The Art of the Deal

Judging Trump with the usual “presidential lens” is not going to work. ‘Normal’ Presidents speak only formally, their words carefully weighed and chosen by multiple advisors. For example, consider the press conferences of the heads of the Fed or the ECB. Analysts look for clues as to direction of policy not only from their carefully crafted comments, but also from the nuances, the expression, what is said and what is not said.

Donald Trump has a completely different style, this is obvious. The important question is if there is method in the (perceived) madness. For the ones that think that there isn’t any, such as all the liberals, the New York Times, most of the Europeans, etc. all his comments on Haiti, embassies, and the like are read through the prism of a crass, inept, president, whose only allegiance is to himself and the rabid right-wing constituency that elected him.

But consider the following. US presidents have to deal with very complex, sometimes generationally intractable issues, such as for example, Iran, North Korea, the Middle Eastern conflict, to name a few. The truth is that successive politically correct presidents, haven’t achieved any result with the standard methods. Trump is trying a completely different system. He wants to broker peace between Israel and the Palestinians, but doesn’t desist from doing what he perceives to be the right thing such as moving the embassy, and empowering his ambassadors to say the truths about the origins of violence, the bias of the UN and many others. He can also say that he has a good relationship with the N Korean leader after calling him names only a few weeks ago. This is a negotiating style. It forces opponents to keep on guessing, and sometimes in negotiations that is a winning tactic, albeit not one without risks.

Trump’s Rally

An unfortunate trait of politicians is to take credit for things they…didn’t do. Clinton famously benefitted from George W’s tax hike that created many good years of income for the treasury, Obama claimed credit for the turnaround of the economy after 9/11 even though most of the credit should have gone to the Fed, and the list can go on.

 Donald Trump is following in the footsteps of his predecessors when he takes credit for…. the decrease in airline accidents, but is probably correct in taking credit for the stock market rally. Time will tell whether the tax cut will translate in lasting gains for the economy but in the meantime, investors should ignore the bull market at their peril.