French Protests Reaffirm The Global Popular Revolt

French Protests Reaffirm The Global Popular Revolt

Whether you love him or hate him, it is uncanny how often President Trump is right. How do you get a Trump reference in a blog about the Yellow Vest protests in France?  Simple:

1. Macron decided to verbally rebuke the President at the World War I memorial service in November in Paris.

This is particularly galling to insult Trump, because it was an insult to all Americans. The French had to shoot their own soldiers in World War I for refusing to fight – the reason most gave was they were waiting for the Americans to arrive to save them … which we did.  Never mind the liberation of Western Europe in World War II.  Obviously, the volume of American blood and treasure spent on defending and saving the French (and all Western Europe) should only result in one form of public statement whenever French leaders speak – and that is to say – “thank you.”

2. Macron has been forcefully pushing policies moving France and the EU away from the United States, such as a new currency regime with Iran, and a European defense force. This was a direct affront to Trump.

Never mind the Europeans cannot even meet their NATO goals of 2% GDP spending on their own defense, Macron has been forcefully pushing for alternatives to the American-led defense order.  His support of German proposals to work with the Chinese and Russians to create a currency facility with Iran – which would circumvent US sanctions and damage dollar hegemony – is par for the course from this French leader.  This goes against the America’s current Iran policy.

3. Macron has positioned himself as the de facto European leader on the issue of climate change. He is Europe’s Al Gore – regularly deriding Trump over the Paris Accord withdrawal, and bragging about his fuel tax increase. That is, until now.

And that is where we find ourselves now – the protests in France known as the Yellow Vest Protests were a rejection of the massive higher fuel taxes the Macron government imposed upon the French people primarily to meet their Paris Climate Accord requirements.  Laughably, and predictably, the French people rose up to reject this fool-hardy plan.  Since then the protests have grown, with wide-spread riots and property damage on a massive scale.  Macron went on TV to try and calm the masses, and to give in to most of their demands … eerily reminiscent of the Jimmy Carter’s malaise speech as many analysts have stated.  It was a colossal failure, and grandiose defeat, of epic proportions.  Macron’s public rebuke of Trump, only to follow with such a disastrous policy failure … and lower approval ratings as Trump points out … makes this issue tailor-made for a Trump tweet assault.  And of course, he delivered.

French Protests Reaffirm The Global Popular Revolt

French Protests Reaffirm The Global Popular Revolt

The French Yellow Vest protests are a protest against fuel tax increases and other government fee increases that have had a huge negative impact on the home finances of France’s middle class.  These protests are reaffirming what we knew a few years ago – first with Brexit, then with the election of Donald Trump:  there is a popular revolt against the globalist elite political agenda.

That populist, nationalist revolt includes:

1. “A rejection of the Paris Climate Accords and global climate policy“: It’s not that people wish to harm the environment, or that they don’t believe man impacts the environment. They just are rejecting radical changes to their lifestyle and giving more power to government’s that already don’t deliver on their promises.  The public does not see the science as overwhelming, and they see politicians and big business ready to enrich themselves over the changes to economic policy (see Solyndra).  Macron’s fuel taxes and the Yell-Vest protests are another prime example of this issue.  That has inspired the push-back.

2. “A rejection of open borders”: This is the most glaring, and most obvious of all.  The Italian government was elected on the platform of closing the borders … all of Eastern Europe and Poland have elected governments specifically on the issue of secured borders … Brexit voters primary motivation was rejecting open borders … German alt-right parties have won more seats than since the Nazi era, and Merkel had to provide a resignation date, solely on the issue of closing borders … Donald Trump’s signature issue was building a wall … the importance of this issue to actual citizens in each country cannot be disputed, or over-looked.

3. “Taxation without representation is still a potent ignition of populist anger”: It may not be the Boston Tea Party, or the American Tea Party protests of 2009-10, but the French Yellow Vest protests have been unmistakably anti-government and anti-taxation in nature (and certainly violent, as compared to the peaceful US protests in ‘09-‘10). The public will only take so much … while the rich and powerful jet across the world and seem to take no responsibility for climate change, they instead force the working masses to pay the price for these policies and economic changes through higher taxes. That will always be met with public rejection and the visceral anger you see in the Yellow Vest movement.

So back to Trump – exiting the Paris Climate Accord was met with global derision and disdain.  But as of today, how is everyone else doing in meeting their climate accord goals?

The answer:  not a single country is reducing their emissions … France and everyone else has increased their emissions above their historical averages.  So not only has the rate of increase not slowed, but the increase has accelerated!!!

The only countries currently compliant with the Paris Climate accords are:

Bhutan

Costa Rica

Morocco

Gambia

Ethiopia

India

The Philippines

Seven countries in total, none of whom are known as large, industrial powers to begin with.

 What are the takeaways?

 1) The US was right to withdraw from an accord that was not ratified by the Senate, that no other country is committed to and that, as now proven, does not work.

2) Macron’s fuel taxes and the Yellow-Vest protests are proof that globalist climate change policies pushed by the elites are not welcomed by the voters.

3) Western elites are growing further and further apart from their voters, and this is causing great upheaval in what used to be traditionally stable countries.

Governments will have a hard time enacting new taxes when their elites live better, and more apart, from their voters than ever before.  There is no “trust” between the governing and the governed, and without radical changes to the standards and ethics of those in power in the near term, long-term planning and execution of important government policy will prove difficult to achieve.

This unstable marketplace means stability for your portfolio has never been more important.  Call now! (877) 912-1919

NAFTA Out … USMCA In

NAFTA Out … USMCA In

It was argued during the last 8-10 years that it would be impossible to re-negotiate NAFTA (North American Free Trade Agreement), and even if we did, we could not get the changes we wanted for the betterment of the American labor force.  NAFTA, ratified in 1994, helped open markets between Canada, Mexico, and the US.

Most analysts have argued over the years it has been a mixed bag, with the United States usually on the losing end regarding market share and exports.  Before President Trump, many politicians ran against the benefits of NAFTA, and labor groups regularly have denounced it.

BOOM!  My how things have changed!  Out with NAFTA, and IN with the United States, Mexico, Canada Agreement (USMCA).

While the media refers to “cosmetic” changes, or that the President did not get the Canadians to concede on the main sticking points of dispute resolution, any fair-minded review of the terms and conditions leaves no doubt that this was a categorical victory for the country.  And the market response reflected that, with another record stock market high this week after the news was released.

Politically, the deal still must be ratified by each country’s legislature – the US, Canada and Mexico.  One would think that US Democrats would join Republicans in ratifying this new treaty, since they support so many of the new changes.  But in this polarized atmosphere, who knows?

What are the changes the USMCA will bring to North American trading rules?  Here are the Top Five:

Top-Five Changes coming out of the USMCA Trade Agreement

 5.“Lowered tariffs across the board among member states”:  The average tariff under NAFTA among the US, Canada and Mexico, when goods are sold across the border, is approximately 9.3% under.  The agreement would drive the average percentage tariff down to roughly 7% – this 2% decrease totals nearly $20 billion in savings for the consumer.   WINNER?  AMERICA! 

 4.”Higher Pay for Auto Workers”:  Starting in 2020, 30% of all automotive production must be completed by workers earning more than $16 an hour…in 2023, that number rises to 40% of all production completed by workers making over $20 an hour.  This will drive wages up for US producers and increase jobs as supply line savings will not off-set the increased pay for foreign labor.  This requirement did not exist under NAFTA.  WINNER? AMERICA!

3.“Auto parts must come from North American manufacturing”:  Under NAFTA, you could qualify for zero tariffs if only 62% of the automobile was made of North American parts.  now, the requirement has been upped to 75% must come from North America.  WINNER?  AMERICA!

 2.“Greater and more stringent protections for Intellectual property”:  While also needed with China, these new laws allow for law enforcement to stop and raid potential pirating by counterfeiters in intellectual property and increases the sentencing guidelines for such theft.  The easier approval for warrants will help prevent the IP from getting shipped to Chinese or other state-sponsored crime organizations in the first place.  WINNER? AMERICA!

1.“And Trump for the win, Canada caves in on US access to their dairy market”:  A long-time complaint of US farming was the near total banning of US dairy products.  That has been revoked under the USMCA.  As the USA Today put it:  “….Canada will ease restrictions on its dairy market and allow American farmers to export about $560 million worth of dairy products. That’s about 3.5 percent of Canada’s total $16 billion dairy industry.”  Canada, former President Obama, and scores of US officials said this was a red-line for Canada, they would never do it…BOOM!   WINNER? AMERICA!

It was not all a victory.  Any fair negotiations will have some compromises, or moments where we “agree to disagree.”  Another Canadian red-line was the Dispute Resolution process under NAFTA.  It has been grandfathered in to the USMCA despite American resistance.  The Canadians were unable to remove the current 25% steel tariffs Trump has imposed on all steel entering the country.  So not everyone got what they wanted.

But the American worker clearly got what they needed.

Trump Rejects Globalization at the UN

Trump Rejects Globalization at The UN

It would be remiss not to mention the on-going Supreme Court nomination hearings.  However, the highly charged politicized process in DC is something too partisan to make for a good, positive discussion this week.  We encourage our readers to watch and draw their own conclusions.

But the 24-hour news cycle always delivers stories that can, and, will affect your money. One of those stories was President Trump at the UN this week. Among the many topics he discussed, renouncing globalization was at the top of the list.

And good for him.

Love him or hate him, the President was right to assert the United States’ rejection of the ideology of globalization.  The term globalization does not have a singular meaning.  It can be the rather benign belief in open markets, free trade, and equal justice among nations.

However, that simplistic belief has no relation to how globalization has played out for American workers, and advanced economies, over the last 25+ years.  For those who have seen declines in their standard of living over this period of time, globalization has resulted in unfair trade, lost blue collar employment, and growing economic inequality.  It has also meant an allegiance to global institutions over US sovereignty.  That is morally, ethically – and Constitutionally – wrong.  Free trade is great, but not when only one side is trading freely, and the other is stealing your ideas and preventing you from selling in their market. To suggest such trade is “free” is laughable.

Despite the theoretical positives, globalization in its worst form has negatively impacted American workers and the American economy, and has been a direct threat to the supremacy of American constitutional law and American sovereignty.

Here is a Short History of the Globalization Movement Over the Last 25+ Years:

  1. “Bill Clinton pushed Chinese admission into the World Trade Organization (WTO) and NAFTA”: Globalization’s primary issues are related to trade.  The WTO is a treaty bound organization, and the successor to the General Agreement on Tariffs and Trade (GATT).  GATT and the WTO is an American created, American led organization whose sole purpose was to bid together like-minded Democratic and market economies in a rules-based global trading system.  China was a backward, third world nation in the late-90s.  But when Bill Clinton agreed to their admission to the WTO in 2000, the Chinese economy went into over-drive, benefitting from technological theft of American intellectual property and compliant US businesses.  It is not a democratic country and is not a market-driven capitalist economy.  The results have been predictable.  The US hoped that Chinese admission would help them become more democratic and lead to a freer Chinese economy.  It has not.
  2. “The first President Bush and Bill Clinton negotiated the free trade agreement known as NAFTA”: The second pillar of globalization was NAFTA.  The US Senate ratified the treaty between the United States, Mexico and Canada, in November 1993.  It was designed to create a large free trading bloc eliminating tariffs and expanding GDP for all three countries.  It did expand GDP, but Canada continued to place tariff’s on US agriculture and Canadian firms regularly steal US pharma intellectual property to sell generic drugs at a lower price.  Mexican labor is much cheaper due to few if any environmental or regulatory standards.  President Clinton also promised it would reduce illegal immigration, as expanding markets in Mexico would provide greater opportunities for Mexicans within their home country.  None of that proved true, and nothing more than an unequal marketplace has evolved.
  3. “Clinton argued, as did Bush 43 and President Obama since, that free trade would lead to more money in the pocketbooks of Americans”: On average, household incomes did rise over the last 25 years, but they remain stagnant when adjusted for inflation.  Not all of the rise can be attributed to globalization, and the primary concern is that the average rise in incomes does not reflect an equal distribution, as the highest 1% has been the primary beneficiary from globalization.  Blue collar and middle-income families have seen their wages either flatten, or falling behind (Economic Policy Institute, www.epi.org).  This argument from our leaders has been proven demonstrably false.
  4.  “Globalization has not led to greater global financial stability”: Free trade and the submission of our sovereignty to global institutions, has not led to greater financial stability and unencumbered GDP growth.  In fact, it has led to quite the opposite:

-From 1945 through 1971, there were no substantial financial crises.  This is best known as the “Bretton Woods system.”  This era was a system supported by the US dollar anchored to gold.

-From 1971 through 1980, developed nations went through a period of stagnation and recession due to Nixon’s removal of the dollar from the gold standard, oil shocks, etc., but no systemic crisis threatened western economies.

-From 1980-94, developed economies enjoyed unperilled growth through the Reagan Revolution, led by tax cuts and a “strong dollar” policy.  The 1987 stock market correction had no impact on the larger economy and was concentrated in financial markets for a short period of time.

-But from NAFTA 1994 forward, which most consider the advent of the globalization era, we have seen massive global shocks every few years.  they have included and not been limited to: (A) Asian currency crisis; (B) Russian ruble crisis; (C) Mexican peso crisis; (D) Dot.com bubble burst; (E) Long-term Capital Management bailout; (F) 2008 Financial Crisis.  And there are many more.

The basic tenets of globalization have proven untrue, and the consequences have been quite damaging to individual American families:

  1. China does not play by the rules, they do not enforce the same standards as western countries, and regularly steals US technological advances and intellectual property. They sell into our market with impunity, while restricting US companies from access to Chinese markets.  We were told they would become more democratic from this engagement.  This has proven untrue.
  2. Mexico was supposed to see an increase in GDP and business expansion which would slow illegal immigration into the United States. That has proven to be woefully untrue.
  3. Expanded wealth has not occurred, and US blue collar labor has been hollowed out by companies leaving to seek lower labor costs.
  4. There has been increased inequality, as most of the gains have gone to the upper end of the wage scale.

Globalization has proven to be a negative for US policy and more importantly US citizens.  The promises of increased wealth for everyone has only proven to serve as increased wealth for foreign countries on the backs of US intellectual property and innovation.  And actually, it has increased the wealth and power of a communist enemy of our country.

Globalization has not resulted in free trade or fair trade….it has only proven to be a bad deal for America.

 Whether you love the President or loathe him, on this policy, he is absolutely correct.  Globalization should be rejected by American leaders.