Trump is up a China cold war without a plan

[Bloomberg]( Today’s Agenda - Both the [U.S.]( and [China]( need better cold-war planning. - Both [Republicans]( and [Democrats]( need better Kavanaugh responses. - Both [Facebook]( and [Google]( need better privacy protections. - Both the [economics Nobel Prize]( winners do [urgently important work](. - Both [Trump]( and the [rest of the world]( aren’t doing enough on climate change. Ad-Libbing a U.S.-China Cold War They say no battle plan survives first contact with the enemy. But what if the genius way around that is to just … have no plan? President Donald Trump may soon find out in his brewing cold war with China. On trade, he has launched tariffs and threatened more, while also calling for China to stop spying, technology theft and other corporate misdeeds. But the tariffs are dumb weapons that hurt U.S. companies and growth too; and cracking down on corporate espionage is harder than it looks, writes Noah Smith. A much more effective and straightforward approach, Noah writes, would be to convince China to [stop keeping its currency so cheap]( to boost its export. This would make global trade more fair and [curb the trade deficit]( Trump hates so much. Last week, Vice President Mike Pence laid out Trump’s broader complaints about China, on everything from military aggression to human-rights abuses. Most of this was legitimate and welcome, writes Hal Brands – but Trump [doesn’t seem to be really doing much about it](. Nor is it clear what his goal is: A new cold war? A quick-and-dirty deal that maintains the status quo, a la Nafta? “The U.S. is finally starting to say the right things when it comes to the China challenge,” Hal writes. “But it is [still struggling to do]( what is necessary to succeed.” On the plus side for Trump, China’s response hasn’t exactly been brilliant. It has pulled old policy levers, such as cutting bank reserve ratios, to stoke its production-centered economic engine. In the process, it has abandoned efforts to modernize its economy. Mohamed El-Erian writes this will [only keep China on a collision course]( with the U.S. Bonus China reading: The yuan will [weaken, but on Beijing’s terms](. – Shuli Ren The Fight After the Kavanaugh Fight The drama over Brett Kavanaugh’s nomination to the Supreme Court is over: He’s on the court now. But it will have repercussions that last a long time. And both sides of the divide are responding in ways that could hurt the country and themselves. Republicans, for one, have been gloating in ugly ways to own the libs, including mocking sexual-assault victims. Cass Sunstein warns this reaction is not only [morally wrong but politically dumb](: “One reason not to kick people when they’re down is obvious: Eventually they are going to get up, and if they’ve been kicked, they’re more likely to strike back.” For their part, Democrats must [stop talking about impeaching Kavanaugh](, writes Al Hunt, or risk stoking a backlash from Republicans and independents. Bonus Kavanaugh reading:  What my grandmother [Eunice Carter would have made of Kavanaugh](. – Stephen L. Carter In case you missed our weekend Kavanaugh coverage: - [Kavanaugh’s Victory Is a Loss for America]( – Bloomberg’s Editors - [Kavanaugh’s Confirmation Shows Republicans’ Brutal Politics]( – Jonathan Bernstein - [Collins and Kavanaugh: The Post-Truth GOP]( – Francis Wilkinson - [The Supreme Court Needs Term Limits]( – Stephen L. Carter We’re Gonna Need a Bigger Privacy Setting Pop quiz: You are a technology company that has spent the past decade or so [dealing with data-privacy nightmares](. Do you: - Apologize and sincerely mend your ways - Apologize and mostly go on about your business - Make new devices that sit in users’ homes and vacuum up extremely private data - 2 and 3 If you answered 4, then congratulations: You are probably Facebook Inc. The social-media company today released devices called Portal and Portal+, meant to help people make video calls to their Facebook friends. Shira Ovide has questions: “[T]he company has apparently decided that now is the right time to persuade Americans to put Facebook microphones, data-harvesting technologies and video cameras inside their homes. [To which I say – nope. And also, why](?” As if to hammer home the joke data privacy has become in our fabulous modern age of no flying cars but plenty of Internet-connected refrigerators, the Wall Street Journal reported Google knew of a Cambridge Analytica-like data breach affecting Google+ users – but decided not to tell anybody about it. Shira Ovide, in a second column, writes there has got to be a better way: “[W]e have to trust that Google, Facebook, Apple and others also make smart choices about the outside companies that can tap our information or that of friends – or that might break the tech companies’ rules on what information they access. [The tech companies do not deserve this trust](.” No Ivory-Tower Nobels, These This year’s Nobel prize in economics went to Paul Romer and William Nordhaus. Though Nordhaus is most famous for his work on climate change and Romer on economic growth, [the two complement each other](, writes Tyler Cowen: “Both Nordhaus and Romer are concerned with the total size of the economic pie — growing it as well as sustaining it.” Noah Smith writes that Romer’s work highlights how much [developed nations need to ramp up R&D spending]( to boost productivity and future growth. The welfare of the world depends on it. Bonus Nobel reading: This year’s Nobels in medicine and science highlight the [best and worst features]( of the pharmaceutical industry. – Max Nisen Trump Embraces Climate Change A new United Nations Intergovernmental Panel on Climate Change report released today warns severe climate-change disaster [could be right around the corner](. The report highlights just how [weak the Paris climate agreement](’s global-warming targets really are, Bloomberg's editors write. The world’s governments must ratchet up their ambition when they meet to review the accord in December. And it would help a lot of the Trump administration would join in. Right now, Trump’s approach to climate change is to [declare disaster inevitable](, so we might as well keep burning fossil fuel, writes Faye Flam. Bonus editorial: Europe’s [approach to migration is a failure](. But it can be fixed. Chart Attack Wells Fargo & Co. CEO Tim Sloan just celebrated two years on the job. They have been [failures in just about every way](, writes Stephen Gandel. Retailers may have good holiday sales, but [don’t expect their stocks to benefit](, warns Sarah Halzack. The hedge-fund herd could [stand a good thinning](, writes Nir Kaissar. Quick Hits The executive [Elon Musk most resembles is Steve Jobs]( – with one key difference: Jobs grew up. – Joe Nocera Trump’s avalanche of scandals is overwhelming, but we [have to keep up with them](. – Jonathan Bernstein Just in time for election day, [gas is $3 a gallon]( – thanks to Trump’s Iran sanctions. – Julian Lee But Trump’s approach of threaten-break-rebrand may lead to [a new Iran deal](. – Hussein Ibish Puerto Rico’s new [debt-restructuring plan]( is doomed to fail. – Antonio Weiss, Brad Setser and Desmond Lachman A $2 trillion Saudi Aramco is [even less realistic today]( than it was three years ago. – Liam Denning The new government in Iraq [deserves better U.S. support](. – Eli Lake Banksy’s [self-destructing painting]( shows his true genius is in economics as much as art. – Leonid Bershidsky ICYMI Bonds [lost $916 billion]( in value last week. Brazil’s possible next president [has some, uh, thoughts](. The climate apocalypse is coming; might as well [make some money on it](. Kickers Today in inventions I didn’t know I needed: a new font designed to [boost your memory](. (h/t Ellen Dickstein Kominers) Paul Romer [didn’t answer his phone]( when the Swedish Royal Academy of Sciences called him this morning to tell him he’d won a Nobel prize, thinking it was a “spam call.” What do numbers look like? In one way, very [weird galaxies](. (h/t for the past two kickers to Scott Duke Kominers) Maybe humans [didn’t just evolve in one spot]( in Africa. Why does [Tom Hardy keep trying to hide]( his face? Note: Please send Nobel prizes, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net. 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