Trump, Congress and Wall Street
24 December 2016 | Pago Pago, American Samoa
Trump euphoria has hit the Street and the Wall Street guys think the world is looking up and the second coming is at hand. Jamie Dimon even sees a new Renaissance. Trickle down will work, we are told, and tax cuts and supply side economics will carry the day, even though historically they never have.
But things always look up for the Wall Street crowd, except when they have a liquidity crises. They are salesmen and they sell a lot of blue sky to the American public. That is their business and that is why we have the 1933 and 1934 Security Acts and the mess that just occurred. The economy outside of the financial sector is not their bag. They don't understand it or much economics either. But they do counterbalance " the sky is falling" bears who forever hang out in the wings and predict doom as quintessential contrarians.
The truth is almost no one has a decent handle on what is coming economically medium or longer term, but all, especially the Street guys, waive their banners and shout like they have it all pinned down. The truth here is much depends on how we handle developing economic problems and the Wall Street crowd has proven itself very poor at that and Congress is no better. The president has almost no means to do anything.
But back to the Trump effect, how much it lead to depends how how Trump and Congress can get along. Will Congress support a big infrastructure program? It didn't with Obama. Perhaps Trump will have to let that one go, too, just as he has already let go of his promise to "drain the swamp" that is D.C. In fact, Trump seems to be dredging and expanding the swamp. Hey, but this is the Republican "Post Truth" era, so where is the problem? The problem is everyone else will see Trump as a failing sham and back away from him.
For all his cajoling and pandering, Trump's agenda for America is going to be shut down by Congress. At least twenty-five republican members of the House —more than 10 percent— have already said they will not support the efforts of their party’s standard-bearer. That does not include the democrats who will join them This is much more akin to a Congressional roadblock for Trump than a presidential rubber stamp of approval.
Then there are the congressional Teabaggers who will fall out with Trump soon enough over much he wants and the cost of it. Finally, over the years, each alternating minority party in congress has developed strong legislative weapons to hamper and forestal much that a president might want. The truth us Trump is headed toward a brick wall with Congress that sooner or later will render his efforts to spend and rebuild American, token at best. This developing reality will shut down the Wall Street euphoria soon enough.
Trump is in trouble. He and his supporters just don't know it yet.