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It’s accelerating — downwards. This is the beginnings of how a tiny trade war can produce a major recession

This morning’s news:

The article begins:

SHANGHAI – China said it would impose tariffs on $75 billion in American-made goods if President Trump carries through on his promise to escalate his trade war with Beijing, in a sign that neither side is ready to back down from an economic conflict that has already cast a shadow over global growth prospects.

China’s plans to retaliate, which were announced late on Friday in Beijing, include putting tariffs on American agricultural products, crude oil and cars.

The news was likely to unnerve investors who worry that the trade war between the world’s two largest economies will drag down global growth.

For the rest, click here.

I don’t think either China or the U.S. wants to crash the world’s economy with their present Beggar Thy Neighbor trade policies — similar to those which led the world into the Great Depression of the 1930s — but it should looks like we’re headed that way.

We have two pig-headed leaders — Xi and Trump, who have gigantic egos and don’t like compromise.

Even if you don’t believe me about the downwards spiral — and think the U.S. can stand handsomely on its own two feet and to hell with the rest of the world — just think about the uncertainty that the Trade War and the Immigration War are injecting into businesspeople and investors’ tiny brains.

For more, read today’s piece “Employers are Wringing their Hands,” which begins:

Hiring Is Very Hard for Restaurants These Days. Now They May Have to Fire.

Amid a severe labor shortage and a renewed U.S. crackdown on undocumented immigrants, owners are facing a choice: fire workers or risk prosecution.

Facing one of the most severe labor shortages in decades, restaurants across the country are trying virtually everything to recruit cooks and dishwashers, from offering quarterly bonuses to providing training programs for ex-convicts.

Now, the specter of increased immigration enforcement is putting many of those restaurants in a more fraught situation: let go of trusted employees or risk criminal prosecution.

The problems began in March and April, when the Social Security Administration sent letters to hundreds of thousands of business owners, notifying them that the names of some employees did not match the Social Security numbers on their tax forms.

These “no-match letters” sowed fear and confusion in workplaces that depend on immigrant employees, like farms, factories and construction sites. But few businesses have felt the impact of the government notices more than restaurants, which have long relied on undocumented labor and struggled with high turnover.

For more, read here.

Forget restaurants, let me tell you about all the businesses in Columbia County, mid-New York State, which can’t find workers because ICE (and fear) have driven all the local Latinos into hiding and the local businesses are turning down business right, left and center. Tell me about it. I have a bunch of jobs which can’t be done for weeks or months. Who knows when.

I am simple-minded person. Sit down the Chinese and solve some simple problems and move on. Stop with the escalating tariffs. Every economic study ever done preaches the virtues of Free Trade. It’s what caused our incredible boom of the past fifty years.

I remember Australia. At one stage it had high tariff barriers — the idea being to encourage local businesses behind the protection of high tariffs on imported competitive goods. It didn’t work. It penalized Australian consumers with pricey goods. It limited their choices. It was awful. It was turning Australia into a third world country. Then they dropped the tariffs. Australian businesses suffered. But new ones grew up. Innovation exploded. And many many Australian businesses expanded overseas. The Australian economy was transformed.

And the success? Australia hasn’t had a recession in nearly 30 years.

Am I depressed this morning? Yes.

And wait, there’s worse:

Breaking news: Trump orders (in a Tweet) US companies to look for an “alternative to China.”

This Trump tweet tanked the value of my share portfolio by $75,000 — all in a matter of minutes.

Thank you President Trump.

The escalation is escalating, right down the toilet.

This is pure insanity.

Where will it end? When will it end?

Want more? Read this piece by Thomas Wright in the latest issue of the Atlantic:

Trump Has Defected
The president crossed an important line when he canceled a meeting with the Danish prime minister.

Yesterday, President Donald Trump canceled a meeting with the new Danish prime minister, Mette Frederiksen, because she refuses to discuss the sale of Greenland. Greenland used to be a Danish colony but now belongs to the people of Greenland-the Danish government could not sell the island even if it wanted to. Trump likely did not know that Denmark is one of America’s most reliable allies. Danish troops, for example, fought alongside U.S. forces in Iraq and Afghanistan and suffered 50 fatalities, and Danish forces were among the earliest to join the fight against the Islamic State.

Many Americans may laugh off Trump’s latest outrage, but Trump crossed an important line. It is one thing to float a cockamamie idea that no one believes is serious or will go anywhere. “Let’s buy Greenland!” Yes, very funny. A good distraction from the economy, the failure to deal with white supremacy, White House staff problems, or whatever is the news of the day. It is quite another to use leverage and impose costs on Denmark in pursuit of that goal-and make no mistake, canceling a presidential visit is using leverage and imposing costs. What’s next, refusing to exempt Denmark from various tariffs because it won’t discuss Greenland? Musing on Twitter that America’s defense commitments to Denmark are conditional on the negotiation? Intellectual justifications from Trump-friendly publications, citing previous purchase proposals and noting Greenland’s strategic value and abundance of natural resources? (That last one has already happened.)

This is the kind of thing the Russians and the Chinese do. It is territorial revisionism-the use of national power to acquire territory against the desire of its sovereign government and its people. The use of leverage would also call into question the U.S. commitment to the 1975 Helsinki Final Act, which is the cornerstone of stability in Europe. In it, all parties, including the United States, commit to “refrain from any demand for, or act of, seizure and usurpation of part or all of the territory” of all states in Europe.

The cancellation of Trump’s visit to Denmark is part of a disturbing pattern. Trump regularly beats up on and abuses America’s closest democratic allies while being sycophantic to autocrats. His staff has followed suit. In July, for example, Trump hounded British Ambassador Kim Darroch out of his job. This followed two years in which Trump and his administration sought to undermine Prime Minister Theresa May’s government at every turn. Trump has been scathing in critiques of Germany and Chancellor Angela Merkel. The U.S. ambassador to Germany, Richard Grenell, never misses an opportunity to criticize his hosts. The U.S. ambassador to Poland publicly called for U.S. troops to be moved from Germany to Poland. Trump has reportedly said the European Union is “worse than China, only smaller.” Several senior U.S. officials have also attacked the European Union, including National Security Adviser John Bolton, Secretary of State Mike Pompeo, and U.S. Ambassador to the European Union Gordon Sondland.

Meanwhile, Trump writes autocrats and wannabe autocrats blank checks. In May, Trump called a senior member of the Senate Foreign Relations Committee to complain about a bipartisan letter asking the president to raise concerns about democratic backsliding in his meeting with Hungarian Prime Minister Viktor Orbán. When the two leaders met, Trump instead praised Orbán in front of the press and expressed no concern. He has also embraced the Brazilian strongman Jair Bolsonaro. The Trump administration has gone out of its way to help Mohammed bin Salman, the crown prince of Saudi Arabia, ride out the storm following the brutal murder of the journalist Jamal Khashoggi. He can’t say enough nice things about the North Korean dictator Kim Jong Un. He has done worse than nothing on Hong Kong, secretly promising Chinese President Xi Jinping that he would not condemn a crackdown and calling the peaceful protests by more than 1 million Hong Kongers “riots.”

And yesterday, on the day he canceled his visit to Denmark, he said he favored Russia rejoining the G7 without mentioning any preconditions, which would have the effect of abolishing one of the only forums for major democracies to meet with one another.

The Danes, like the British and the Germans before them, will downplay this latest episode. They value their alliance with the United States, and their governments will take whatever abuse Trump metes out to them in the hope that better days will come. However, this strategy may not survive if Trump wins a second term on his “America First” platform. At that point we can expect U.S. withdrawal from NATO and a partnership with Russia to be on the table.

One uncomfortable truth is already inescapable. Free societies and autocracies are at odds with each other-over human rights, the rule of law, technology, freedom of the press, the free flow of information, and territorial expansion. At this particular moment, it is not sufficient to say that the free world is without a leader. He has actually defected to the other side.

You can find this piece here.

Don’t do stupid

+ Don’t go to China. Don’t speak to anyone on the phone in China. Be ultra-careful of any emails, texts or whatever with people in China. Things have changed. The locals are no longer friendly. The authorities are ultra-suspicious. Surveillance has tightened. You will be followed. You will be bugged. I have proof.

+ Do not buy into WeWork. It’s done fine for the CEO, who’s already sold shares. But it won’t do fine for you.

+ Do not buy Prevagen, the brain fixer-upper supplement. It doesn’t work.

+ Don’t employ service technicians without asking “What are you replacing? Filters? Fuses? Bulbs? Parts? Circuit boards?” You need to have a supply of these things at home. It’s amazing what service people don’t have in their trucks. I’m on my fourth day of promised fuses for my busted emergency generator.

+ Don’t choose light fittings with insane, unusual, ridiculous bulbs.

+ Don’t vape. Studies show it hurts your lungs. The vapor alone (without nicotine or marijuana) can cause your blood vessels to constrict, stiffen, and circulate less oxygen.  As the study’s principal investigator put it: “The results of our study defeat the notion that e-cigarette vaping is harmless.” For more click here. 

+ Don’t employ an electrician without checking what he’s hooking up and where. Check that all the circuits actually work and that he gives you a complete wiring diagram — on Excel.

Maybe I’ll feel better if I look at this ridiculous photo of myself with the tie that granddaughter Eleanor made for me?

Or maybe I’ll feel better if I eye two recent pictures. Peter having a haircut and Sophie and Zoe making a cake before all the dough in the world runs out.

Change that to $100,000. Markets are going further down the gurgler. Thank you President Trump.

With President Trump, the only way to make a small fortune is to start with a large one. He did. Why not me?



  1. Mike Nash says:

    Harry, I agree that Trump is awful and mentally ill and just the worst person in the world. Here’s the scary thing tough: Democrats may nominate Liz Warren who is out to destroy Wall Street! THe markets will tank thousands and thousands of points if she wins the White House. Ditto for Bernie Sanders although I don’t think he can win. Of course, if the Dems are dumb enough to nominate Warren, Trump will probably win 40-45 states. That’s what most experts say. We all better hope that Joe Biden can get his act together and that Dems realize that Elizabeth Warren would be a nightmare nominee and, if she should somehow win, a terrible president for investors. There is so much class anger at the “upper class” I think Warren has a decent shot at the nomination. If Trump keeps screwing up she could possibly eke out a win in the general election. Be afraid. Very afraid.

  2. SBowes says:

    It’s a nice a US President is finally looking out for Americans instead of foreign governments, if it takes pain to break the oligarchy’s rule over us, that’s fine with me.

  3. Lucky says:

    Walked into Payson AZ Walmart today and no greeter…ask and was told by the security type at the door and was informed Walmart had fired their greeters who were all old, invalid and too much bother! Do not know if this is systemwide…put a lot of seniors out of work who need to supplement their Social Security.