Friday, May 25, 2018

Trump Says North Korea Summit May Be Rescheduled

President Trump spoke to reporters before departing the White House on Friday.CreditEric Thayer for The New York Times
WASHINGTON — President Trump said on Friday that his administration was back in touch with North Korea and the two sides may reschedule his summit meeting with Kim Jong-un, perhaps even on the original June 12 date, a stunning reversal just a day after the president canceled the get-together.
“We’ll see what happens,” Mr. Trump told reporters. “It could even be the 12th,” he said. “We’re talking to them now. They very much want to do it. We’d like to do it. We’ll see what happens.”
Mr. Trump indicated that he was pleased with a conciliatory statement released by North Korea after his decision on Thursday to scrap the summit meeting, and he brushed off concerns raised privately by his staff and publicly by his allies and adversaries alike that Mr. Kim was playing him.
“Everybody plays games,” he told a reporter. “You know that.”
The president’s comments were the latest head-spinning twist in a diplomatic dance that has played out unlike any in recent years. After threatening “fire and fury” against North Korea and dismissing Mr. Kim as “Little Rocket Man” last year, Mr. Trump abruptly accepted an invitation to meet — and with little consultation with his advisers.
He just as suddenly called off the meeting on Thursday morning after North Korean officials failed to show up for a planning meeting in Singapore and issued a statement calling Vice President Mike Pence a “political dummy” for suggesting that Mr. Kim could meet the same grisly fate as Libya’s Col. Muammar el-Qaddafi if he did not give up his nuclear weapons.
But Mr. Trump still gave the impression of someone eager to pursue a relationship and a deal that he has mused could win him the Nobel Peace Prize. And North Korea picked up on that by reacting calmly to the cancellation, issuing a statement saying that “with a broad and open mind, we are willing to give the United States time and opportunity” to come back to the table.
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Mr. Trump responded positively on Twitter on Friday morning. “Very good news to receive the warm and productive statement from North Korea,” he wrote. “We will soon see where it will lead, hopefully to long and enduring prosperity and peace. Only time (and talent) will tell!”
At the same time, he accused Democrats of hoping for failure. “Democrats are so obviously rooting against us in our negotiations with North Korea,” he wrote.
Democrats denied that but lamented what they called the chaotic handling of the situation.
“This is pretty haphazard process that we’ve seen,” Senator Tom Udall, a Democrat from New Mexico and member of the Senate Foreign Relations Committee, said on CNN. “The president seems to be functioning more along the lines of a high stakes real estate deal with intimidation and pain and then trying to get an agreement.”
“Diplomacy’s much more difficult,” he added. “It’s not a win-lose like real estate. You’ve got to find a win-win.”
Mr. Udall rejected the notion that Democrats hope for failure. “I’m never rooting against our country and a president reaching an agreement that’s in the best interest of the United States of America and I want to see that happen,” he said. “I’m not so sure the way this was approached that they have a strategy, they have the discipline, that they were going to pull it together and do this in a diplomatic way.”
In speaking with reporters on the South Lawn of the White House on Friday before departing for Annapolis, where he planned to address the commencement of the United States Naval Academy, Mr. Trump deflected questions about the arrest of Harvey Weinstein, the Hollywood mogul charged with rape.
“I don’t know, I’m not familiar with the case,” he said. “But it’s really too bad, it’s really too bad.”
He did not respond to questions about the F.B.I. informant who contacted some of his campaign advisers during the 2016 presidential campaign, but before leaving the White House issued a string of accusatory Twitter messages asserting that it was part of a political plot against him.

“Can anyone even imagine having Spies placed in a competing campaign, by the people and party in absolute power, for the sole purpose of political advantage and gain?” he wrote. “And to think that the party in question, even with the expenditure of far more money, LOST!”
An informant working for the F.B.I. contacted three campaign advisers as part of an investigation into whether Russia was interfering in the American election. No evidence has surfaced suggesting that it was inspired by the party in power. James R. Clapper Jr., the former director of national intelligence, has said neither President Barack Obama nor his White House knew about the informant.

Trump Next!

Turmoil for Turkey’s Trump

Paul Krugman
Opinion Columnist
President Recep Tayyip Erdogan of Turkey with his wife, Emine, greeting supporters in Ankara on Thursday.CreditAdem Altan/Agence France-Presse — Getty Images
An anti-establishment leader takes power after a contentious election. His administration quickly proves itself remarkably corrupt; but he subverts the legal system and is able not only to suppress investigations into his corruption — his supporters denounce it all as a “witch hunt” — but also to consolidate his rule and undermine institutions (the “deep state”) that might have limited his power.
Am I talking about Donald Trump? I could be. But the figure I actually have in mind is Recep Tayyip Erdogan, president of Turkey, whose success in getting away with obvious corruption by politicizing law offers a disturbing preview of how Trump may become the authoritarian ruler he clearly wants to be. Not surprisingly, Trump, who basically seems to like dictators in general, has expressed admiration for Erdogan and his regime.
Authoritarian instincts and contempt for rule of law aren’t the only things Erdogan and Trump have in common. Both also have contempt for expertise. In particular, both have surrounded themselves with people notable both for their ignorance and for their bizarre views. Erdogan has advisers who believe that he is under psychic assault; Trump has advisers who yell profanities at each other while on trade missions.
But does it matter? In America, stocks are up and the economy keeps chugging along. Erdogan has presided over an actual economic boom. Investors and markets don’t seem to mind the craziness at the top. The fact that economic policymakers have no idea what they’re talking about doesn’t seem to make any difference.
Until it does.
The truth is that most of the time the quality of economic leadership matters much less than most people — economic leaders included — believe. Really destructive policies, like those driving Venezuela into the ditch, are one thing. But run-of-the-mill policies like changes in tax law, even if they’re pretty big and clearly irresponsible, rarely have dramatic effects.
Last year, for example, Trump and his allies in Congress rammed through a nearly $2 trillion tax cut. That’s a pretty big number, even for an economy as large as ours. But aside from fueling an unprecedented wave of stock buybacks, the tax cut is having little discernible effect, good or bad. There’s no sign of the investment boom advocates promised, but there’s also no sign that investors are losing faith in U.S. solvency.
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Basically, as long as the economy isn’t being hit by major shocks, political posturing hardly matters. Someone looking at U.S. growth in G.D.P. or employment over the past few years who didn’t know we’d had an election in 2016 would have no reason to suspect that anything important had changed.
But when big shocks do hit, the quality of leadership suddenly matters a lot. Which is what we’re seeing in Turkey now.
An aside: Even if the quality of economic leadership matters a lot only during crises, you might expect markets to think ahead and incorporate the risk of badly handled future crises into stock and bond prices. Somehow, though, that almost never happens.
What we get instead are long stretches of complacency followed by sudden panic. Students of international macroeconomics are fond of quoting “Dornbusch’s law” (named after my late teacher Rudiger Dornbusch): “Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine.”
What’s happening in Turkey is a classic currency-and-debt crisis, of a kind we’ve seen many times in Asia and Latin America. First, a nation becomes popular with international investors and runs up substantial foreign debt — in Turkey’s case, largely debt owed by domestic corporations.
Then it starts, for whatever reason, to lose its luster: Right now, emerging markets in general are being weighed down by a rising dollar and rising U.S. interest rates. And at that point a self-reinforcing crisis becomes possible: External factors cause a loss in confidence, which causes a country’s currency to drop, but the falling currency causes the domestic value of those foreign debts to explode, worsening the economy, leading to further declines in confidence, and so on.
At such a time, the quality of leadership suddenly matters a great deal. You need officials who understand what’s happening, can devise a response and have enough credibility that markets give them the benefit of the doubt. Some emerging markets have those things, and they are riding out the turmoil fairly well. The Erdogan regime has none of that.
So is the turmoil in Turkey a preview of what will happen under Trump? Not in detail: Although America borrows a lot abroad, it borrows in its own currency, which means that it isn’t vulnerable to a classic emerging-markets crisis.
But there are lots of ways things can go wrong, ranging from foreign policy crises — that Nobel Peace Prize doesn’t look too plausible now, does it? — to trade wars, and it seems safe to say that the Trump team isn’t ready for any of these possibilities. Maybe it won’t have to deal with any really serious challenges. But what if it does?
Follow me on Twitter (@PaulKrugman).
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