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N Korea’s Kim Goes to “Emperor” XI’s Woodshed; Roseanne Soars; 2nd Amendment Under Attack

Al Tuchfarber

THE TUCHFARBER REPORT

Accurate Facts, Analysis, and Forecasts

In-Brief

  1. North Korean dictator Kim was summoned to Beijing to receive his marching orders from “Emperor” Xi for the upcoming negotiations with President Trump. Kim was told he will de-nuclearize.
  2. The 60 Minutes interview with Porn Queen Stormy Daniels did not change Trump’s approval or disapproval ratings.
  3. A repeal of the 2nd Amendment, as proposed by retired Supreme Court Justice John Paul Stevens, has no chance of occurring. It is so extreme an idea that it will cause a backlash preventing more sensible public safety measures.
  4. The revival of the Roseanne Barr show created socio-political shock waves with blow-out viewership numbers.
  5. It turns out that the March for Our Lives wasn’t a student led or dominated event. Research reported in the Washington Post and on MSNBC showed only 10 percent of the marchers in DC were students. The bulk of the 203,000 marchers were the standard anti-Trump, left-wing, upscale, middle-aged female protesters.

In-Depth

What’s Important

North Korea’s Kim Goes to the Woodshed

I’m going to begin this analysis of an existential crisis with what seems a minor point, but the minor point tells an important tale.

As reported by the UK Telegraph, professional analysis by Aberdeen Standard Investments of customs records shows that China has reduced its exports of fuel to N Korea by over 90%. China is N Korea’s dominant source of fuel. The cutback goes beyond what even the strong UN economic sanctions stipulate.

CHINA IS STRANGLING THE N KOREAN ECONOMY AND KIM REGIME.

A modern economy cannot function at all without fuel, not even one in a poor emerging nation like N Korea.

Last week Kim Jong-un went to visit “Emperor” Xi in Beijing. He went to the woodshed to get his marching orders for the upcoming negotiations with Trump. Think of it as a tag-team of Trump and Xi against Kim…Kim has zero chance of prevailing if the Chinese and US Presidents stay on the same page.

It is near certain, as confirmed by the reporting in China’s official press, that Kim was told he was going to de-nuclearize.

The reason is simple, a nuclear N Korea capable of obliterating a major American city, or military base, or a Japanese city is totally unacceptable to the US. The US will react in a way totally unacceptable to China if any of those things occur. Furthermore, N Korea even being close to having such a capability is unacceptable in DC and Tokyo.

Therefore, N Korea’s nukes and ballistic missiles must go.

There has been a great of utter nonsense in the press and from Western analysts about Kim “emerging” on the world stage. This is garbage. He was called to the woodshed by XI, given his orders, and will do what he was told after a great deal of posturing. He has no real choice.

China can easily take away the three thing Kim values…his life, his luxuries, and his dynasty. The actions required by China entail major risks for the Chinese “Middle Kingdom”, but pressure from Trump and the UN give them few options. More importantly, N Korea has become a detriment to China’s long-term goals, rather than just a useful problem for the US that China appreciated for decades.

Trade with S Korea and preventing the US from removing Kim and creating chaos in N Korea on China’s border are now more important than what was useful to China for the last seven decades.

There will be many attempts at face-saving by Kim, but the conclusion is fore-ordained regardless of whether it is forced by Xi or Trump.

N Korea and the Korean peninsula will be de-nuclearized. If Kim resists Xi will starve his economy or Trump will destroy his military and regime. The former is even more powerful that the latter as N Korea is totally dependent on exports from China.

After N Korea, Trump’s strategy appears to target Iran…

Polls and Media

Don’t forget the Tuchfarber 30 Day test — when you get upset about something in the news, ask if it is likely to be IMPORTANT in 30 days or so. Only seldom will it be so and you can usually ignore it.

No Porn Queen Effect

As predicted last week, the 60 Minutes interview with Porn Queen Stormy Daniels had no effect on President Trump’s approval ratings.

Rasmussen Poll interviews before and after the show saw Trump’s approval and disapproval numbers unchanged. The reason is simple. Few Americans, including religious conservatives, did not already know about the level of Trump’s sexual morality before the interview. Well before he was nominated and elected in 2016, the voters had a clear image of his strengths and weaknesses.

The same thing was true of Bill Clinton in the 1990s.

President Trump will be judged by the people on his performance as President and his current behavior, not on his past life.

Tuchfarber global political- economics

Guaranteed Profits for US Shale Oil Producers

The price of West Texas Intermediate [WTI] crude oil has swung wildly over the past five years ranging from $30/ bbl. to $70. It is now in the low to mid-$60 range.

The Saudis, Russians, and others inside and outside of OPEC are negotiating to keep the WTI price near that level with the world standard, “Brent” crude, a bit higher. They have achieved their goal over the last year or so by limiting their own exports and reducing world supply by about two million barrels per day.

This strategy, if it holds together over time, guarantees US producers large profits and incentivizes additional US production.

A recent Federal Reserve Bank of Dallas study of oil and gas companies asked…” What WTI oil price does your firm need to profitably drill a new well?” Depending on the oil field, the average answers ranged from $47 in the Texas-New Mexico Permian basin to $55 for non-shale fields elsewhere in the US.

US production has already surged from five million bbl./day to 11 million now. It is headed higher, especially if the $65/ bbl. price persists.

It is important to note several geo-political factors at work here that go beyond the logic of supply and demand. One is that the Saudis, Russians and others need prices in the $60s to balance their national budgets. Much of their revenue comes from oil and gas exports.

The other is that spikes and dips in oil prices are virtually inevitable. A war with Iran would cause prices to sky-rocket. A sudden collapse of the Saudi-Russia deal would cause prices to swoon.

But, both of those scenarios are likely to lead to only short-term effects lasting months or a year or two.

The bottom line is that US oil and gas production is likely to continue to increase substantially with more and more of both being exported. US and international forecasters predict the US will become a net exporter of energy very soon for the first time in generations.

A closing thought…ten years ago predicting such an outcome would have gotten you laughed out of the room. One of the morals of this story is to keep your mind open to the potential of innovation and entrepreneurship, especially in the US.

Tidbits, Follow-ups, and Nuggets

This is a new section devoted to short, interesting items and brief follow-ups to stories from previous issues.

2nd Amendment Repeal Nonsense

Retired Supreme Court Justice John Paul Stevens produced a firestorm of controversy last week by suggesting the 2nd Amendment be repealed. The odds of that happening are essentially zero.

Without going into all the details, it would take 39 states to approve such a change, meaning just 13 states could block such an amendment. The political reality, just now, given which party controls the 50 state legislatures, is that somewhere close to 40 states would vote NO on such a change.

A few Democratic politicians have endorsed the repeal, but most Democratic officials and the mainstream media have run for the hills away from it; they know it is a disastrous political loser. More gun control is popular; abandoning the 2nd Amendment is not. Extreme proposals like repealing the 2nd amendment will derail some sensible public-safety measures like better background checks and better monitoring of the mentally deranged and of terrorists.

The NRA and the Republicans are slyly grinning as the repeal idea goes public. It is guaranteed to produce additional memberships and donations for the NRA. For the Republicans, it will create a surge of political energy before the crucial fall elections.

March For Our Lives Not What It Was Billed

It turns out The March for Our Lives was not really a student dominated protest. Just 10% of the marchers in DC were students. Most were middle aged, upscale women…the typical participants in such left-wing protests.

As reported in the Washington Post and on MSNBC, University of Maryland sociologist Dana Fisher studied the crowd and interviewed a random sample of marchers. Their average age was almost 50, and a large majority were upscale, well-educated women. Most were frequent protestors against all things Trump and for left-wing causes.

There is no major new movement here. It is the same crowd that has been energized by its reactions to Trump. That is not to downplay their political energy, but it is important to understand the nature of the energy and the characteristics and numbers of its purveyors.

If the Democrats craft a large political victory in the November elections it will be because of this political-demographic group and their energy.

Predictive Political & Economic Measures

Changes this week

POLITICAL MEASURES

  1. Right Direction-Wrong Track— This measure is widely used by pollsters, asking if things are going well or badly in the US. It has proven to be a good indicator if the party “in-power” was going to do well or badly. If the “wrong-track” reading is 62% or higher, it bodes ill for them. If 58% or lower, they do well. THIS IS MY MOST-PREFERRED ELECTION PREDICTION MEASURE. I use many quantitative and qualitative indicators, but this one seems to strip out a lot of extraneous noise. “Wrong-Track” is now at 57%, up 2% from last week.
  2. Generic Congressional Ballot—Also used by many pollsters, this indicator measures the current preferences of voters for which party they prefer in US House races. The polls I’m averaging are now at 46% D and 40% R, the D lead down 1% from last week. More important is that the Democratic lead has fallen from about 13% at the beginning of 2018 to 6% now. Historically, Ds need a solid lead on this measure to win a House majority.
  3. Presidential Approval—Trump’s approval rating, using my measure, is now 44%, up 1% from last week. His approval rating is up from 40% at the start of the year. It is at a below average level for recent Presidents. But, because of his unique and often disruptive style, the Gallup organization and others, including myself, believe this measure underestimates his real approval ratings by 5% or more. I will report his approval rating, but will use it for trend analysis, not election predictions.

ECONOMIC MEASURES

  1. U-3 official unemployment rate—The current level is 4.1%, a 17-year low. Low or falling levels of this measure are a positive for the “in” party. It is low and falling now, down from 4.8% a year ago. The February jobs report saw a huge increase in jobs created and in Americans returning to the job market, both very positive signs.
  2. U-6 unemployment rate [broadest measure, including under-employment]—The current level is at 8.2%. This is a very low level and fell from 9.4% a year ago.
  3. CHANGE: GDP GROWTH—Growth last quarter was 2.9% which is significantly higher than the average growth over the last eight years. THIS IS AN INCREASE FROM PREVIOUS ESTIMATES.

WAR

  1. The jobs issue and war issue are the 500-pound gorillas of American public opinion. If the economy is bad or there is a major unpopular war, the party in power is in trouble. Unpopular wars, like Vietnam and Iraq, shatter their support. Small wars, like Afghanistan and Syria are nearly always underway and usually do not have major effect unless they grow substantially in the cost in US lives.

ANALYSIS

Among the Political Punditry, the conventional wisdom for months has been that a Democratic Wave was building that would gain them the House majority and minimize their losses in the Senate, where they have many vulnerable seats.

I have disagreed and the predictions in the next section quantify that. I’ve demurred because my preferred metric [right direction-wrong track] is in territory that predicts relative success for the Rs. In addition, economic growth and job creation are excellent, and there is no major war.

The measures above could change, but if they stay where they are, the Democrats will make only modest gains in November. If the indicators change, so too will my predictions.

Predictions

New Prediction this Week

Election Predictions

Policy & Legislative Predictions

*NOTE: Remember that after being impeached by a Republican controlled House in 1998, not one Democratic Senator voted to remove Bill Clinton from office. It takes 67 votes and is more of a political process than a legal one. NO President has ever been impeached and removed. Richard Nixon resigned before the House and Senate could impeach and remove him from office.

Musings

The Tuchfarber Report is grounded by facts rather than advocacy or wishful thinking. But there are times when a little speculation is appropriate, which is why I periodically include this Musings section.

Roseanne as a Cultural Indicator

In the 1970s, “All in the Family” was an enormously successful and culturally important TV show. The main character, Archie Bunker, was a racist, homophobic, sexist curmudgeon who was constantly at war with his socially liberal son-in-law “Meathead”. The show was funny, the characters terrific, and the message clear…get rid of racism, homophobia, sexism and hate.

The 1960s and 70s were a time of American progress on social issues the likes of which the US and the world had never seen. The civil rights movement created legally equal rights for minorities and the feminist movement rapidly tore down the walls of discrimination against women.

That era was the first time the US had ever lived up to the equal rights promise of its founding documents…the Constitution and Declaration of Independence.

Last Tuesday there began a revival of the TV show “Roseanne.” It blew away all the audience size expectations with 18 million viewers. Roseanne Barr plays the lead. Both on the show and in real life she is a Trump supporter. She plays a white, working class female who likes Trump’s message and plans to Make-America-Great-Again.  She is typical of the millions of blue collar Americans who feel deserted by the Democratic Party and have deserted it in kind. The enormous irony is that this very group was the essential core of the Democratic base from the 1930s until the early 2000s.

The white working class is now solidly Republican. Trump’s emergence didn’t cause that shift. It was already in place when he declared his candidacy in June 2015. In fact, the move of the white working-class to the Rs is what got Trump nominated and elected in 2016.

Pay attention to how this show does and what its messages are. It “feels” like a cultural icon aborning that will help us discover who we are and where we are going. Perhaps so…perhaps not…but, take note.

Until next week…
Al Tuchfarber
Professor Emeritus of Political Science, University of Cincinnati

Al.Tuchfarber@gmail.com
Tuchfarber Political-Economics LLC, Inc.

Dr. Tuchfarber founded the Ohio Poll, one of the nation’s most accurate, while directing the social science Institute for Policy Research from 1975 to 2004. He also founded and directed the Institute for Health Policy from 1996 to 2004. He is an engaging and dynamic speaker and has published over 100 articles and papers about politics, society, and research methods.

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