Trump's Trade War Deepens Farmers' Financial Plight

In 2016 many American farmers succumbed to Donald Trump's racist messaging and voted for a bombastic con-man who had bankrupted numerous companies, lost millions of dollars for others, and left a trail of unpaid contractors.  Now, Trump's trade war with China is pushing many of these same farmers towards their own bankruptcy filings.  Divine justice?  Perhaps, yet some surveys continue to show strong majorities of farmers putting their support for Trump's racist and xenophobic policies ahead of their own financial well being.  It's a case of the GOP's long ability to use race and other forms of bigotry to induce individuals to vote against their own interests on steroids.   Do I wish these folks well?  Not really and perhaps if the trade war with China continues they will reap the economic catastrophe they deserve.  A piece in the New York Times looks at the deepening financial plight in the heartland.  Here are excerpts:

American farmers have become collateral damage in a trade war that Mr. Trump began to help manufacturers and other companies that he believes have been hurt by China’s “unfair” trade practices.

More than a year into the trade dispute, sales of American soybeans, pork, wheat and other agricultural products to China have dried up as Beijing retaliates against Mr. Trump’s tariffs on Chinese imports. Lucrative contracts that farmers long relied on for a significant source of income have evaporated, with Chinese buyers looking to other nations like Brazil and Canada to get the commodities they need. Farm bankruptcy filings in the year through June were up 13 percent from 2018 and loan delinquency rates are on the rise, according to the American Farm Bureau.

The predicament of farmers is becoming a political problem for Mr. Trump as he heads into an election year. For months, farmers have remained resolute, continuing to pledge support to [Trump] a president who says his trade policies will help the agricultural industry win in the end. While there are few signs of an imminent blue wave in farm country, a growing number of farmers say they are losing patience with [Trump's] the president’s approach and are suggesting it will not take much to lose their vote as well.

Mr. Trump, who regularly brags about an economic boom despite signs of a slowdown, has in some cases made matters worse.

We’re not starting to do great again,” Brian Thalmann, the president of the Minnesota Corn Growers Association, told Mr. Perdue at the event. “Things are going downhill and downhill quickly.”

On Monday, after a 72-hour period during which Mr. Trump twice escalated his trade war with China, Mr. Thalmann said he could no longer support [Trump] the president as he did in 2016.

Losing the world’s most populous country as an export market has been a major blow to the agriculture industry. Total American agricultural exports to China were $24 billion in 2014 and fell to $9.1 billion last year, according to the American Farm Bureau. Exports of farm products to China fell by $1.3 billion in the first half of the year, the agriculture group said this month.

A report from the Agriculture Department this month found that Canadian wheat exports to China have “rocketed” this year, while exports from the United States have plunged.

The administration has tried to mollify farmers by rolling out two financial aid packages totaling $28 billion. . . . But as the trade fight gets uglier, farmers are beginning to panic. Last week, Mr. Trump said he would increase tariffs on $250 billion worth of Chinese imports to 30 percent and impose a 15 percent tax on another $300 billion worth later this year. China has already said it will no longer buy American agricultural products and announced on Friday that it would raise tariffs on $75 billion of exports from America.

The trade conflict’s toll on farmers is spreading to the manufacturers that serve them. Deere & Company, the maker of agricultural equipment, said this month that it was cutting its profit forecast for the second time this year. The company’s chief executive said farmers were delaying purchases because of concerns about access to export markets.

Mr. Trump is also trying to appease corn farmers who complain that an Environmental Protection Agency decision this month will hamper ethanol production. Farmers say the agency’s decision to exempt small oil refineries from a requirement to blend corn-based ethanol into gasoline has led to a drop in demand for the fuel.

At Minnesota’s Farmfest, it was clear that Mr. Perdue’s Southern charm could go only so far. His answers to questions about how the trade war with China would end were curt, and his quip about whining farmers left some with a sour taste.

But many farmers continue support Mr. Trump and express hope that [Trump] the president knows what he is doing in his dealings with China. A July survey from Farm Journal found that 79 percent of 1,100 farmers still back Mr. Trump despite the lack of progress in negotiations with China. And Mr. Perdue largely remains an effective emissary, with the industry still hoping Mr. Trump can pull off the kind of trade deal he has been promising.

Putting one's hope in a liar and con man doesn't strike me as a smart thing to do, yet Trump's continued calls to white nationalism seem to drown out all common sense in some circles. 

Trump's Trade War Leaves Mid-West Farmers Reeling

The unkind part of me struggles to have much sympathy for Mid_West farmers who helped put Trump in the White House as they watch their führer pushing trade tariff policies that are wreaking havoc on their financial survival. They are, after all reaping what they sowed, motivated by racism and a war against modernity itself. The kinder side of me, feels sympathy for the children and youth who are suffering as a result of their parents' bigotry and overall idiocy.  Frighteningly, rather than admit his tariffs have been a failure, Trump wants to give a bailout to farmers and shift the costs of his failure to the rest of the American taxpayers.  One can only hope that the Democrat controlled House of Representatives rejects any such handout to farmers and that they are left to live with the consequences of their voting for an unfit candidate.  Actions do need to have consequences. NBC News looks at the growing plight of Trump supporting farmers.  Here are article highlights:

WATERLOO, Ill. — As Tim Bardole surveyed his farmland, the soil too wet to plant corn or soybeans because of a recent downpour, he remarked that there are few rays of hope for most American farmers these days. While the weather continues to hamper the planting season, the news over the weekend that the United States and China had only moved further away from a trade deal was seen by the farmers as another blow.

Bardole runs a 2,400-acre farm near Rippey, Iowa, with his father, brother and son. This time last year, they figured the trade dispute between China and the U.S., which had already created an economic nightmare for farmers, would be over by harvest time in the fall. Now, it appears there is no end in sight.

"We just keep hunkering down and doing what we can to reduce costs as much as possible, and digging into reserves, and borrowing more money and using up equity," Bardole said over the phone, adding that the entire industry is doing the same.

China announced Monday that, beginning June 1, it would impose tariffs on $60 billion of U.S. goods. That caused stock markets in the U.S. to tumble, and left farmers to face a future that looks financially bleaker than the historically tough years they have recently faced.

Because of the Trump administration’s trade tactics, the Congressional Research Service concluded in a report published in December that national net farm income dropped by more than $9 billion, or 12 percent, in 2018.

Things looks like they could get much worse as the trade dispute continues.

With the most recent news of the intensifying tensions between the U.S. and China, the price of soybeans has dropped below $8 a bushel for the first time since 2008, which comes as many Midwest farmers are facing rampant flooding on their land during the planting season.

Despite the financial strain that farmers have been enduring while the White House’s trade war continues, many had remained committed to the president and his negotiating tactics. Most farmers tend to agree that China is not an equal trading partner, so the common refrain is that they are willing to suffer short-term pain for long-term benefits.

But after years of hardship, confidence in Trump’s negotiating tactics has begun to waver among some of his most ardent supporters.

Kenneth Hartman, a fifth-generation farmer in Waterloo, Illinois, said he’s long been a Trump supporter . . . But, he added, farmers also need free trade and open markets or else the agriculture community will continue to erode. More than 160,000 farms in the U.S. disappeared from 2007 to 2017, according to the USDA Agriculture Census released in April.

Whether falling confidence in this particular trade negotiation will diminish Trump’s very solid backing among farmers overall, however, remains unclear.

Economists: A Trump Win Would Tank the Financial Markets

As some - who in my opinion are delusional - continue to claim that Donald Trump is a good businessman, there's one test that they utterly ignore: Trump's numerous bankruptcies and the fact that no American bank will make a loan to him and/or his entities. Trump has gamed the system, screwed over lenders and bond holders and other investors with abandon, always making sure that he flees the sinking ship, saving himself as others perish financially.  It's as if he were Sir Cosmo Duff-Gordon leaving the Titanic in a lifeboat with only 12 people in it, he and his wife's luggage included, leaving dozens to die who might have lived had the lifeboat been even remotely filled to capacity. The financial markets and bankers know Trump well, and economists predict that should he somehow win, the world's financial markets will tank, wiping out Americans' savings, IRA's and retirement funds.  A piece in Politico looks at the likely wreckage.   Here are highlights:  

NEW YORK — Wall Street is set up for a major crash if Donald Trump shocks the world on Election Day and wins the White House.

New research out on Friday suggests that financial markets strongly prefer a Hillary Clinton presidency and could react with panicked selling should Trump defy the polls and deliver a shocking upset on Nov. 8.

“Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” said Dartmouth College’s Eric Zitzewitz, one of the authors of the new study along with the University of Michigan’s Justin Wolfers. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”

Stock prices around the world tanked over the summer when British voters surprised pundits and voted in favor of pulling the country out of the European Union. Trump himself now talks about his own upset prospects as “another Brexit.”

The report also shows where investors around the world are making big money on the 2016 campaign. Traders betting on the Mexican peso to take a beating under a President Trump, who has promised a trade crackdown, have lost big following debates in which Clinton did well.

The Trump effect also shows up for traders betting on market volatility. Futures contracts for the VIX index, which tracks market volatility, fell sharply during the first debate, suggesting investors expect much less volatility under a Clinton White House than a Trump White House.

Oil prices rose during the first debate and gold fell. Gold tends to be a safe haven when investors are worried about possible economic and financial instability. And oil tends to go up when investors expect stronger economic growth and more demand for energy.

Michael Obuchowski of Merlin Asset Management has watched every move in the campaign closely— including all the WikiLeaks email dumps on Clinton — and made two calls based on it: that Clinton will win and that she won’t go as far left as some investors initially feared.

“I always assumed Trump would eventually collapse so that meant staying in equities and going away from certain high-dividend stocks assuming Clinton is going to win and try and tax those dividends at a higher rate,” he said.

The new report suggests that the stock market is worth 11 percent more under a Clinton presidency than a Trump presidency. This is a highly unusual circumstance because markets historically prefer Republican policies on taxes, regulation and trade to those of Democrats. . . . . Current market action is the direct reverse of what happened in 2012 when President Barack Obama was running for reelection against former Massachusetts Gov. Mitt Romney. 

Investors now clearly back a Clinton presidency and by a large margin.

The Trump effect is also global.  Britain’s FTSE 100 traced U.S. stock prices higher following the first debate. Currencies in Canada, South Korea, Australia and New Zealand — all major U.S. trading partners — tend to rise when it appears Clinton is doing well and headed to victory.

“All told, these movements suggest that financial markets expect a generally healthier domestic and international economy under a President Clinton than under a President Trump,” Wolfers and Zitzewitz write in their new paper.

This also suggests that a shock Trump victory next month could crush stock prices, perhaps by as much as 10 percent, and send the peso and other currencies sharply lower while ushering in a period of intense market volatility as investors try and discern how Trump would govern and whether he would make good on his pledge to start trade wars with Mexico and China and deport 11 million current undocumented immigrants.

“You would see incredible pressure on stock prices if Trump wins and everyone flooding into rare metals like gold and into bonds” in the U.S., Germany and the United Kingdom, said Erik Jones, professor at the Johns Hopkins University School of Advanced International Studies.

Overall, the authors of the new paper envision a massive global market shock should Trump win. “Given the magnitude of the price movements, we estimate that market participants believe that a Trump victory would reduce the value of the S&P 500, the UK, and Asian stock markets by 10-15%,” they write and “would reduce the oil price by $4, would lead to a 25% decline in the Mexican Peso, and would significantly increase expected future stock market volatility.”

Bottom line?  By supporting Trump, many of his followers will be voting against their own financial best interest, falling once again to the GOP ploy of suckering them in by calls to their racism and xenophobia.  

The True Legacy of Bush Cheney - About as Bad as it Gets

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The image above lays out the facts that my Kool-Aid drinking former GOP colleagues simply cannot face.  They rail about Obama, but the real worse president was Obama's predecessor who not only should have been impeached but also should be tried for war crimes.  Until that latter prosecution occurs, today's Republicans need to simply shut up and engage in some introspection over the horrors and misdeeds they helped to implement.

One thing America does not need is another Republican president.