YOUGHAL, IRELAND — As expected, Bernie Sanders seems to be fading.
In order to save his campaign, he needs to differentiate himself from Elizabeth Warren, who is younger, more energetic, and has more or less the same idiotic ideas.
He’s doing it by going after the rich even more aggressively than Ms. Warren.
While Ms. Warren would hike taxes on the rich to 62%, Bernie would hit billionaires with a tax of 97.5%, leaving them to rifle through dumpsters for their rations.
In a moment, we’ll see how this ties into another American scapegoat: the Chinese.
The hatred of the rich is, however, somewhat understandable. Why? Because so many of them became incredibly wealthy by becoming cronies and gaming the political system. Most of their money was gained through theft, not production.
That is, they gained their wealth through Federal Reserve manipulations and politics, not by honest capitalism.
But Bernie Sanders, a millionaire, doesn’t see the difference. So he’s just making it clear he’s not one of them. And as if to suggest the same could not be said of his opponent, he called Ms. Warren “capitalist through her bones.”
We shudder and shake. A capitalist in our midst! And running for the highest office in the land.
Woe is us. A socialist would fit right in. A nationalist? No problem. A vegan? A fundamentalist? An environmentalist? A cross-dresser? A transgender child molester? The system could take almost anyone in stride.
But not a real capitalist. Oh, what a plague on Washington! A curse on the Capitol! Scorching heat and mildew throughout the D.C. metropolitan area.
A real capitalist would drain the swamp … and threaten the whole Deep State/phony-money shebang.
“I’m not (a capitalist),” Bernie reassured voters.
But Ms. Warren is not a capitalist either. And neither is Mr. Trump. Neither is willing to let open markets and win-win deals run free. Instead, they want a whip in their hands and capitalism in shackles.
They propose to guide it with numbskull monetary policies … and to direct its rewards where they want them to go. Which is to say, they want a government-managed economy where they dictate who gets what.
And that brings us to our subject for today — the China trade war …
Threats for Corn
Everyone in America seems to think that the Chinese cheat — they manipulate their currency, steal intellectual property and are too rough on their Muslim minorities.
But in a capitalist economy, companies and consumers can decide for themselves if they want to buy/invest/trade with China.
If counterparts — foreign or domestic — don’t do business the way you want, you have a simple choice: You take them as they are, or you don’t do business with them. You don’t make a federal case of it.
In capitalism, you do the best you can, without calling in the goons. But cometh the “great and unmatched wisdom” of the genius from Queens, and the shackles get tighter.
POTUS thinks he should decide who does business with whom … and on what terms.
His negotiators, for example, say they have forced the Chinese to agree to buy $40 billion of U.S. farm goods. (The Chinese have not confirmed.)
What? Are America’s farmers so uncompetitive that they can’t stand on their own two feet and bargain honestly? Do they need to make tariff threats to sell their corn?
This food purchase was said to be part of a Phase I deal. (The Chinese have not confirmed this yet, either.) But it allows The Donald to de-escalate his tariffs (more were due to go into effect Tuesday) … perhaps temporarily, perhaps permanently.
The Chinese must want to settle the trade war, too. Our own eyes and ears in China — Tom Dyson — reports seeing empty highways, empty trains, empty hotels, empty restaurants, empty apartment buildings and whole towns with very few people in them.
Most likely, China’s government-managed economy has invested far too much money on far too much infrastructure … and now owes $40 trillion.
It can keep up with the debt only by selling goods. And it doesn’t want any stinkin’ trade war getting in the way.
On the U.S. side, Mr. Trump has an election coming up. He wants to go into campaign mode with a roaring economy and a rising stock market. Anything less than that calls into question his genius … and gives an edge to Ms. Warren.
Mr. Trump, being no fool, knows he needs to close a deal with the Chinese. So, no matter what happens, he’ll come up with something. He’ll claim a great victory … with further negotiations, of course …
“I expect we’ll have a deal,” U.S. Treasury Secretary Steve Mnuchin said on CNBC. “We’ll do what we have to do …”
Here at the Diary, we expect so too.
The Trump team, desperate for a deal … any deal … will agree to a vague set of aspirations … and trade will return to where it was before the trade war began.
Investors will breathe a sigh of relief. Stocks will rally.
But the U.S. now has $25 trillion more debt than it did before the last crisis. No trade deal will stop the reckoning that awaits its economy … or its stock market …
• This article was originally published by Bonner & Partners. You can learn more about Bill and Bill Bonner’s Diary right here.