Rod Martin's "The Week" – April 2, 2016

A Note From Rod

Dear Friends,

It’s been a big week. As always, we have a lot more for you at RodMartin.org and in the articles below my note — including an important guest piece by my friend John Mauldin on the troubling implications of negative interest rates — so don’t miss those: they’re important. But now, to it.
First off, our villain of the week is Karl Rove. Rove is out suggesting that a “fresh face” — which is to say, no current Presidential candidate — might be the best choice for the GOP Presidential nomination.

Sometimes you just have to shake your head.

Rove seems to think he’s being original or clever. Perhaps he thinks his comments are a trial balloon. He seems completely oblivious to the fact that absolutely everyone has thought he was up to exactly this for months.

The idea that the GOP Establishment would cancel more than a year of campaigning and elections with a wave of its hand is an incitement to riot (if you’ll pardon the term): it would shatter the party irrevocably. I don’t mean that the Democrats would win in November. I mean that the Republican Party would lose the trust of so many people that it could never rise again.

This would be true even if it happened spontaneously, “in the moment” as it were. But for Rove — of all people in the universe — to float it, and months ahead of time, ensures that any outcome other than the nomination of Ted Cruz or Donald Trump will absolutely be seen as illegitimate, with Rove himself seen as the corrupt political boss who must be destroyed.

The mind simply boggles. What is this man thinking?!

Fortunately (albeit ironically), the RNC’s Rule 40 prevents this outcome: if Rule 40 stands, no one but Trump or Cruz may be nominated. The bad news (and I never thought I’d call this bad news) is that Rule 40 can be rescinded, and that while Trump and Cruz have every incentive to keep it at this point, many of their delegates — bound to them by electoral outcomes, not by inclination — do not. They may vote on rules changes any way they choose.

Think what you want of these candidates: they are the fresh faces. For Rove’s strategy to work, there would have to be one or more Republican elder statesmen loved and trusted by all. There is no doubt that the Beltway Establishment believes some such person exists. But this entire election has been about the incontrovertible fact that he or she does not.

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If you don’t know why this matters, the emerging reality is that Donald Trump very likely cannot get to 1,237, the majority he needs to win the nomination on the first ballot. Losing Wisconsin would almost guarantee he can’t, and thus a contested convention.

Wisconsin has been brutal for The Donald. Some polls have Cruz as much as 10 points ahead, and even Trump placing third behind Kasich. Scott Walker’s endorsement of Ted was just one of many by Tea Party types, as #NeverTrump begins to coalesce. And Trump’s stumbles — such as his suggestion that he would criminally punish women who have abortions, that it was wrong for Scott Walker to cut government rather than raise taxes, and that the federal government’s top three priorities should include education and health care — have not helped assuage the fears of conservatives that the mogul is not truly “one of us.”

Some of the criticisms of Trump have been disingenuous at best. For example, the idea that Trump actually suggested he would consider “nuking Europe” is just fatuous. Both MSM-types and conservative pundits seem to have (willfully) forgotten (1) that Russia is in Europe, (2) that U.S. doctrine has always included tactical nukes in the middle of the Continent, and (3) that from Truman to Reagan and even Obama, no President has taken our nuclear forces off the table. And anyway, ambiguity on such matters is central to the rationale for a Trump presidency.

Still, the impression of Trump as policy challenged (if not outright liberal), and particularly as a foreign affairs nincompoop — a meme that destroyed Ben Carson’s chances in the week after Paris — is growing. And that’s becoming a real threat to his coronation in July.

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It’s also a threat in the fall. And while I’ve told you I’m pretty skeptical about the “Trump is doomed” talk, the past few weeks have been ugly.

Trump has revealed a tendency to lose sight of the main goal, and to place the short-term destruction of an opponent ahead of overall victory. Attacking Heidi Cruz epitomizes this: it was gratuitous, but more importantly, it was the sort of thing a lot of people Trump will need in November will have little desire to get over.

That’s just foolish. Trump should be putting the nomination away at this point, and drawing all parts of the party together. He’s not, and he has only his own temper to blame.

Case in point: as I told you then, Trump could have eliminated Ted six weeks ago. The script wrote itself. Two days after Antonin Scalia left this mortal coil, a savvier Donald Trump should have been on television promising that on January 20, 2017, his first act as President would be to name Ted Cruz to Scalia’s seat (“and I’ll name him Chief Justice if anything happens to John Roberts!”).

Ted, looking beaten at the time, would instantly have lost at least a third of his supporters, who would have gladly taken their cake and eaten it too. Moreover, no one could have questioned Trump on judicial appointments again.

It was a no-brainer play. Trump would have killed his main opponent with a kindness for which his most die-hard opponents would have thanked him, one Ted couldn’t have refused and couldn’t have survived. It was a layup.

Instead, Trump seems bent on harding his opposition like cement. And if that weren’t bad enough, his failure to consolidate Republicans is killing him more broadly. Trump’s unfavorable rating among likely general election voters is now 67%. That includes 85% of Hispanics, 80% of millennials, three-quarters of women and two-thirds of independents. Oh, and almost half of Republicans, many of whom were with him just a few short weeks ago.

Unless he can turn this around, Donald Trump would leave his nominating convention as the most disliked major party nominee in the history of polling. As optimistic as I am about his persuasive talents, that’s a pretty deep well. And it is an almost entirely self-inflicted wound.

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Contributing to this, of course, is last week’s National Enquirer hit piece claiming Ted Cruz is having five affairs. So what’s the latest? Every woman has denied it. Not one corroborating witness has come forward. There are no tapes, no videos, no phone records, no nothing. As Michael Savage said last week, it is exactly the sort of “dirty tricks” op Trump’s political guru Roger Stone has been engaging in since he worked for Richard Nixon. It’s a fraud.

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Oh, and as long as we’re at it, you may have seen that contra Trump’s claims, the Pennsylvania Supreme Court upheld Ted’s eligibility this week. It’s far from the first such ruling, and Ted’s won them all. I told you why here last year, and here in January (complete with video). That last one got shared several thousand times. The Birthers went nuts.

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Last week I promised I’d talk a little more about Bernie Sanders (though the most important thing I can say about him is our article below entitled “Why Is Hong Kong Rich, Cuba Impoverished, and Puerto Rico Broke?“).

Now if you’ve been reading me for any time at all, you know I’m a sucker for lost causes, even lost causes I don’t believe in. It is part of the American DNA to love the underdog: not blindly or foolishly, but seeing possibilities and opportunities where others scoff. Label me the patron saint of the Island of Misfit Toys. I am a capital-C Capitalist, not to support the wealthy thank you, but to support teenage refugees from Communism like my Ukrainian friend Max Levchin, or poor kids from small-town Arkansas like yours truly, whom freedom liberates to create something world-changing like PayPal.

That may sound sentimental — and it absolutely is — but it’s also practical. The crowd is usually wrong. I am not saying that people are dumb (as Karl Rove apparently thinks), nor am I making a statement against our republican form of government. I just mean that when your taxi driver (or Uber driver these days) starts offering stock picks, it’s time to go long cash. And their political predictive powers are even worse.

So I told you before anyone did that Donald Trump was a comer. I told you before almost anyone that Jeb! was going to wash out. I told you that a no-hoper from Texas was going to surprise everybody. In fact, my batting average all year has been phenomenal, if I do say so myself (that’s not just limited to politics either).

So about Bernie. As I said last week, it’s easy to make the case that he’s DOA. And he may be. But since March 22, Sanders has racked up five straight 70%-level wins, and a Bloomberg poll actually has him beating The Inevitable One nationally, 49-48.

Sanders has swept almost every western state (and California’s coming). His momentum is palpable. Even in New York, Hillary’s latest “firewall”, Bernie is closing the gap: down 71-23 in an Emerson College poll last month and 55-34 in a Sienna College poll a bit later, Quinnipiac now has him down just 54-42.

If Sanders can keep it close in New York — which, like all Democrat primaries, will divvy up delegates proportionally — and continue his western romp, he could absolutely win the nomination. Is it a stretch? I’ve never said anything different. But all too recently, so was a Republican race dominated by Donald Trump and Ted Cruz.

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In that vein, Bill Clinton did something very curious this week. Pressed to recuse himself from exercising his vote as a superdelegate, the ex-President defended his refusal by saying that he will vote for Sanders if the Vermont Senator comes out on top. He punctuated his remark by pointing out his vote for Barack Obama at the 2008 DNC.

Now as I always say, context is everything, so don’t read too much into this.

Nevertheless, I have been saying for weeks now that the delegate count you’re hearing is bogus, because the superdelegates can switch right up to the last instant. Counting them for Hillary is ridiculous, regardless of their pledges, because being politicians, their pledges aren’t worth a warm bucket of hamster vomit anyway. And if Sanders takes the lead among elected delegates, it’s virtually impossible to imagine they’ll be as dumb as Karl Rove and steal the nomination from him.

However inadvertently, Hillary’s husband just made that call a lot easier.

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Reports are that the FBI has wrapped up it’s investigation of Hillary’s email server, and is about to question her personally.

This is the witching hour for Mrs. Clinton. She doesn’t know what they have, regardless of whether she’s guilty. It is a federal felony to lie to the FBI, and by “lying” I mean any small inconsistency no matter how trivial. Her interview is less important as a source of information than as a wellspring of additional indictable offenses.

I am personally highly opposed to this law. It is not at all uncommon for the FBI to use it to prosecute people against whom they have no other case (ask poor Scooter Libby). It’s one of those many things that sounds good in theory but in practice is horrifying, kind of like certain people’s view that unlimited surveillance is fine “because the innocent have nothing to worry about.”

Nevertheless, I think Hillary is guilty as sin, and that it’s perfectly obvious why. If I’m right, she’s going to have a very difficult time avoiding lying. And once again, each and every lie is a potential prison sentence.

Will the FBI act? Will Obama let them? Those are the questions that are likely to determine our fate. But one thing is certain: both Ted Cruz and Donald Trump have publicly sworn to prosecute her even if Obama will not. Her only way to guarantee her own freedom is to win.

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Finally — and as I promised last week, we’ll be shifting back to more non-political stuff soon — all of the articles below are important, but none so much as John Mauldin’s piece on negative interest rates. You really need to take the time to understand this looming nightmare, which (among other things) is poised to wipe out everyone’s retirement. It must be opposed, vociferously.

You can read about the world anywhere. You come to RodMartin.org to understand it. Do your friends a favor and pass it along; and remember, there’s a lot more we publish each week that doesn’t make the newsletter.

Best wishes,

P.S. Don’t forget: we’d appreciate your input on whether Hillary should be indicted over her handling of classified information. Vote now! And see our important guest piece by my friend John Mauldin on the implications of negative interest rates, immediately below.

Negative Interest Rates: The Very Disturbing Implications

by John Mauldin

Virtually no one — including central bankers — understand the ramifications of negative interest rates. But they’re here, in several parts of the world, and may be coming to the U.S. as well. You absolutely need to read John Mauldin‘s insightful piece on this largely uncharted territory.

Do Elephants Hold the Key to Curing Cancer?

by Patrick Cox

It turns out that elephants have 20X the number of a key tumor suppressing gene that humans have. And the implications of that in an age of genetic engineering could be the virtual eradication of one of man’s deadliest enemies.

Space: The Increasingly Crowded Frontier

by Rebecca Keller

The proliferating global use of space will be a defining feature of the 21st century. Access to space will be essential in order for nations to pursue both military and economic objectives. And those depending on this technology will no longer settle for reliance on partners for access.

Why Is Hong Kong Rich, Cuba Impoverished, and Puerto Rico Broke?

by Richard Rahn

In most people’s lifetimes, the islands of Puerto Rico, Cuba and Hong Kong had roughly the same real per capita income. So why are they world’s apart today? Perhaps someone should ask Bernie Sanders.

The Battle Against Western Civ: Higher Education & Anti-American Indoctrination

by Ian Morris

The battle against the teaching of Western Civ rears its head at Stanford. But the real question is, what is the effect of the erasure of the ideas of Western Civilization from the minds of the West’s next generations? What else will be erased when that’s accomplished? And why does the left feel the need to eliminate the teaching of Western Civ to include the teaching of others?