correct. Because he’s a narcissist, he cares what people – certain people – think about him. He needs that Ann Coulter “shoot ’em at the border” audience. That’s not the same as caring about people. That he does not.
As for democracy giving him carte blanche, it’s actually the opposite. China’s President Xi Jinping – who recently appointed himself president for life, and wouldn’t we all like that kind of job security – doesn’t have to care what anybody thinks, least of all Trump. He can afford to let him huff and puff and wait him out. Trump’s the mighty oak bellowing and breaking in the wind; Xi’s the bamboo, lying down till the storm passes. Who’s the stronger?
No one is suggesting that we should let China take our intellectual property and walk all over us or that a big company like Amazon should bleed the Post Office or the Mom and Pop stores without paying for it. But there is a way to go about these things – with a carefully thought out plan, ideas floated in back channels, tough but flexible negotiators who speak with one voice – the president’s – when addressing the press and only when a direction has been firmly established. You don’t bellow and bluff while sending out your lacquer-haired, deer-caught-in-the headlights cabinet minions to trip over themselves as they try to sell your “we don’t really have a plan” plan.
In the end, Wall Street may not like a calm, measured tariff plan, and there may be continued volatility – to say nothing of heartache for the business community. But at least then the Street – and the rest of us – would have a sense of where we’re going.