PARIS – We spend a lot of time overseas – mostly in Europe and South America.
This is both good and bad.
On the good side, the distance helps give us more – or fresh – perspective. We see how others live. We get to watch events on the global stage… while keeping an eye on the circus in America, too.
But we risk getting… “out of touch.”
Yesterday, we caught up.
American Crack Up
“I spent much of my life in Louisiana,” began a financial analyst we met in Paris. “People there have a very different way of looking at things.”
Our friend was about to explain why he thought America would crack apart in the years ahead.
We pass on his comments without prejudice or comment. But we preface them as follows:
In 1947, India and Pakistan left behind British rule and separated. Though they had lived together more or less peacefully for hundreds of years, the prospect of self-government seemed to inflame the differences between Muslims and Hindus.
In the partition that resulted, some 14 million people were displaced, with as many as 2 million killed in violent confrontations.
“What was that all about?” Westerners wondered.
“There are some issues you just can’t compromise on,” continued our friend.
He had left Louisiana many years ago, and lived in New York and Los Angeles, as well as in many places overseas.
But you could still hear traces of the bayous in his speech.
Great Divider
“I mean, Trump is a great divider. People hate him or they love him. It seems to be mostly a matter of class.
“If you went to college and live in a large metropolitan area – or on the coasts – you probably find him repulsive.
“You don’t really know whether his policies will do any good or not. You don’t know whether they are any better than those of Obama or Hillary. You don’t even know what the policies actually are… or how they are implemented.
“All you have to go on is what you see on TV, tweets from the White House, and a few newspaper articles by people who are writing for you…
“And you’re going to hate Trump because you think he stands for values that you think are stupid or evil.
“In practice, he’s done three real things: he’s cut taxes, increased military spending, and begun a war on trade. If you’re an educated person, you’re probably going to think these are pretty dumb things.
“But they’re not that dumb. And if someone else had done them – someone who spoke with a better accent and explained calmly and rationally what he was doing – they wouldn’t have been that terrible.
“Nobody knows what tax rates should be… or military spending… or how trade deals should be negotiated.
“But Trump is a divider. He’s a fighter. He has his people: his fans, his base, his aides, his straight men, and his cronies. Everybody else is an enemy.
“So even when the substance of what he is doing is not that outrageous, about half the country can’t stand him.
Non-Negotiable
“And it gets worse when the issues are “non-negotiable.” I think abortion is one of those issues.
“If Trump gets the Supreme Court to overturn Roe v. Wade… a lot of people – those people on the coasts who can’t stand Trump anyway – are going to revolt.
“Again, it’s not an economic or a practical issue. With new drugs, Roe v. Wade probably doesn’t matter so much. In today’s world, women don’t have to have babies unless they want to have them. But it’s a cultural, class thing.
“If you’re an Episcopalian, you’re not likely to be a Trump supporter. If you graduated from college and earn more than $100,000 a year, you’re likely to think Trump is an embarrassment. And if you’ve lived overseas… the odds are extremely high that you’re going to detest him.
“I’ve been at parties in Paris where people – Americans – have come up to me and immediately started ranting and raving about how awful Trump is. These were people I hadn’t met before. But they were so sure I was against Trump, they just opened up.
“I tell them I think Trump may not be so bad, and they look at me like I’m the Devil himself. They’ve never met anyone who wasn’t anti-Trump.
“But if you go to the Southern Baptists – who earn less than $100,000 a year… who live in Abilene or Fort Wayne… who never went to college and don’t have passports – you’ll get an entirely different attitude. He’s their hero.
“They practically worship him. He can do no wrong. And when he does something they don’t understand, they think he has some clever plan… some trick up his sleeve. They see him as their savior. And they regard any attacks on him as fake news.
“It’s class and culture. Two different attitudes. And no middle ground. No room for mutual respect or compromise. They are beyond logic. Beyond reason. Like abortion. Or slavery.
California Confrontation
“And California is setting the stage for a whole new level of confrontation. In November, voters will decide if they want to break the state into three new states.
“In itself, I doubt this will mean much. Most likely, the bill will be defeated. The measure on the ballot says Congress would have to approve it, and there’s no way that would ever happen.
“But that won’t be the end of it. California has nearly 40 million people. It’s the world’s fifth-largest economy. It’s not going to be willing to sit in the U.S. Senate as an equal alongside Wyoming and Delaware – which, between them, have less than two million people.
“California has no voice in the United Nations or other international bodies, even though it is larger and more powerful than all but China, Germany, Japan, and the U.S. itself. It has no army of its own, and no way to protect itself if it were invaded by the U.S.
“But like Brexit, I don’t think this Californian independence movement will go away. After November, the cat will be out of the bag. It won’t be easy to put it back in.
“Californian voters and politicians are not going to let themselves be pushed around by a big-mouth politician from Queens that they despise.
“And just wait until the economy goes sour… and the debts come due… and prices rise. There’s going to be a lot of unhappiness.
“And then, Donald Trump will still be the hero of the great unwashed… the untutored, untraveled masses in Flyover Country.
“But others are going to hold him responsible for their troubles. And the country is going to break apart.”
Regards,
Bill
Category: Market updates