Let’s talk “Trump derangement syndrome.” Not the syndrome that causes “the libs” and others to go crazy, I mean the syndrome that makes White House officials spout nonsense about administration policies. Consider the views expressed by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick on “Meet the Press.”
Bessent, whose credentials include running a hedge fund that lost more than 80% of its assets under management from 2017 to 2023, told viewers that the recent stock market decline was a good thing because “what’s not healthy is straight up, that you get these euphoric markets. That’s how you get a financial crisis. It would have been much healthier if someone had put the brakes on in ’06, ’07. We wouldn’t have had the problems in ’08.” Really? Euphoric stock market returns of 5% in 2005 and 16% in 2006 caused the idiotic mortgage lending that led to the 2008 real estate meltdown? The last time a president took down a euphoric market with the threat and imposition of tariffs was — let me think — Herbert Hoover in 1929.
The administration is “putting the policies in place that will make the affordability crisis go down, inflation moderate.” Actually, pre-Trump, inflation had already moderated to about 3% per year. If that moderation didn’t end the affordability crisis, slowing the rate to 2% won’t end the crisis, either.
“I can predict that we are putting in place robust policies that will be durable,” Bessent said. So far, these robust policies self-destruct as fast as a taped “Mission: Impossible” message. Even if they manage to survive more than five seconds, executive orders can be revoked any time for any reason by any president.
Meanwhile, Secretary Lutnick, the billionaire ex-chairman of the investment firm Cantor Fitzgerald, said that Donald Trump “is a deal maker, the greatest deal maker in the world.” Thank goodness for that. Otherwise, Trump might have filed for bankruptcy more than six times.
“Donald Trump is going to try to balance the budget,” Lutnick remarked. Right. By cutting taxes $5 trillion over the next 10 years including exempting tips, overtime and Social Security income from taxation.
Commenting on the benefits of forcing India and other countries to reduce tariffs on U.S. farm products, Lutnick offered this analysis: “As our farmers can sell more and more overseas, you’re gonna see the price of food in America come down. It’s a volume thing.” Huh? If U.S. farmers send a greater volume of their crop overseas, won’t that reduce supplies in the U.S.? Won’t fewer domestic supplies cause prices to go up? Or has the law of supply and demand been revoked by executive order?
“Some products that are made foreign might be more expensive, but American products will get cheaper,” said Lutnick. Help me, Rhonda. Weren’t we promised that foreigners would pay all the costs of the tariffs? If tariffs do raise the price of imports, how does that make goods produced in America cost less? When Trump 1.0 imposed tariffs on imported washing machines, domestic manufacturers raised prices.
So here they come America. Tariffs that raise the price of imports but ease the affordability crisis. Massive exports of American farm products that reduce food prices at home. Five trillion dollars of tax cuts that balance the budget. Outcomes that could only be generated by the greatest deal maker in the world and his acolytes.
Jeffrey Scharf welcomes your comments. Contact him at jeffreyrscharf@gmail.com.