Memo: A strong economy and a mandate

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Memo: Media Tendencies + Trends: US-China Commercial Relations

October 26, 2018

A strong economy and a mandate

Americans' view of the current economic conditions and the economy's trajectory have not been this upbeat since 2000.

Jeffrey Jones at Gallup reports: "Currently, 54% of Americans rate economic conditions as "excellent" or "good," and just 12% as "poor." Also, by 57% to 34%, more Americans say the economy is getting better than say it is getting worse."

The Gallup Economic Confidence Index now scores the American economy at a +33.

The last time the index was at this level was January 2004 and has not been higher since November 2000 (+39) which was at the end of the dot-com mega boom.

Gallup's October 1-10 poll finds similarly positive ratings of the American job market.

Sixty-eight percent of US adults report it is an excellent time to find a quality job, tying July's measure as the highest in Gallup's trend dating back to August 2001.

Ten years after the Great Recession rocked the US, Americans' confidence in the economy has returned to levels not surpassed since the dot-com boom, according to Gallup.

President Trump and his Republican allies on Capitol Hill hope the strong economy will help the party hold onto its power in the midterm elections as well as give it the necessary space to engage China in this current trade spat.

This robust American economy is giving more credence to those thinkers and policymakers who believe now is the time for America to more aggressively push back on China's bad practices in the business world and recast commercial rules that have governed the globe since the World War II.

J. Michael Cole, writing in The National Interest, opines: "The Indo-Pacific region is on the frontline of the greatest challenge to the international liberal order since the 1930s.

"For decades, the assumption which most influenced China policy had been that integration of China through the WTO, and a permissive attitude to its misbehavior domestically and abroad, would eventually lead to the creation of a China that was more “like us”—more palatable, somewhat liberal, if perhaps not entirely democratic. In other words, a responsible stakeholder that accepted international norms. Thanks largely to Xi Jinping, such notions have been buried, and it is very hard today to find anyone who can reasonably argue that China remains on the right track and that we, therefore, should continue to give it the space it wants."

As Trump enters the second half of his first presidential term, regardless of the midterm election outcome, he may feel he has the proper economic performance indicators to reset the international order that protects America for the next generation.

Holman W. Jenkins, Jr., writing in the Wall Street Journal, suggests: "The administration needs a mandate to rip up the relationship with Beijing. Business leaders who expect the China trade dispute to end the way the Mexican and Canadian disputes did had better wake up. It won’t be over soon."

A strong economy, coupled with increased sales, and growing revenues can shelter many subpar policies. Expect the Trump administration to lay to the American voters how extensively it plans to reshape the massively essential and highly interconnected US-China economic relationship soon - possibly before November's G20 meeting in Argentina.

Jenkins, Jr goes on: "If the Trump boom has proved anything... it’s proved that American prosperity is still made at home. A better answer to China’s perverse ambitions would be to focus on renewing our own economic dynamism, building up our military and alliances, dealing with the fiscal challenge of our welfare state. These priorities are likely to guarantee American success in the coming century."

Articles to read:

Holman W. Jenkins, Jr.: Let’s vote on a China cold war https://on.wsj.com/2Rcxkmu

J. Michael Cole: The true 'Pivot to Asia' is here http://bit.ly/2OKXC2d

Marc Ross

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