The Bear’s Lair: Trump beats Biden or a Bushie.

Calvin Coolidge is not running. Nor is Lord Liverpool, though his ability to win four successive general elections in his own time suggests he could do so now, with only modest policy adjustments. When deciding whom to vote for, we must measure the available candidates, not against perfection, but against the opposition candidate and those their parties might have chosen. Looked at that way, Donald Trump beats a Bush, a Rubio or a Romney hands down, let alone Joe Biden.

The Internet is currently full of so-called “conservatives” either promising to vote for Joe Biden or at best saying they would reluctantly vote for Trump even though in 2016 he was their least favorite of the Republican candidates. For me, the choice is easier. Trump was not my favorite candidate in 2016, but he was no worse than fourth or fifth of the 17 alternatives available. After four years, I have been favorably impressed by his presidency, except in the areas of fiscal and monetary policies. But then, look at the alternatives!

The two biggest problems with U.S. policy today are monetary policy and fiscal policy. Interest rates have been well below the level of inflation for more than a decade, causing gigantic asset bubbles, enriching the unworthy beyond belief, outsourcing far too many jobs to the Third World, and causing productivity growth to slow to a crawl. The U.S. budget deficit has been yawning ever wider for decades, piling up debt, impoverishing our children and diverting resources into the least productive uses, those of the government. Both problems have now become critical. Neither Trump nor Biden understand the problems; both promise to make them worse.

However, the other recent presidents also made both problems worse. George W. Bush appointed Ben Bernanke Fed chairman, despite his already-notorious “helicopter” monetary theories; Barack Obama reappointed him and then appointed the equally sloppy Janet Yellen. George W. Bush diverted the U.S. budget from the sound deficit-free position left by Bill Clinton, and Obama then made the deficit very much worse, also over-regulating the U.S. economy so that it never really recovered from the 2008-09 recession and budget deficits hovered near $1 trillion for a decade.

Of the other Republican candidates in 2016, Jeb Bush had the faults of his brother, while Marco Rubio is a convinced Keynesian, who wants to increase social spending and strip the few remaining elements of incentive out of the U.S. tax code and replace them with a child tax credit. Neither would have been significantly better than Trump, therefore. Ted Cruz or Rand Paul would have been better than Trump, but if Trump had not run, their chance of gaining the nomination against the GOP Establishment-supported juggernauts of either Bush or Rubio would have been minimal. Our monetary and fiscal woes, in this light, seem inevitable, and we can only trace them back to an Original Sin, and ask: where did we go wrong?

From both a monetary and a fiscal perspective, the date of the Original Sin can be pinpointed at the late 1990s. Fed chairman Alan Greenspan fatally weakened monetary policy controls in February 1995; George W. Bush passed a budget definitively abandoning fiscal rectitude in 2001; somewhere between those two dates is when Original Sin occurred. Having pinpointed the date that closely; the Sin becomes clear: the Republican impeachment of Bill Clinton in 1998.

The alternative universe where that did not happen looks much brighter. Clinton sticks with Monica Lewinsky and divorces Hillary, the usual story of a man in his early 50s who has achieved his life’s ambitions. As a result, we are spared Hillary’s Senate career and that talentless hard-left politician’s two runs for the White House. Bill Clinton meanwhile avoids any escapades on Jeffrey Epstein’s island, and becomes a highly respected centrist elder statesman, preventing the Democrats from steering so far towards socialism and worse. Maybe we get Al Gore not George W. Bush in 2000, but so what – Gore was still fairly moderate at that stage and had not degenerated into the eco-extremist he later became. With no Iraq War and probably no Barack Obama or Ben Bernanke, the U.S. Budget is still close to balance and monetary policy still relatively sane. Maybe Newt Gingrich, his career not wrecked by the failure of the Clinton impeachment, becomes President sometime – that would have been fun!

Returning from dreams of alternate history to the world we live in, today’s monetary and fiscal follies are the ultimate result of John Maynard Keynes. Fiscally, he advocated “stimulus” of more government spending every time the economy hit a hiccup. Monetarily, his fingerprints are less obvious, but his advocacy of a monetary system unlinked to the “barbarous relic” of gold and his belief that rentiers served no useful social purpose together led us to current monetary policy follies. In reality, Keynes said nothing new; there were politicians advocating “stimulus” and funny money opposing Lord Liverpool, 200 years ago (Henry Brougham and the 8th Earl of Lauderdale, to name two). Keynes merely codified the eternal urge of politicians to get something for nothing and pay for favorite boondoggles by looting savers.

We have established therefore that while Trump is in fiscal and monetary policy no better than the general unattractive run of today’s politicians, he is also no worse. We then come to a whole host of other policies, in which Trump is markedly better than other politicians, in some of which he has broken ground that had been thought impossible.

Perhaps of most consequence for the long-term, Trump has nominated three solidly conservative Justices to the Supreme Court and has a very good chance of getting Amy Coney Barrett, the third, confirmed, if not before the election on Nov 3, then at least before the end of his term. Ever since Dwight Eisenhower nominated Earl Warren in 1953, we have seen that Republican Presidents’ judgement of potential Supreme Court Justices is a very hit and miss affair.

Eisenhower’s two mistakes, Warren and William J. Brennan, ensured leftist control of the Supreme Court until at least 1986, with President Kennedy’s error in the opposite direction, Byron White, being insufficient to offset their effect (White is the only such error by a Democrat President since the New Deal era). Trump’s soundness on Justices would not have been shared by his alternatives; one need only think of George W. Bush’s attempt to nominate John Roberts and Harriet Miers, or his father’s nomination of David Souter, to see how error can easily creep in if a President does not have a sound grounding in principle.

In other areas also, Trump has been distinctly better than the alternatives. On immigration, he has not achieved enough to please Ann Coulter, but he has at least pointed the administration in the right direction, and largely ignored the siren songs of the U.S. Chamber of Commerce and the Wall Street Journal. On foreign policy, he has been both more intelligent and more courageous than the alternatives. He has moved the U.S. Embassy to Jerusalem, which numerous Presidents had promised but wimped out of, and has thereby secured two useful Middle East Treaties, very likely with more to come. He has also greatly reduced the U.S. footprint in that misbegotten region, which had cost trillions of dollars, thousands of lives and the bulk of U.S. global credibility, for no significant economic or geopolitical gain. Trump’s “Art of the Deal” approach to life leaves him over-optimistic, over-borrowed and over-leveraged in economic policy, but in foreign policy it works as well with the world’s thugs and dictators as it does with the shysters in New York real estate.

Two other areas where Trump beats his potential competitors are trade and de-regulation. On trade, Trump has for the first time identified the problems with the economists’ favorite model of globalization, and has taken steps to restore necessary grit to the machinery of the world trading system and thereby shut down the possibility of a totalitarian global state (both those struggles will outlive his time in office, needless to say). His deregulation has been notably more enthusiastic than that of any President since Ronald Reagan; in particular he has taken the U.S. out of the 2015 Paris agreement and ended several damaging “climate change” initiatives, for both of which we can be grateful. In both trade and regulation, the Bushes were far too prone to defer to leftist conventional wisdom perpetrated by the permanent bureaucracy.

“Never-Trumpers” complain that Trump is a man of bad character but compared to what? – these people are politicians! I find his tweets mostly funny and refreshing, and don’t object to his egomania, which is merely more visible than that of most leaders. To me, he most resembles the character Bob Hope played in the wonderful 1952 movie “Son of Paleface” who, being a Harvard graduate, wanders round the Wild West in an early automobile and a Big-H sweatshirt, proclaiming: “I was Peaches, I was Cream; I was Captain of the Team.”

Bob Hope’s character was the hero of that movie – and I believe Trump to be the hero of the Washington movie we are currently watching.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)