The 1979 movie All That Jazz includes one of my all-time favorite musical performances.  After protagonist Joe Gideon (played by Roy Scheider) learns his latest movie was not well received by critics, his daughter (Erzsebet Foldi) and girlfriend (Ann Reinking) cheer him up with a song and dance rendition of Peter Allen and Carole Bayer Sager’s 1974 song, “Everything Old Is New Again.”  (NOTE:  If you’re not familiar with the film, it was directed by Bob Fosse and is semi-biographical.  SPOILER:  In one of the more ironic final scenes in cinema history, Gideon suffers a fatal heart attack after a life of chain smoking, heavy drinking and many sleepless nights.  In what might be considered a documentary remake, Fosse, in the role of Joe Gideon, passed away from a coronary in real life on September 23, 1987.)

It’s funny how the creative process sometimes is triggered by more than a single stimulus.  It often depends on a thread of seemingly unconnected events which appear somewhat circular.  One event reminds us of another and then another until we return to the original concept, but with a great degree of clarity.  I have no idea why I started thinking about this particular movie scene as I heard the the latest economic news, the gross domestic product during the first quarter of 2017 had grown at a sluggish 0.7 percent, the lowest rate in three years.

My first reaction was, “Not much of a vote of confidence in Comrade Trump.”  But that would be unfair.  His Orangeness, to date, has done absolutely nothing which could have such a impact on the macro-economy. No ACA repeal.  No tax reform.  No withdrawal from any trade agreement.  No condemnation of China as a currency manipulator.  Second reaction, “Maybe the Obama era of economic growth had run its course.”  But private sector employment is still strong.  Inflation is under control.

Then it came to me.  The “everything old” referred to basic economic and business principles.  The “something new” was the current administration’s belief it had a revolutionary program which would supercharge the national economy. (Maybe someone should tell them it is merely a warmed over version of the discredited theory of trickle down economics.)

Where had I heard that before?  At the beginning of the dotcom boom in 1995, I was staff director to the National Governors Association Committee on Economic Development and Commerce. We had invited a panel of CEOs from high technology companies, mostly from Silicon Valley, to talk with the governors about the opportunities and challenges associated with this “new economy.”  As expected, the business leaders were optimistic.  In fact, one CEO predicted the boom and bust business cycle might be a thing of the past.

Then Colorado governor Roy Romer reminded us.  “The new economy still plays by the old economy’s rules.”  To prove his point, Romer suggested the technology boom was more about speculation than traditional business metrics.  Venture capitalists were investing billions of dollars into companies which had little revenue and less profits.  They hoped to recoup their contribution, not from the profitable sale of goods and services, but through an IPO or purchase by a corporate suitor based on an equally speculative market valuation.  How did that turn out?

So, what is a possible explanation for a downturn in the economy when there has been little, if any, change in policy?  What old economy principle is in play?  The business community seems largely optimistic the new White House occupant is going to make their lives easier.  Like them, he abhors taxes.  And despises regulation.  But there is one thing they hate more than either of these perceived inhibitors to growth.  UNCERTAINTY.

And that’s where the administration has failed dramatically.  You put off business decisions if you cannot tell whether the U.S. is pulling out of NAFTA in the morning and honoring the treaty in the afternoon.  Residential developers cannot price construction if they don’t know whether the Department of Commerce is going to place a punitive tariff on Canadian soft wood.  And you certainly don’t invest in technology companies if there is the slightest chance Silicon Valley will soon be represented by a mushroom cloud rather than a semiconductor.

Since Comrade Trump seems to be a visual learner, maybe he should screen All That Jazz.  I suggest he also add Horton Hatches the Egg to the video library in the White House theater.  Not only would a member of the GOP appreciate the symbolism of a pachyderm as the lead character.  Horton could also remind Trump flip-flopping is a sign of indecision and lack of conviction.  Or as Horton constantly tells those who challenge his commitment to protecting his egg, “I meant what I said and I said what I meant.  An elephant’s faithful one-hundred percent.”  Thank you, Dr. Seuss for showing us what the anti-Trump looks like and how he behaves.

For what it’s worth.
Dr. ESP