The markets are waking up to the reality that President Trump is not going to accomplish much of anything, as the Wall Street Journal reports:
Markets are signaling caution after investors greeted President Donald Trump’s election with enthusiasm.
Bets on higher economic growth, inflation and interest rates—which became known as the “reflation trade”—have eased since the election. The yield on the 10-year Treasury note is lower than it was when Mr. Trump took office, including a decline Wednesday after the White House unveiled its tax proposal. The U.S. dollar has retreated from a 14-year high hit after the election.
Many popular postelection wagers took a hit last month after Republicans failed to repeal and replace the Affordable Care Act, which highlighted the difficulties they could face advancing new legislation even while holding the White House and both houses of Congress.
If one had any doubt, this week’s events — a half-baked tax proposal that would not pass one let alone two houses, another failed effort at Trumpcare, White House bluffs and retreats on the budget — should have disabused observers of the notion that Trump’s agenda would sail through Congress.
The Trumpcare effort was the quintessential “rearranging deck chairs on the Titanic.” For every Freedom Caucus member who figured he’d jump on the bandwagon (the opt-out for states who could choose to do away with the list of essential benefits), there was a moderate who jumped off. What did Ryan and the rest expect would happen when they made a bad bill even less attractive to the great majority of Americans?
Trump cannot manage to devise attractive legislation or get down in the weeds of negotiation, while House Speaker Paul Ryan (R-Wis.) seems willing to accommodate whatever group is currently rocking the boat, regardless of the likelihood of success. Neither Ryan nor Trump can lead a successful legislative effort. As a result, members of Congress figure there is little reason to stick their necks out for either one. “Members of Congress have watched with horror as Trump thrashed about in Washington with little predictability, guided by top aides with little experience in the trenches of government,” Time reports. “Staffers with decades of Hill experience find themselves sidelined by political neophytes who think barking orders can get Congress to act. More than once, White House officials have told Paul Ryan that his role as Speaker may be in jeopardy if he does not do more to help Trump.”
To a large degree, the GOP’s angst is to the country’s benefit. The national and world economies are slowly recovering from the 2008 financial meltdown. Unemployment is way down in the United States. If “do no harm” (or, as President Barack Obama would say, “Don’t do stupid stuff”) is the watchword, then gridlock and inaction may not be the worst thing. Not exiting from NAFTA, not pulling the rug out from millions of people who got coverage under Obamacare and not building a wall or harassing cities (for refusing to do the feds’ work on immigration enforcement) are certainly preferable to Trump “succeeding” on these issues. A tax plan that exacerbates the gap between rich and poor and starves the federal government of revenue so that it cannot make worthwhile investments in worker training, education, science and infrastructure would arguably be worse than the current situation. If they fail on the big, ambitious items, then small improvements in Obamacare or the tax code may be possible.
This is not to say we don’t have substantial problems or need competent leadership. However, this president and this Congress have not a clue how to proceed. They would potentially do much more harm than good. They are prisoners of extreme ideology, unrealistic expectations and their own incompetence.
Perhaps under another president, the center-right and center-left can make progress on key issues. For the remainder of Trump’s term, however, the best-case scenario would be no new wars or new nuclear powers and the status quo at home.