The TACO Man Takes It to the Bank

 by Pa Rock

Armchair Economist

I'm an old man and sometimes I tend to get confused, so help me out here.  Do tariffs on imports go up on even numbered days and down on odd numbered days, or is it the other way around?  And when we go from a month with an odd number of days to one with an even number, like we are doing today, does that reverse the order in which the tariffs move?  What about in months when there are excessive amounts of holidays, or no "r's"?

There has been a lot of noise on the internet this week about the predictability of tariffs, with some arguing that a deep-seated character flaw is causing Trump to endlessly charge ahead and then pull back on tariffs.  The acronym "TACO" was developed by persons unknown to highlight the predictable process.  TACO stands for "Trump Always Chickens Out."  Trump, of course, does not like being alluded to as a barnyard fowl, or anything Mexican, and he told the female reporter who brought it to his attention and quizzed him on the subject that she was asking a very "nasty" question.

(Speaking of deep-seated character flaws, when Trump uses the term "nasty," it is always directed toward a woman.  Somebody has some seriously unresolved "mommy" issues!)

A report a few days ago on National Public Radio (NPR) suggested that there have been in the neighborhood of  fifty major fluctuations in tariff rates since Trump's much-hyped "liberation day" massive rollout of tariffs on April 2nd - and these rate fluctuations always ripple (and sometimes crash) across the markets   Sometimes the leader of a nation that is being victimized by Trump's trade policies will phone in and grant Trump some concession which gives him grounds for declaring a "deal" and congratulating himself in a public forum.  Other times when the markets are reacting badly to Trump's tariffs, he has to get more creative in finding ways to "chicken out."

Another news report indicated that instead of reacting to the markets, Trump (or those around him) may actually be manipulating the markets to their advantage.  That report said that a certain group of traders were making steady gains by selling stock when the markets are high and buying when the markets plummet after Trump announces a new round of tariffs.  

Buying low and selling high sounds like something I probably learned in Econ 101, but the problem is, of course, knowing when those highs and lows are occurring.  Trump, however, seems to have established a rhythm to his tirades and tantrums, which were often followed up with bullying tariffs and precipitous stock market drops, and then  the presidential "chickening out" in which the markets rise.  Many people make money by buying and selling according to Trump's behavioral cycles.  The profiteers even include members of his own family.

So there is the nut of the matter:  does Trump "chicken out" because he is beset by forces he cannot control, or is he a cunning manipulator of economic forces that sweep around the globe in predictable patterns?

It is comforting to feel morally and intellectually superior to the TACO man, but I think we underestimate him at our peril.  While some measure political success in securing basic human rights for mankind, Donald Trump measures it in dollars - and while some of us may be embarrassed by his presidency, Trump is taking it to the bank.