Trump vs. Koch, and the Winner Is…

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

Which one is better… Trump or Koch?

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If you read last week’s The Deep Woods, you know that this was the question I asked readers to weigh in on. In a moment, we’ll get to the results, along with my view on some of the very thoughtful responses I received.

But if you didn’t get a chance to read last week’s issue, then allow me to give you a brief recap of the latest ideological taste test that pits President Trump against billionaire libertarian activists Charles and David Koch.

Here, I borrowed the set up of the famous “Pepsi Challenge,” by inviting readers to tell me which ideological stance they preferred. Here’s how I set up the two “intellectual cups” to choose from:

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In the first intellectual cup (President Trump) you get a mixture of… tax cuts, deregulation, economic nationalism, populism, protectionism, tariffs, the concept of trade wars are “good” and easily winnable, a zero-sum view of trade policy, a crackdown on immigration and the view that it is a net negative for the economy.

In the second intellectual cup (the Koch brothers), you get a concoction of… tax cuts, deregulation, a push toward more international free trade, more economic freedom, anti-protectionism, trade and immigration policy skewed toward freedom, an anti-establishment fight against climate change and the big government fixes associated with it, and a libertarian view on criminal justice reform.

Well, I must say that I was super impressed, and highly gratified, to get so many rapid replies to this question. And, nearly all the responses I received contained sound logic for the reader’s opinion as to which intellectual cup they preferred, or why we should at least support the intellectual cup in power.

In favor of Intellectual Cup 1 (President Trump)

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Mark P. writes:

I don’t think Trump wants higher tariffs, it’s a means to lower tariffs overall. We’re at a very rare point in history where we have trade power to force lower tariffs for everyone. You have to break some eggs to make an omelet. I’m enjoying Intelligence Report. Good job.

Jim: Thanks for the kind words on my Intelligence Report advisory service. I hope the president’s call for tariffs is just that, a negotiation tool, as tariffs are really just a tax on the American consumer. The way I see it, the bigger the taxes, the smaller the citizen.

Sfehlinger writes:

I favor Trump. Yes, tariffs are tools of protectionism, but supposedly Trump’s goal is to use them as a means to no tariffs anywhere. Impossible to speculate how successful this will be but doing nothing will yield the continuation of diminishing trade fairness. In the short term there will be some pain. Disruption is always painful to some.

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James M. writes:

I think you were not as generous to President Trump as the Kochs. I support Trump because he is our president, elected by the people. How can anyone be against trying to have more free trade among all countries? We have had massive trade deficits and no president has done anything to make fairer for us. Give the president a chance rather than trying to bring him down. Where were the Kochs when Obama was ruining & dividing our country?

Jim: I do support the president, but as an American with a voice, I also am obliged to point out where I think better ideas might prevail. I think we all should do that. As for the Kochs during the Obama administration, well, in the 2012 election the brothers raised an estimated $412 million in support of Republican candidates. That was far more than any other single political action committee.

In favor of Intellectual Cup 2 (Koch brothers)

Richard O. writes:

While not perfect, the Koch soda is much more desired…the other represents no process, no values, no logic, building on our worse base instincts.

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Caster D. writes:

I prefer the Koch blend, all things considered. I also think that immigration is not bad, per se. It is what built this great country. It just needs to be a lot smarter about who we invite to join us in our great country and emphasize that you get to enjoy the rights and responsibilities of being a citizen when you are in fact, a citizen.

Tom O. writes:

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No question which is the least bad choice. I have a basic dislike of anyone who can wield so much financial power that they can seriously sway the political process in their favor, of in whatever direction they wish. This seriously hurts the one-man, one-vote concept, and makes my vote close to worthless. However, the Koch’s are willing to moderate their views, and make choices not purely based on an ideological point of view. A strong conservative, and/or a strong liberal (and I hate both those terms) should be willing to carefully listen and consider opposing points of view, and then decide which view best fits their own point of view.

Jim: I particularly agree with Tom’s last point. A willingness to listen, consider opposing points of view, and then decide which view is best is something that all sides of an issue need to try to embrace. Without this mindset, we are just doomed to ugly tribalism.

S. Sheedy writes:

They both have good ideas. It’s a shame that they get so antagonistic towards each other. This is not a perfect world that we live in.

Jim: I agree here with S. Sheedy. And while competing ideas are always good for societal growth, animosity toward each other by two very similar sides is seldom a path toward progress.

Finally, I received perhaps my favorite reply to any article I’ve ever written, and it came courtesy of reader James C., who writes:

Jim, we spoke at the FreedomFest banquet cocktail hour. I certainly agree with your analysis and preference for the Koch Cup. HOWEVER, Trump has been the force of nature to actually facilitate positive change. There has been a complete void of leadership since Reagan and this has brought us “organized retreat” to the big government socialism infecting most aspects of our lives.

Yes, I often cringe at Trump’s antics, but where would we be without him? Who of the (17) other (Republican) candidates could have won? I suspect none. The entrenched government bureaucracy and media fights everything that threatens their position of power. So, while I agree with your assessment, I believe we should support and defend the actions of our change agent. Yes, there will be litter as big decisions drive change, but I suggest that the litter can be cleaned up over time. I normally do not respond to surveys, but I thoroughly enjoyed talking to you.

Jim: James’ intelligent response and suggestions not only makes practical sense, it also makes me proud that I can connect with my readers in this fashion. It is the goal of my writing to dig deep into the issues affecting us all, and to elicit rational reflection of the sort James displays. For that, I am both humbled and honored.

So, what was the final reader tally?

Well, Intellectual Cup 1 (President Trump), got 52% of the vote, while Intellectual Cup 2 (Koch brothers) got 48%.

That is about as even a split as there can be, and I must say I was surprised to get so much feedback in favor of both positions. To me, this shows how important this ideological battle is, and how evenly it splits the audience.

This split also is consistent with the groups of people I’ve discussed the trade, tariff and immigration issues with. While nearly all of us who responded agree that President Trump was the better choice for president given the final ballot choices, many Trump supporters would prefer a more Koch-oriented fizz on economic issues.

I suspect that this battle of ideas will continue, because the struggle over the best course of action for our nation is at the root of our collective best interests. So, let’s embrace the discussion, and let’s continue to let the art of persuasion and rational argument prevail!

Upcoming Appearance

I am scheduled to moderate a fiery debate between Mark Skousen and Mike Turner on “Buy and Hold vs. Market Timing,” Aug. 23-25, at the San Francisco MoneyShow. I also will be doing two presentations, one titled, “How to Invest Like a Renaissance Man” and one titled, “7 ETFs to ‘Trump’ the Market.” I hope to see you there!

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Forget Pepsi vs. Coke, Now It’s Trump vs. Koch

When I was a kid, one of the biggest “battles” in American culture was Pepsi vs. Coke.

Pepsi even issued its famous “Pepsi Challenge,” where it invited people to take a blind taste test to see which cola they preferred. My family actually replicated this test, and I easily chose Coke every time.

Now, the Republican Party is facing its own form of ideological taste test. But instead of Pepsi vs. Coke, the choice now is Trump vs. Koch.

In two tweets expressing his disregard for the billionaire libertarian activists Charles and David Koch, the president offered up the following assessment of the influential political donors:

The president continued his criticism of the Koch brothers, writing:

Now, the president’s Twitter sentiment toward the Koch brothers didn’t just come out of nowhere. The comments came in response to statements by Charles Koch and his aides, who revealed at their annual donor conference that they would not be supporting some Republican Senate candidates who are in line with Trump’s tariff and immigration policies.

This is classic Donald Trump posturing. Not only is he unafraid to slay the sacred cows of Republican policy of the past, but he also does it via a passive-aggressive demeaning of those who he perceives as his political enemy. Note the buzz words at play, including “globalist,” “overrated,” “America First” and “puppet.”

Now, to be certain, President Trump knows exactly what he’s doing by choosing these words. And, what he’s doing is fomenting dissent between him and two people who have a vision for the country that conflicts with Mr. Trump’s on a few key issues, particularly those of tariffs and immigration. Hey, that’s fair enough. I mean, politics is a bare-knuckle brawl. And, you do what you have to do to win. I get that.

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Yet what I think we should be asking ourselves is what flavor of ideological soft drink tastes better, and which is better for the country. Is it Trump or Koch?

Let’s conduct our own sort of Pepsi Challenge here and do a blind taste test of the ideas at odds here, rather than make it about Trump and the Kochs.

In the first intellectual cup, you get a mixture of… tax cuts, deregulation, economic nationalism, populism, protectionism, tariffs, the concept of trade wars are “good” and easily winnable, a zero-sum view of trade policy, a crackdown on immigration and the view that it is a net negative for the economy.

In the second intellectual cup, you get a concoction of… tax cuts, deregulation, a push toward more international free trade, more economic freedom, anti-protectionism, trade and immigration policy skewed toward freedom, an anti-establishment fight against climate change and the big government fixes associated with it, and a libertarian view on criminal justice reform.

While both of the sodas have their similar flavor appeals; for me, the far more bitter tasting intellectual cup is the first one. The second cup is much more appealing to my intellectual palate. Why? Well, because the key ingredient here is more freedom, less government, and more trust in capitalism than in big government.

It is this freedom agenda of the Koch brothers that has earned them a diabolic reputation from the left, especially the socialist left as exemplified by Sen. Bernie Sanders.

In fact, President Trump actually sounds a little bit like Bernie Sanders when he criticized the Kochs, a fact pointed out with characteristic wit and humor by Lisa “Kennedy” Montgomery of Fox Business:

“The president sounds ‘exactly’ like Bernie Sanders when he irrationally demonizes the Koch brothers and idolizes tariffs and protectionism. If he embraced his fickle free market whims, he could save his energy to fight the real enemy: statist socialists who want to bring down the entire system, so the government can run your life and force you into an early grave. Socialism is the worst bad idea of all.”

It is because the Koch brothers stand strong against socialism’s constant creep that they have such a diabolical reputation on the left. And make no mistake about it, both Charles and David Koch are formidable — and formidably wealthy — activists who put their money where their ideas are. And to their credit, they do so even if those ideas conflict with those of a Republican president.

So, which taste do you prefer? Trump or Koch?

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On a Stronger Telescope

“The stronger the telescope, the more stars there are.”

–Dawes, “Telescope”

Very few rock bands today can sound both fresh and timeless all at once, but that’s what the Los Angeles-based Dawes has done. If you’re a fan of the “Laurel Canyon sound” of the 1970s (Jackson Browne, Warren Zevon, Neil Young, The Eagles), then you must check out this group of talented artists. Our quote this week is the chorus from their song “Telescope,” which is off their new album “Passwords.”

To me, this lyric means that the better tools we have for self-reflection, the more we can discover about ourselves. And though sometimes we may not like what we discover, the best disinfectant is always sunlight. So, strengthen your telescope, and relish the chance to uncover your hidden stars.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

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