Sorry, investors, but there is no sanity clause.
Two years ago, after the shock of Donald Trump’s election, financial markets briefly freaked out, then quickly recovered. In effect, they decided that while Trump was manifestly unqualified for the job, temperamentally and intellectually, it wouldn’t matter. He might talk the populist talk, but he’d walk the plutocratic walk. He might be erratic and uninformed, but wiser heads would keep him from doing anything too stupid.
In other words, investors convinced themselves that they had a deal: Trump might sound off, but he wouldn’t really get to make policy. And, hey, taxes on corporations and the wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal — or at any rate, that there wasn’t a sanity clause. (Sorry, couldn’t help myself.) Put an unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy things.
To be clear, voters have been aware for some time that government by a bad man is bad government. That’s why Democrats won a historically spectacular majority of the popular vote in the midterms. Even the wealthy, who have been the prime beneficiaries of Trump policies, are unhappy: A CNBC survey finds that millionaires, even Republican millionaires, have turned sharply against the tweeter in chief.
.. The reality that presidential unfitness matters for investors seems to have started setting in only about three weeks (and around 4,000 points on the Dow) ago.
- First came the realization that Trump’s much-hyped deal with China existed only in his imagination. Then came
- his televised meltdown in a meeting with Nancy Pelosi and Chuck Schumer,
- his abrupt pullout from Syria,
- his firing of Jim Mattis and
- his shutdown of the government because Congress won’t cater to his edifice complex and build a pointless wall. And now there’s
- buzz that he wants to fire Jerome Powell, the chairman of the Federal Reserve.
Oh, and along the way we learned that Trump has been engaging in raw obstruction of justice, pressuring his acting attorney general (who is himself a piece of work) over the Mueller investigation as the tally of convictions, confessions and forced resignations mounts.
.. And even trade war might not do that much harm, as long as it’s focused mainly on China, which is only one piece of U.S. trade. The really big economic risk was that Trump might break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply integrated with production in Canada and Mexico that this would have been highly disruptive. But he settled for changing the agreement’s name while leaving its structure basically intact, and the remaining risks don’t seem that large.
.. Now imagine how this administration team might cope with a real economic setback, whatever its source. Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people? Would his Treasury secretary and chief economic advisers coolly analyze the problem and formulate a course of action, or would they respond with a combination of sycophancy to the boss and denials that anything was wrong? What do you think?
Jim Mattis Compared Trump to ‘Fifth or Sixth Grader,’ Bob Woodward Says in Book
President Trump so alarmed his defense secretary, Jim Mattis, during a discussion last January of the nuclear standoff with North Korea that an exasperated Mr. Mattis told colleagues “the president acted like — and had the understanding of — a ‘fifth or sixth grader.’”
At another moment, Mr. Trump’s aides became so worried about his judgment that Gary D. Cohn, then the chief economic adviser, took a letter from the president’s Oval Office desk authorizing the withdrawal of the United States from a trade agreement with South Korea. Mr. Trump, who had planned to sign the letter, never realized it was missing.
.. book by Bob Woodward that depicts the Trump White House as a byzantine, treacherous, often out-of-control operation — “crazytown,” in the words of the chief of staff, John F. Kelly — hostage to the whims of an impulsive, ill-informed and undisciplined president.
.. The White House, in a statement, dismissed “Fear” as “nothing more than fabricated stories, many by former disgruntled employees, told to make the president look bad.”
.. Mr. Woodward portrays Mr. Mattis as frequently derisive of the commander in chief, rattled by his judgment, and willing to slow-walk orders from him that he viewed as reckless.
.. Mr. Trump questioned Mr. Mattis about why the United States keeps a military presence on the Korean Peninsula. “We’re doing this in order to prevent World War III,” Mr. Mattis responded, according to Mr. Woodward.
.. In April 2017, after President Bashar al-Assad of Syria launched a chemical attack on his own people, Mr. Trump called Mr. Mattis and told him that he wanted the United States to assassinate Mr. Assad. “Let’s go in,” the president said, adding a string of expletives.
The defense secretary hung up and told one of his aides: “We’re not going to do any of that. We’re going to be much more measured.” At his direction, the Pentagon prepared options for an airstrike on Syrian military positions, which Mr. Trump later ordered.
.. another layer to a recurring theme in the Trump White House: frustrated aides who sometimes resort to extraordinary measures to thwart the president’s decisions — a phenomenon the author describes as “an administrative coup d’état.” In addition to Mr. Mattis and Mr. Cohn, he recounts the tribulations of Mr. Kelly and his predecessor, Reince Priebus, whose tensions with Mr. Trump have been reported elsewhere.
.. Mr. Cohn, Mr. Woodward said, told a colleague he had removed the letter about the Korea free trade agreement to protect national security. Later, when the president ordered a similar letter authorizing the departure of the United States from the North American Free Trade Agreement, Mr. Cohn and other aides plotted how to prevent him from going ahead with a move they feared would be deeply destabilizing.
.. Last January, Mr. Woodward writes, Mr. Dowd staged a practice session in the White House residence to dramatize the pressures Mr. Trump would face in a session with Mr. Mueller. The president stumbled repeatedly, contradicting himself and lying, before he exploded in anger.
.. Mr. Woodward told Mr. Trump he interviewed many White House officials outside their offices, and gathered extensive documentation. “It’s a tough look at the world and the administration and you,” he told Mr. Trump.
“Right,” the president replied. “Well, I assume that means it’s going to be a negative book.”