The Hammer

No, this blog post is not written to refer to Elizabeth Warren’s continual reference to “poor Americans being hammered.” It is meant to reinforce a point I have previously made about the economic competition between the United States and China. President Trump is making slow progress in his attempt to level the playing field in this economic arm-wrestling match between Xi Jinping and himself.

It appears the Phase 1 trade deal is done and now comes Phase 2, the harder one,. Trump has one tool for this phase besides tariffs, a huge hammer, he has yet to use in this competition ... and that is to force Chinese companies listed on American stock exchanges to comply with Generally Accepted Accounting Principles (GAAPs) and to undergo annual audits by a reputable accounting firms.

Why our SEC has allowed Chinese companies to slide on these restrictions is beyond me? This has permitted its companies access to American capital that they shouldn’t have had ... and given them an unfair advantage against those American companies who have had to comply. And this capital has also indirectly funded much of China’s worldwide mischief.

At the very least, Trump should make such compliance a requirement for Xi to get a Phase 2 trade deal ... a hammer that finally would make the Chinese economic competition a far fairer match.

The Hammer

Turkey’s Erdogan has backtracked  from his defiance of Trump and the US over his invasion of Syria. First, he claimed that he wouldn’t meet with VP Pence and SecState Pompeo. Then he caved in that defiance and met with them ... the result of which was an announced ceasefire with the Kurds in Syria ... see: Yahoo News Story and Video. The terms of this deal, at first blush, seem a win for Trump and our allies, the Kurds. Maybe so ... we will see how well the Turkish follow-through is.

But, if Erdogan does live up to this capitulation, it would seem Trump and company had a pretty big hammer in these discussions ... for Erdogan is a very proud and powerful man. I would love to know exactly what this hammer was. Were US economic  sanctions enough? Or did Putin or Xi come charging over the hill to Trump’s rescue?

On Wednesday, 129 House Republicans voted for a Democrat-sponsored resolution condemning Trump’s decision to pull our troops out of Syria after Turkey invaded. Only 60 GOPers voted against this premature resolution. I suspect that, given a re-vote, things would come out differently today.

The Hammer

The Obama administration has not been shy about using the levers of government to raise campaign cash or punish those companies or political blocs that have opposed them.  I suppose that this is the Chicago way and, to me, it is very disturbing.  We have seen it in how the IRS blatantly abused its powers during the 2012 elections. Now we are viewing it in how the Justice Department and other government agencies are extorting money from Wall Street firms that didn’t toe the line during these same elections … see: Breitbart Story.  Attorney General, Eric Holder, and the Federal Housing Finance Agency (FHFA) have dropped the hammer on J.P. Morgan to the tune of some $18 billion of unprecedented fines stemming out of the 2008 financial meltdown … see: CNN/Fortune Story and The Guardian Story.

Please don’t get me wrong.  I believe that there were oodles and oodles of real crimes that led up to the sub-prime mortgage crisis.  But have we seen any of the kingpins in these perpetrator firms even go on trial for these travesties?  No.  Most everyone knows who these guilty slimeballs are … yet they luxuriate in their buyout retirements. Instead, we are seeing financial blackmail and extortion.  Monumental fines and fees are being levied against those firms that were told by the United States Treasury Department to adsorb these miscreants’ entities and, now in return, are being financially shaken down.  There is clearly going to be more of this thuggery coming out of this administration … now that our financial firms have been propped up by the Federal Reserve Bank and are thus healthy enough to pony up with some significant pelf.

This behind-the-curtain method of our government’s picking corporate winners and losers is disturbing and presages even more blatant interference in what was once only a slightly corrupt system of political donations.  One can clearly read the message for the upcoming elections in 2014 and 2016.  Support Democrat candidates or suffer similar consequences to J.P. Morgan.  The hammer of big corrupt government is now corrupting the flow of money into political parties further still.  Take that you Supreme Court and your Citizens United decision!  You think that corporations are people and money is free speech?  We will show you that we, guttural government, can subvert the intent of this decision to a fare-thee-well.