Who's toughest on the elites, Elizabeth Warren or Donald Trump? Look, I don't like talking politics, but if you want to know where the trade talks are going and how they could impact your portfolio, you need to know where this war against the elites is going, whose winning, and what it means for you.
We know that there's a burning controversy between Senator Warren and the super-wealthy, and I get that: As long as we don't start calling them oligarchs and calling for their heads, billionaires have been from the nation's inception, and are always going to be, fair game -- with certain flare-ups after panics and depressions and recessions causing divisions to boil over.
But I would argue that if you are trying to divine who is most fed up with the elites in this country, it might be Donald J. Trump -- and you just don't see it because it's all, to me at least, in code.
The other day, the President gave a speech at the Economic Club of New York and you saw a flash of electric elite criticism that showed a fault line within his own administration. The president talked about how he was lecturing his counterpart and thousands of others in Beijing when these trade issues surfaced about how unfair they have been. Then sensing the room, he started praising them for playing us brilliantly and that the real villains in the U.S-China trade imbalance were our previous presidents, both Republicans and Democrats, who gave in to our own elites in order to sell more goods in China, even if it meant selling out our own workers.
And that, there you are, is the reason why the trade talks are so hard to game -- we don't know if the president is going to side with what some say are the elites representatives in his own administration -- namely Steven Mnuchin and Larry Kudlow, the Treasury Secretary and the President's chief economic advisor -- or with the populists -- led by trade advisor Peter Navarro, with Robert Lighthizer a seemingly fellow traveler.
We don't know, because the president is using the doves as carrots and the hawks as sticks and, increasingly, I think he likes the hawks because the Chinese are entirely misreading the situation -- and yes, the Chinese do make mistakes. They are confusing resolve and hard bargaining -- their style -- with ideological cold warfare, the style of our hawks, both in the Democratic and Republican Party.
Let's bag the ornithology for a second. Mnuchin and Kudlow represent the old-style globalists -- people like Henry Kissinger, Steve Schwarzman and ex-Goldman Sachs (GS) leaders John Thornton and Hank Paulson, the latter the former Treasury Secretary, who want China to do more business with the United States. These men stand for an open China, one that is going to live up to its obligations from when it joined the World Trade Organization, to be a fair and free trader.
The anti-globalist, more pro-nationalists believe that these men represents elites who have sold out the American working person for years and have been willing to compromise our nation on the altar of what, literally, might be considered a cross of gold. I use that analogy because in some ways this election is a replay of the William McKinley versus William Jennings Bryan presidential election of 1896, when Bryan presented that fiery cross of gold speech.
Let's take it one step further, the new Bryanists don't want more trade. They want seven deadly sins reversed: no more stealing, no more intellectual property theft, no more forced technology transfers, banning of subsidized state-owned subsidiaries, the ceasing of currency manipulation, the stopping of computer hacking and the one that really shows the true colors, the shut down of poisonous fentanyl sales.
What's so extraordinary is that if you just throw in punishment for global warming, I believe that the anti-elitist advisors in the White House have more in common with Elizabeth Warren's rhetoric than with the globalists. Both Warren and the ideologues in the White House sound like Bryan because I think both believe that our nation has been sold out to the Chinese for more profits by the elites.
Warren doesn't talk about the seven deadly sins that I outline, the true cross of gold, but she would be a formidable enemy to the Chinese, hence why I believe that this may be the last chance for the Chinese to strike a deal before both parties go into full Cross of Gold mode.
Who wins in this White House, the McKinleyites or the Bryanists? It is pretty simple. Unless the Chinese stop trying to negotiate a good price and instead just start buying things -- grains, planes -- who cares? The Bryanists do, and we could take tariffs to 30% on everything in a month's time. Will the Chinese continue to miscalculate and think this is really about trade?
I bet they will.
The Chinese would do well to heed the thundering words of Bryan: "You should not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold."
In 1896, Bryan lost. Unless the Chinese buy goods and do so now, proving to Trump that a globalist strategy can still work, there will be no deals, just higher tariffs no matter who wins the White House one year from now.
