Breakout is a commonly used term in technical analysis. Usually an entity tends to oscillate up & down between an area of support at the bottom and an area of resistance at the top. When the entity moves above the constraining resistance with power, that is usually termed as an upside breakout. Webster’s defines a breakout as a forceful break from a restraining condition.
Use either definition and you will see that this week’s actions & confidently emotive rhetoric of President Trump represent a breakout by him. He had been contained in a constraining range by his declared and undeclared opponents for the past 10 months. He had been unable to achieve what he wanted to achieve, what he had promised the American people.
The Democrats in the Congress boycotted him and the Republicans in the Congress, especially in the Senate, restrained him subtly while appearing to work with him. Their objections were couched in their principles, But in reality, they were wedded to the status quo and determined to not let their grand Old party be compromised by the agenda of the working class.
President Trump was boxed in and he had to breakout. He had to reengage with the people to break out of the constraints the Congress had imposed on him. But the first step of a breakout has to be emotive, unselfish and a uniting one. The National Football League gave him the perfect opportunity at the start of their season.
And President Trump scored a touchdown. His offensive line was the patriotic American majority that loves the Flag & the National Anthem. Against him was a defense of multi-millionaire players, billionaire owners and millionaire TV anchors. We all saw what happened – all over the country, fans burned the jerseys of the teams they had loved, shut off their TVs and expressed their outrage. Then some began to hit the NFL at its more vulnerable spot – the corporate sponsors who buy ads that pay millions to the NFL & its owners. Look at what Louisiana Sheriff’s office did:
This type of a ban of its sponsors would have represented an existential threat to the NFL. The NFL saw the light and quick came a communication from Roger Goodell, the NFL Commissioner:
- “The current dispute over the National Anthem is threatening to erode the unifying power of our game, and is now dividing us, and our players, from many fans across the country. Like many of our fans, we believe that everyone should stand for the National Anthem. It is an important moment in our game. We want to honor our flag and our country, and our fans expect that of us. … “
The key line in this communication is “dividing us … from many fans across the country“. Because that leads us directly to the fight President Trump provoked with retiring Senator Bob Corker, the current chairman of the Senate Foreign Relations committee. It was a trap and Corker fell into it by going emotionally nuts in his attack on President Trump. The base exploded against Corker and it took Mitch McConnell, the Senate Majority Leader, to put a lid on it by pacifying Corker.
This attack on Corker was not an isolated outburst from an unstable Trump. Like the attack on NFL, it was a well thought out step to isolate & divide the recalcitrant Republican Senators from Republican voters across the country. Focus on the timing of these two events and you will notice they were scripted plays at the start of the real game.
What is the real game? The passage of a tax cut and ideally a tax reform in 2018. It began this week with a vintage Trump event – a speech to American truckers in an airplane hanger near Harrisburg, PA. He won the election by his America First theme. How does he propose to win the tax cut game?
- “We want lower taxes, bigger paychecks, and more jobs for American truckers and American workers,”
Better still, listen to him pitch it in 25 seconds:
[embedyt] http://www.youtube.com/watch?v=4U4i2jzMUnI[/embedyt]
President Trump is making it clear to the Republican Senate and to Democrats in states he won. He is going straight to the people to get his tax plan passed. The Republicans who oppose him will hear directly from their voters just as the NFL owners heard directly from their fans. What does this strategy mean for the details of the tax plan? It has to deliver more income into the hands of the American middle class. In other words, it has to be a for the people plan, the type of plan old Democrats of FDR vintage would have cheered.
But the tax plan has to be the game winning drive. What about the second & third quarter drives, drives that are designed to pummel the opposition and break their spirit? Remember the opposition is elite status quo Republicans and stubborn Democrats who wouldn’t recognize the needs of their voters even if hit in the face with it.
Remember how this opposing defense had contained President Trump in the Obamacare repeal & replace drives? For his tax reform drive to be taken seriously, President Trump had to breakout of that box and score a couple of touchdowns by going over the defensive line. He did so this week.
President Trump passed two executive orders this week and accomplished what the Congressional Republicans had been unable to do for months. And he did it by bringing towards him a stubborn Republican senator who had been sidelined by saying “Rand Paul will say no to everything“. So how did Rand Paul describe the executive order enabling associations of people to get inexpensive insurance on a nationwide basis?
- “President Trump is doing what I believe is the biggest free market reform of health care in a generation – will allow millions of Americans to get insurance across state lines at an inexpensive price ..28 million people were left behind by Obamacare do not have insurance today; this specifically targets & will help people who don’t have insurance or for whom insurance is too expensive“
Listen to Senator Rand Paul explain it himself in a serious & terrific discussion with Maria Bartiromo of Fox Business:
[embedyt] http://www.youtube.com/watch?v=eeO-0PFW4Gg[/embedyt]
If this wasn’t enough, President Trump fulfilled another campaign promise this week by decertifying the Nuclear deal with Iran. Understand he didn’t abrogate or cancel the deal. He simply decertified it and passed it to the Congress for them to act on it by either putting more teeth into it or imposing more sanctions on activities of Iran that are outside the scope of the nuclear deal.
For those who watched the last Super Bowl, remember how Tom Brady brought his Patriots team to victory after being contained until the late third quarter. He ran so many plays that the Falcons defense got tired and exhausted. Notice President Trump is doing something similar to the Congress, both to the Republican Majority and the Democrat minority.
Look at the number of plays President Trump is running at them – all designed to make them stake a stand for their voters or risk being alienated from their voters – Health care insurance across state lines, end to multi-billion subsidies to insurance companies for Obamacare, Iran deal decertification, renewal of DACA in exchange for stringent border security including the wall. Each of these plays poses a big risk to Republican & Democrat Senators who are up for reelection in November 2018. In each of the above cases, they have to put in a lot of work to either pass a bill or build believable reasons for not passing it.
Has any one ever made the Senators work so hard? We don’t think so. They are going to be so exhausted by the time they have to vote on tax reform that we doubt they will be able to mount much resistance. Which is one reason why we think President Trump will win the Tax Reform Super Bowl in 2018 just as his friend Tom Brady won his super bowl against an exhausted Falcons defense in over time.
When the tax reform bill passes next year, remember the NFL-Anthem issue, the fight that launched the breakout of President Trump we saw this week.
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