I’m So Bored With the USA: A Different Class

 

“I said, “Pretend you got no money”

And she just laughed and said, “Oh, you’re so funny”

 

 

As campaigning for the local elections and the Runcorn and Helsby byelection hots up, Farage and Reform are out in-force, and with good reason; a poll by More in Common found that Reform could win more seats than the other parties at a general election even if it has a slightly lower vote share.

 

The poll looking at constituency-level splits surveyed 16,000 people, and suggested:

 

· 180 seats / 23.7% of the vote for Reform

· 165 / 24.3% for the Tories

· 165 / 24.5% for Labour

· 67 / 13.3% for the Lib Dems

 

Farage has been talking-up chlorinated chicken, suggesting he will roll-over and take whatever trade deal the US cares to offer us. When asked how he would prevent British chicken farmers being undercut by cheap producers from the US, he said: “I want to promote British farming as being a high-end product. I think the growth of farmers’ markets, they are a much more discerning audience that wants to know where their meat comes from. I don’t think British farmers have anything to fear from this long term.”

It appears that Farage isn’t content with being just a poundshop Trump, he’s now a poundshop Marie Antoinette, with “Qu’ils mangent de la brioche” being replaced with “let them eat chlorinated chicken!

 

‘Farage isn’t content with being just a poundshop Trump, he’s now a poundshop Marie Antoinette’

 

But then Nigel is becoming a man for all seasons. In his desperation for votes he is now turning to the left, demanding the immediate nationalisation of the steel industry, and solidarity with trades unionists. As a longtime admirer of Margaret Thatcher she must be spinning in her grave.

Most amusingly he claimed to have a personal affinity with steelworkers because he used to be in the “metals business” himself. For those in doubt he was a trader at the London Metal Exchange. This is somewhat like Louis Ferla, the CEO of Cartier, claiming affinity with steelworkers, after all both work with metals.

Any redwallers foolish enough to swallow this old shtick should remember that, only recently, the old fraud voted against outlawing fire-and-rehire and Reform’s opposition to banning zero-hours contracts.

His bromance with Trump, who he rarely misses an opportunity to praise, throws doubts on his judgement. Interestingly, since Trump’s “Liberation Day” devastation of global trade Farage has largely been silent on the subject, although, when pushed, he was forced to admit that his buddy might have blundered just a little, excusing it as “too much too soon”.

But then, Nigel does seem to attract strange friends, previously he has buddied up with Vladimir Putin.

Voters should also heed the threat of Farage to the NHS which, could also feature heavily in a any US trade deal.

Like all populists, lift the bonnet and there is little to see, other than telling people what is wrong; the politics of grievance. As with Reforms predecessors, Ukip and the Brexit party, it is a vehicle for the angry to express their discontent with the quality of their lives and local areas, and to vent their animosity towards Tory and Labour parties that Reform’s leader is adept at painting as two failed faces of a dismal status quo.

 

‘a vehicle for the angry to express their discontent with the quality of their lives and local areas’

 

Policies are sketchy at best; promises that Reform mayors and councillors will implement a Musk-inspired “British form of Doge” to purge alleged inefficiencies and excesses in council spending, with diversity and equality programmes predictably topping the hitlist. This will achieve nothing other than creating more problems in the areas that Reform is targeting.

There is the promise of tax cuts, but no explanation as to how they will be funded. Perhaps, he will re-enact Liz of 49-days and go the unfunded route?

Not that any of this will matter to Reform voters, for them Farage is the equivalent of two-fingers to the establishment.

Success in the forthcoming elections won’t make him PM, but it could lead to a deeper existential angst in both the Conservatives Labour as this result would confirm neither have found an answer to the seething mass of grievances populism seek to exploit.

As this column has consistently pointed out, many of Labour’s problems are their own mistakes. Poor messaging, an overall air of despondency, and misguided policies.

The latest and, perhaps most damaging, are the £5bn of benefit cuts that many of their MPs are refusing to support.

One possible compromise is for ministers to publish their long-awaited child poverty strategy shortly before the key Commons votes, and in it offer additional money for poor parents of children under five; a proposal focused on the youngest children would cost less than the £3.6bn needed to scrap entirely the controversial two-child limit on benefit payments that cannot be scrapped in the short term.

There are, however, several dozen Labour MPs who, it is reported, will refuse to get involved in any such “trade off” involving children in poverty and the disabled.

Whilst it is clear that neither Tory or Labour has delivered Reform really aren’t the answer. Farage is a fraud, he may not be as dangerous as Trump, but he will deliver the UK to the US, and anyone taking a look across the pond should see what a disaster that would be.

Trump may have only been in-power for 100 days but his presidency has already failed and will only get worse.

 

‘his presidency has already failed and will only get worse’

 

His attempts at geopolitics have delivered total failure; both Ukraine and Gaza are worse off as his dealmaking skills have seen him negotiate himself from a position of strength into weakness.

He is thrashing around government agencies causing chaos. Last week he fired C.90% of the employees at the Consumer Financial Protection Bureau, (“CFPB”), which was created to protect consumers from the worst excesses of the finance sector.

To date, the agency has forced banks to repay or forgive at least $21 billion through enforcement, and saved consumers billions more through limiting banks’ ability to charge ridiculous fees. Success’s include protecting those with medical debt from harassment by debt collectors, and preventing payday lenders from using illegal and harassing debt-collection tactics

Whilst a court has moved to temporarily block these firings, ultimately, keeping the CFPB strong depends on political support and Congressional action.

Trump is continuing his spat with the universities, and is facing legal action from Harvard, with others expected to follow.

The issue is based on Trump wanting to control universities hiring, admissions and curriculum.

His latest stunt is seeking to revoking Harvard’s tax-exempt status. Linda McMahon, the education secretary, said she doesn’t know whether Harvard will lose its tax-exempt status but argued, “I certainly think, you know, in elitist schools, especially that have these incredibly large endowments, you know, we should probably have a look into that.”

This attack came hours after the Trump administration announced a $2.2bn freeze in federal funds to Harvard.

In response, R William Snyder, accounting and taxes professor at George Mason University’s Costello College of Business, told CNN, “To my knowledge, this is the first time an administration has tried something like this.”

It isn’t only Harvard legally challenging the administration, there is also the supreme court, who unanimously ordered Trump to facilitate the return of a legal US resident wrongly deported to a dangerous prison in El Salvador, without any criminal charges.

We can add to his list of failures, tariffs; especially to China who not only refused to back down, but also retaliated with huge tariffs of its own, plus a freeze on the export of rare-earth elements that the US’s high-tech and defence industries depend on.

 

‘US trade officials are preparing tariffs of up to 3,521% on imports of solar panels from four south-east Asian countries’

 

Having said that China might have got off lightly, as reports suggest that US trade officials are preparing tariffs of up to 3,521% on imports of solar panels from four south-east Asian countries, after an investigation begun a year ago when American manufacturers of solar panels accused Chinese companies of flooding the market with subsidised, cheap goods.

Products from Cambodia would face the highest tariffs, of 3,521%, because its companies did not cooperate with the US investigation, while products made in Malaysia by the Chinese manufacturer Jinko Solar face duties of just over 41%; rival Trina Solar’s products from Thailand will incur tariffs of 375%.

All of these policies are explicit, whereas freedom of speech is implicit, something we take for granted in democracy.

In Trump’s US there is still freedom of speech as long as it’s inline with his administrations approvals. This explains why VP Vance rebuked our PM for “infringements on free speech that … affect American technology companies and, by extension, American citizens”, a direct swipe at the Online Safety Act (“OSA”), which makes social media companies, websites and search engines responsible for “harmful content” published on their platforms.

A delegation from the US state department visited Ofcom, and raised the OSA in-line with the Trump administration’s mission “to affirm the US commitment to defending freedom of expression in Europe and around the world”. It appears that the PM will be told to by the US to dilute digital regulation in any trade talks with the US. It is also likely that our digital services tax, which aims to clamp down on international tech companies avoiding tax by hiding their profits offshore, would be included in negotiations.

It isn’t just the threats of tariffs, this is Trump creating an authoritarian state by radically circumventing allowable opinion, then accusing opponents of doing exactly that.

We finish with the US economy, although I doubt I can finish it as effectively as Trump.

 

‘We finish with the US economy, although I doubt I can finish it as effectively as Trump’

 

The dollar is at a three-year low, the S&P 500 has lost 8.99% in a month, and the yield on 10-yrs treasuries is up 40bps inside a month. Despite this, 74% of Trump voters are still confident that they made the right choice.

Whilst billionaire, such as the investor Bill Ackman, who backed Trump are screaming bloody murder, the majority of his supporters could care less about the stock market. The simple fact is that the top 10% of Americans hold 93% of all stocks. This is what happens when inequality reaches record levels: you get a group of people with nothing to lose, meaning they have little to regret, and will happily burn the whole system down.

As I wrote in “Darklands”, the traditional economic metrics such as GDP and the stockmarket are meaningless to the masses. What matters to them is unemployment, although that can be skewed by the “gig economy” and zero hours contracts, and inflation as rising prices impact most on those with the least.

It isn’t rocket science to say that Trump’s tariffs will be inflationary. A 20% tariff means consumers paying 20% more for the same goods.

What is more alarming is that Trump wants interest rates cuts, and to achieve this is trying to oust the Federal Reserve chair, Jerome Powell, who he said was ““always too late and wrong”. He continued saying “Powell’s termination cannot come fast enough”.

For his part, last week Powell said the US economy was well-positioned but added that Trump’s tariffs were likely to cause “at least a temporary rise in inflation. The inflationary effects could also be more persistent.”

He indicated that the prospect of sweeping tariffs on virtually every trade partner could put the Fed in the unenviable position of having to choose between tackling inflation and unemployment.

 

“I had to destroy the nation to save it”

 

This will impact the very people who form Trump’s voter base.

But, it also goes further. Trump wants a weak dollar to stimulate exports, the flipside is that it makes imports more expensive. Along with tariffs this is a lethal combination. Of you then factor in Trump removing Powell and cutting interest rates, inflation could run riot.

Were this to happen the dollar would further lose credibility as the global reserve currency. Also, the sell of in US Treasuries would continue increasing the cost of debt, in a country with a debt to GDP ratio of 123%.

Where does it end?

Well, after stage 1, frantic and uncoordinated action, we could see finger pointing when the actions fail. After that, we are back to a last-stand in the bunker where he will claim “I had to destroy the nation to save it.”

 

 

“Hail Mary, Virgin Mild Hear a virgin’s plea for this Rocks rigid and wild, shall be my prayer”

 

 

This week, we have two stories that run in parallel.

In the UK, we are seeing the continuing rise of Reform, with polling suggesting they could be the largest party.

Farage is running around being a man for all seasons with policies to match. Turning to the left with nationalisation, a new found affinity with steelworkers, and reaching out to those left behind by progressive politics and inequality.  

In the US, we have the real deal, Agent Orange, doing just that but delivering it with the zeal of a man on a mission. What is that mission? It appears to be slash and burn, rampant nationalism, totalitarianism, and repression of all and any opposition.  You can add to this a betrayal of the people who voted for him, and he and his cronies enrich themselves at their expense.

Sounds familiar, doesn’t it? It’s everything this column has warned against in the last 7-yrs. The politics of the 1930s.

I suspect that, as with his oppos, the end will be bad.

For the UK there are lessons to be learned.

Firstly, Farage and populism isn’t the answer.

Secondly, a trade deal with the US shouldn’t be hurried. The costs, chlorinated food, the NHS, and overt US control outweigh the benefits. There will always be enough wealthy people in the US who can afford Range Rovers!

Despite the madness of Trump, the news of  the death of Pope Francis is the headline. I chose not to feature it, I am not a religious person and therefore not qualified to comment. What I will say is that I know a good, well-intentioned person when I see one, and he was all of that and more.

Lyrically, we start with “Common People” by Pulp, dedicated to populists who pretend to like and represent working people, when they really despise them.  

We finish with “Ave Maria” by Franz Schubert. It’s not a hymn but it felt appropriate.

Enjoy!

Philip.

 

@coldwarsteve

 

 

 

 

 

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

 

Click on the link to see all Brexit Bulletins: