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Trump-Kim Summit: So Far – So Good, But the Proof is in the Pudding; Big Winners and Losers in Inspector General’s Report; Trade War Escalated by Trump

Al Tuchfarber

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Al

THE TUCHFARBER REPORT

Accurate Facts, Analysis, and Forecasts

In-Brief

  1. The Trump-Kim summit accomplished about all that could be expected, but the heavy lifting lies ahead and will take several years. Success is by no means guaranteed, but the summit itself is progress compared to the war that seemed likely just months ago.
  2. The DOJ Inspector General’s report on the way the DOJ and FBI handled the Clinton email case creates many big losers and some winners.
  3. The trade war of the US and Trump against the world heats up.
  4. No Democratic blue tidal way is suggested by the primaries so far.
  5. PREDICTION: The Democrats will gain 5 to 15 US House seats this fall, almost all in coastal, metropolitan districts. They will not take control from the Republicans.
  6. PREDICTION: The Republicans will gain 4 to 7 US Senate seats, almost all in “heartland” states. They will add to their current razor-thin majority.

In-Depth

What’s Important

The Trump-Kim Summit in Perspective

No one should let their hopes or fears about the Trump-Kim summit get out-of-control. The summit may or may not produce long-term positive results. It is neither the first step to peace, nor the last. This is a process that is likely to take years.

Just six months ago, war on the Korean peninsula appeared imminent… perhaps even a nuclear war. Trump and Kim were lobbing childish, verbal grenades at each other.

A week ago, Kim agreed to a commitment to denuclearize N Korea and the entire Korean peninsula. That by itself is vital but there is also evidence he is serious about doing it.

Authoritarian regimes like that of the thug Kim often keep their own people in the dark when they give up something of consequence in negotiations. Kim did NOT do that in this case. The government-controlled media in the North informed the people about the summit’s success and the plan to denuclearize. That is a key step in the process of selling the ultimate deal to the N Korean people, its military, and its aristocratic elite.

There is so much garbage out there in the US mainstream media and among partisan “experts” and “the -sky-is-falling” analysts. Let’s see where things go. The process will take years, even if it is widely successful. For at least a while, we have stepped back from the abyss.

AND, DON’T FORGET… Kim Jong-un has just two options. The first option is to completely de-nuclearize the North and the entire peninsula. If that happens Kim probably stays alive, keeps his luxuries, and the family dynasty survives. The second option is the Libyan option…Kim ends up dead or in prison for the rest of his life.

China, N Korea’s military, or its elites could overthrow Kim and destroy the current momentum, but all those eventualities have low probabilities of occurring.

Stay tuned…

Trump Escalates the Trade War

As you readers know, I try to put things into perspective in this blog. The trade war launched, and now escalated by Trump, begs such an approach.

A starting point on establishing appropriate perspective is to recognize something a smart friend taught me. There are always trade wars going on between countries. Nations are always creating barriers to the goods and services of others. Predatory trade practices are endemic in the global system. They include quotas, unfair investment rules, red tape, artificial customs slow-downs, Intellectual Property [IP] piracy, etc.

China, in particular, has gamed the international trading rules and gone far beyond fair-play with its predatory trade practices. They have cheated, stolen IP through hacking, required technological transfer for access to their market so as to steal those techniques, and done many other things that are fraudulent, rule-breaking, or unfair in various ways.

China is the #1 target for Trump’s escalation of the trade wars, but so too are almost all the US’s major trading partners.

Have no doubt that Trump and his team have substantially escalated the world’s trade wars in a purposeful way. But, does their approach make sense and is it likely to produce positive results?

The escalation is part of the America First strategy. That strategy is simple in concept but gets very complex and difficult during implementation and execution.

The concept comes down to… ALWAYS PUT THE WELL-BEING OF AMERICAN CITIZENS FIRST. That has not always been the main goal of past Democratic or Republican administrations. They were often playing a longer-term game with distant and complicated strategic goals. And, they were willing to sacrifice some jobs in American to achieve those goals.

Such policies have created a populist revolt in the US and in many other countries.

As a populist, Trump has adopted the principal… America and American Workers First.

It is within this context that the Trump administration has escalated the globe’s trade wars. We are not yet in a full-scale trade war like that of the 1930s, but world nations could head there with tragic results.

As I wrote recently, the most troublesome aspect of Trump’s trade actions is their lack of coherence…a clear, comprehensive set of goals or a plan. The actions are often ad hoc, inconsistent, and opaque. Another substantial weakness of the Trump approach is an emphasis on the size of the trade deficit. Rather than that as the major goal, the emphasis should be on the protection of IP and an end to the various predatory policies of others. The US will have to modify some of its policies to achieve that end.

China, Europe, Canada, and others are retaliating in-kind. They too seem to have no coherent strategy except tit for tat.

Trade wars have winners and losers. Some US industries, businesses, and individuals are going to be damaged badly. They are already screaming, as they should. Trump is taking the risk that he can reset the global trade structure with his actions. That is a dubious assumption.

In the short-term, things are going to be ugly, sloppy, and destructive. For better or worse, the Trump team is willing to accept that.

Nevertheless, I predict that two years from now there will be no major worldwide trade war underway. Trump’s negotiating style is to lob in a flash-bang grenade in order to get everyone’s attention…but, then negotiate a deal ultimately deemed acceptable by almost all. Expect a great deal of maneuvering by all the parties, but a series of deals between the various players and the US.

We’ll all see if Trump can pull this off…

Long-term

Longer-Term Impacts of DOJ Inspector General’s Report

Let’s not get deep into the weeds on the DOJ Inspector General’s report, that of Michael Horowitz. The details, in the form of an Executive Summary and the full report are readily available should you wish to read them.

Rather than getting lost in the details, let’s focus on the winners and losers, as well as the findings that will make a difference as the country moves forward.

Losers

  1. James Comey, former Director of the FBI—Comey was described as insubordinate for not heeding the orders of Loretta Lynch and other senior officials at the DOJ. He was also cited for repeatedly failing to follow the FBI & DOJ rules and procedures. He was arrogant, assigning to himself, powers and responsibilities he did not have. Comey and the FBI have no prosecutorial powers, but he declared on national TV that Hillary Clinton should not be prosecuted for her clear violation of laws and rules against putting classified official documents on private computers and then destroying the evidence. Comey presents himself as better than the rest of us. He is not and the IG’s report documents that.
  2. FBI & DOJ — These two important institutions have been shown to have had many of their senior officials engaging in political corruption and other illegalities. McCabe, Strzok, Page, and many others at the leadership level were severely biased against the Trump campaign and in favor of the Clinton campaign. Their own words and deeds demonstrate that. The facts in the Horowitz report demonstrate the ease with which federal institutions can be corrupted and manipulated by political partisans. This cannot be allowed to happen again in this country. More reports, as well as numerous Congressional investigations, are still to come over the next year or longer. Expect organizational and legal procedural changes at both the FBI and DOJ.
  3. Special Counsel, Robert Mueller and his Team—The stature, objectivity, and consequence of Mueller and his team have been severely diminished. Many of the discredited senior FBI and DOJ officials were originally on Mueller’s team. That demonstrates his failings and poor judgment. He did dismiss them, but ended up with essentially all his senior prosecutors, other than himself, being committed, active Democrats. Worse for his prosecution of senior officials in the Trump campaign, including Trump himself, Comey’s severe failings and misdeeds provide concrete evidence why Trump should have fired him even earlier than he did. There goes most of the obstruction-of-justice case against Trump. Directly by the content of the report, and indirectly because of secondary and tertiary consequences of it, Mueller’s credibility and standing are diminished.

Mixed Reviews

  1. Michael Horowitz deserves the nation’s thanks for providing a comprehensive report about the corruption in the upper reaches of the Obama era FBI & DOJ. He did a good prosecutorial job and is undoubtedly hard at work on his next blockbuster report that will look at potential abuses of the rules by the FBI, DOJ, and other federal officials in getting the FISA courts to allow the Trump-Russia collusion investigation to begin. Horowitz does need to be faulted for his abuse of logic and the English language in saying that there was not clear anti-Trump, pro-Clinton political bias in official decisions made by senior DOJ and FBI officials. McCabe, Strzok, Page and others repeatedly expressed their hatred of Trump and acted against him in their official capacities. Logic and language clearly requires those facts to be called “bias.”

Winners

  1. The American People and System: Because of this report, our political system and commitment to Constitutional rights for all are likely to be strengthened.
  2. President Trump: Comey has been discredited and clearly his firing was justified in many ways. That makes any obstruction-of-justice case against Trump much more difficult. It was tenuous to start with and is now substantially weaker. The demonstrated contempt in the FBI and DOJ for Trump, as well as their repeated violations of their own rules make any case against Trump much more difficult to justify or prove. The “cops” were demonstrably corrupt. Mueller is greatly weakened.

We had many other winners and losers, but few that rise to long-term importance.

IG Horowitz is now actively working on how the Obama administration, not just the DOJ and FBI, obtained the FISA warrants that started the FBI investigation of the Trump campaign. That report too is likely to be a blockbuster.

And, don’t forget that Congress has innumerable investigations underway that will continue through the November elections and well beyond.

I’ve used the drip… drip… drip metaphor before. It continues to be accurate.

Elections

What the June 12 Primaries Tell Us

Seven of the 10 largest states have conducted their primaries so far. There is no indication that a Democratic Blue Tidal Wave is developing. It also does not look like the Republicans will escape damage in CA, PA, and other key states.

On June 12, four states held primaries… VA, SC, NV, and ND.

The Democratic civil war rages between the establishment wing and the progressive wing, with both nominating some of their candidates after vigorous battles.

The biggest shock from the June 12 primaries was “Never-Trumper” Mark Sanford being defeated by a strongly pro-Trump candidate in the deeply red SC-01 district. This has added to the cry that Trump is permanently changing the Republican Party and is in-control of it now. The latter is true, but the former is not. I’ll explain that distinction in future weeks.

Neither party has yet to nominate a sure-loser for a nationally important major office.

Polls and Media

Poll Accuracy Now

Take almost all the November election polls now being reported by public pollsters with a grain of salt. The private polls for candidates and parties are more accurate at this point, but any reporting about them is likely to include a great deal of “spin” that favors the candidate or party involved.

About one-half of the registered voters [RVs] the public pollsters are now interviewing and reporting on will NOT vote in the November elections. Roughly 75-80% of US adults are eligible to vote and are registered to do so.

But, only about one-half of them actually turn out and vote. Many of the results of the 2018 midterm elections will be determined by which party gets their vote out. It is too early to say which party will do better at doing that in November.

Stay tuned…

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 relevant then. So, ignore it and lower your blood pressure.

China Watch

China Economic Slowdown

China’s economic reports for May were quite weak. Is this the start of a trend caused by the country’s debt load finally weighing it down, or is it a blip?

We’ll see…

Predictive Political & Economic Measures

2018 Election Prediction Summary

Below are several election and policy predictions that I present each week and change if my indicators change. Speaking only to the 2018 election predictions, my current evaluation is:

  1. The Republicans will lose 5 to 15 net US House seats but maintain a small majority.
  2. The Democrats will lose 4 to 7 US Senate seats with the Republicans adding to their current razor-thin 51-49 majority.

POLITICAL MEASURES

  1. Right Direction-Wrong Track— “Wrong Track” is now at 52%, down 3% from last week. 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.]
  2. Generic Congressional Ballot – The polls I’m averaging are at 45% D and 38% R, the D lead down 1% from last week. [Because D voters are so concentrated in urban cores, Democrats need to be ahead 4 to 6% on this measure to tie the Rs for the 435 US House seats spread across urban, suburban, small town, and rural districts.] Like other polling results, the generic ballot polling now is based on twice the turn out that will actually occur. Only right before the election will public pollsters really tighten their screens to try to get to the smaller subset of people that will actually vote. Until then, this measure is useful, but flawed.
  3. Presidential Approval — Trump’s approval rating is 45%, up 2% over the week.

ECONOMIC MEASURES

  1. U-3 official unemployment rate — The current level is 3.8%, an 18-year low. Low or falling levels of this measure are a positive for the “in” party. It is low and falling now, down from 4.1% a year ago.
  2. U-6 unemployment rate [broadest measure, including under-employment] — The current level is 7.6%. This is a historically low level and down from 8.1% a year ago.
  3. GDP GROWTH — Growth last quarter was 2.2% which is significantly higher than the average growth over the last eight years. Forecasts for the current quarter suggest growth over 3%, perhaps over 4%.

WAR

  1. The jobs and war issues 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. Neither is the case now.

Predictions

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.

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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