What's Really Going On with Trump and Ford

Earlier this week, Ford announced new investment in Michigan instead of Mexico, and that set off a storm of speculation as to why they might have done it.  Most of that speculation focuses on two possible answers, with some arguing that Ford acted in fear of Trumpian tariffs against imports and others imagining Ford engaging in billion-dollar political enthusiasms over America's future under Trump.  Both of these views are naive, over-simplified, and largely wrong.

The first reality is that America is not governed by its president; on most issues, the president works for Congress, with the Constitution giving the president the power to act independently only when the limitations of communications as understood by the founders required it.  Thus, Obama's continual abuse of office was possible only because Republicans in Congress lacked the courage to impeach and remove him in the face of the media's endless campaign against them and the willingness of Democrats in the Congress and the judiciary to elevate personal financial and political considerations above duty, honor, and the responsibilities they undertook in swearing to uphold the Constitution and the law.

First and most importantly, therefore, Ford's political bet is not on Trump, but on Congress – although they are counting on Trump's presence in the White House to help congressional Republicans keep their heads on straight and stand against the tidal wave of liberal hatred coming their way.  Thus, Trump has not tried to appoint long-term political loyalists like Palin, Giuliani, and Christie to his administration in part because this leaves them free to act as his political support troops, traveling around the country, absorbing media attacks, and stiffening Republican spines.

The second reality is that the North American Free Trade Agreement is, like immigration law, difficult to change and reasonably functional as is, but incompletely implemented.  Basically, Trump can place short-term barriers in the way of some imports from Mexico and Canada, but this strategy is a long-term loser because the treaty gives importers (and their suppliers) rights of appeal that will result in expensive reversals.  A better strategy, therefore, is fair enforcement of treaty terms starting with Canada's marketing boards and Mexico's failure to maintain agreed labor standards.  That will obviously result in trade-offs as new ways are found for the three countries to rub along together.  On the Canadian side, that probably means that western Canadian exports will face more barriers while the CBC and the marketing boards (including the CRTC) get formal protections.  On the Mexican side, Mexico will protect its access to American markets by deploying troops and police to the border as a kind of human wall filtering out migrants to the point that Trump's physical wall need be little more than symbolic, while the real American action takes place through increased law enforcement in the financial, immigration, employment, and welfare systems.

The third reality is that companies like Ford have global operations but largely American shareholders and American management.  Thus, tax changes incident to the 2007 Pelosi budget (mainly to do with esoteric-seeming issues like the treatment of losses from shorting a competitor's stock or the taxation of foreign earnings) have combined with the usual short-term pressures produced by the quarterly reporting cycle to make off-shoring practically mandatory from a financial management perspective despite being against the long-term interests of the company, its shareholders, and the country.  Thus, Ford's bet on Congress is really a bet on tax reform, on the repeal of Dodd-Frank, and on the judicial re-assertion of the rights of secured creditors in both debt and equity markets.

Whether or not Ford, and the country, will win on this bet is an open question – but the billionaire socialists now in control of the Democratic Party are being extraordinarily helpful on this simply by refusing to lessen their grip on the party.  Instead of recognizing their repudiation by Americans and letting moderates nurse the party back to health and sanity, they're betting that people like Warren, Holder, and Obama can give them control of Congress in 2018 – and that can't happen while they're in control.  The reason it can't happen is because Clinton, like Obama, perfectly reflected their values and ideas, but she lost where Obama won because people wanted to believe what he said and the media helped them ignore what he did, while in Clinton's case, new media helped people believe what she did and ignore what she said.

Basically, the Democrats' candidate lost this time because she isn't as good a liar as Obama.  And without significant GOPe help, their candidate will lose next time, no matter who it is or what office is at stake, because enough voters have learned to distinguish actions from words to reward companies like Ford, and people like Trump, for nothing more than practicing what they preach.

Earlier this week, Ford announced new investment in Michigan instead of Mexico, and that set off a storm of speculation as to why they might have done it.  Most of that speculation focuses on two possible answers, with some arguing that Ford acted in fear of Trumpian tariffs against imports and others imagining Ford engaging in billion-dollar political enthusiasms over America's future under Trump.  Both of these views are naive, over-simplified, and largely wrong.

The first reality is that America is not governed by its president; on most issues, the president works for Congress, with the Constitution giving the president the power to act independently only when the limitations of communications as understood by the founders required it.  Thus, Obama's continual abuse of office was possible only because Republicans in Congress lacked the courage to impeach and remove him in the face of the media's endless campaign against them and the willingness of Democrats in the Congress and the judiciary to elevate personal financial and political considerations above duty, honor, and the responsibilities they undertook in swearing to uphold the Constitution and the law.

First and most importantly, therefore, Ford's political bet is not on Trump, but on Congress – although they are counting on Trump's presence in the White House to help congressional Republicans keep their heads on straight and stand against the tidal wave of liberal hatred coming their way.  Thus, Trump has not tried to appoint long-term political loyalists like Palin, Giuliani, and Christie to his administration in part because this leaves them free to act as his political support troops, traveling around the country, absorbing media attacks, and stiffening Republican spines.

The second reality is that the North American Free Trade Agreement is, like immigration law, difficult to change and reasonably functional as is, but incompletely implemented.  Basically, Trump can place short-term barriers in the way of some imports from Mexico and Canada, but this strategy is a long-term loser because the treaty gives importers (and their suppliers) rights of appeal that will result in expensive reversals.  A better strategy, therefore, is fair enforcement of treaty terms starting with Canada's marketing boards and Mexico's failure to maintain agreed labor standards.  That will obviously result in trade-offs as new ways are found for the three countries to rub along together.  On the Canadian side, that probably means that western Canadian exports will face more barriers while the CBC and the marketing boards (including the CRTC) get formal protections.  On the Mexican side, Mexico will protect its access to American markets by deploying troops and police to the border as a kind of human wall filtering out migrants to the point that Trump's physical wall need be little more than symbolic, while the real American action takes place through increased law enforcement in the financial, immigration, employment, and welfare systems.

The third reality is that companies like Ford have global operations but largely American shareholders and American management.  Thus, tax changes incident to the 2007 Pelosi budget (mainly to do with esoteric-seeming issues like the treatment of losses from shorting a competitor's stock or the taxation of foreign earnings) have combined with the usual short-term pressures produced by the quarterly reporting cycle to make off-shoring practically mandatory from a financial management perspective despite being against the long-term interests of the company, its shareholders, and the country.  Thus, Ford's bet on Congress is really a bet on tax reform, on the repeal of Dodd-Frank, and on the judicial re-assertion of the rights of secured creditors in both debt and equity markets.

Whether or not Ford, and the country, will win on this bet is an open question – but the billionaire socialists now in control of the Democratic Party are being extraordinarily helpful on this simply by refusing to lessen their grip on the party.  Instead of recognizing their repudiation by Americans and letting moderates nurse the party back to health and sanity, they're betting that people like Warren, Holder, and Obama can give them control of Congress in 2018 – and that can't happen while they're in control.  The reason it can't happen is because Clinton, like Obama, perfectly reflected their values and ideas, but she lost where Obama won because people wanted to believe what he said and the media helped them ignore what he did, while in Clinton's case, new media helped people believe what she did and ignore what she said.

Basically, the Democrats' candidate lost this time because she isn't as good a liar as Obama.  And without significant GOPe help, their candidate will lose next time, no matter who it is or what office is at stake, because enough voters have learned to distinguish actions from words to reward companies like Ford, and people like Trump, for nothing more than practicing what they preach.

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