So, Trump’s tariffs are out. He claims they’re half of what each country tariffs the US, but in fact they appear to have been determined by dividing how much the US sells to a country by how much that country sells to the US.
In other words, the more your trade surplus is, proportionally, the higher the tariffs.
This isn’t, on the face of it, necessarily stupid. But… it’s being done very stupidly.
The first problem is the most fundamental: much of what the US buys it can’t make or grow or dig up itself. New capacity takes time, so in cases where the US could in theory make whatever it is, tariffs should either be phased in, or there should be a delay “in two years the tariff will be X%.” As it stands, in a lot of cases, all this is going to do is make Americans pay a lot more.
Then there are things that the US can’t produce itself, or produce enough of. Potash from Canada, for example. The US can’t produce enough. Period. And farmers MUST have it.
So this means that there’s going to be a massive economic shock: prices will go up and/or profits will go down and the US government will need to provide massive subsidies to some industries at the same time as Trump’s budget plan massively cuts revenue due to tax cuts for the rich.
The tariffs on each country should have been individually determined based on what America buys from them, and what America sells to them. If it’s something the US can’t make, or given opportunity costs shouldn’t make (do you want to build more power plants for AI, or use it for aluminum?) then those things shouldn’t be tariffed. And if you’re buying what you really need from them, and can’t make yourself or shouldn’t (Canadian potash and aluminum, for example) then why are you tariffing? The Canadian example is a good one: Canada imports more manufactured goods from the US than it exports to America. Tariffs encourage Canada to buy less goods and re-industrialize, reducing demand for American goods and encouraging American de-industrialization.
Instead of selling goods to Canada, made using Canadian primary and secondary resources like wood and aluminum and hydro power, America is encouraging Canada to use its own resources to make its own goods. I mean, as a Canadian I think this is great and I’m very grateful to Trump, but this is stupid, really stupid, of Trump for America.
The second issue is that that one goal is to get foreign companies to buy American goods. But most American goods aren’t price competitive, especially not with China. Add on top of that the retaliatory tariffs which most countries are going to respond with, and the likely end result of this isn’t countries buying more American goods, it’s them buying less.
Now some countries are in a different situation. The EU, for example, is very vulnerable here. They have a massive trade surplus with the US, and it’s in goods and their goods are more expensive than Chinese goods, so they’re fucked: who are they going to sell to if they won’t sell to America?
The EU trade surplus is about 600 billion. America sells the EU more services than vice versa, by about 100 billion, however, so the combined services and trade surplus is around 500 billion. Yet if you drill down to balance of payments overall, it’s closer to 200 billion: the US gets a lot of investment income and other streams from Europe, for example, all those patent and copyright payments, 30% at app stores, etc, etc…
A 200 billion dollar balance of payments deficit is about 1.2% of the EU’s GDP. The correct action for the EU is to hit the US hard on services and income: tax the hell out of that and just get rid of it it in some places. Break the DMCA and set up their own app stores, for example. The screams from Silicon Valley would set off Richter 7 earthquakes.
Let’s look at another country. Japan, has a 68 billion goods trade surplus, about a 25 billion services deficit, and actually gets about 50 billion in misc payments from the US. They’re rolling in it and actually much more vulnerable than the EU because of all that payment income, which is easily disrupted. It’s hard for them to retaliate and not come out hurting bad. But there are reports they’re coordinating their response with South Korea and China, and if true, it makes sense, since they have little leverage alone.
China’s trade surplus with the US is now about 1.8% of GDP. Most Americans think it’s still 2008. It’s not. China will be fine and that’s why their official response has been, in essence, “if you want a trade war, let’s have a trade war.”
Generally speaking the correct response for most countries (but not Japan!) is going to be to go after payments: copyright, patents, app stores and so on, and to tax services.
And this leads to third issue: hitting everyone at once. This allows coordination. If the US had just hit a few countries, everyone else would keep their heads down and hope to be ignored. One country, alone, breaking patents say, or getting rid of DMCA compliance and breaking US app stores, would be crushed. But if it’s done in a coordinated fashion, the US is toast. They can’t sanction everyone, the US financial system will just be treated as damaged and routed around. A universal clearing currency is NOT needed. In fact, for a variety of reasons, it’s one of the worst things possible. Make the deals in local currencies. Done.
Additional add-ons to all of this include the probability of a lot of free capital flows going away. Countries that want to re-industrialize with domestically controlled supply chains, and many now will, need to keep capital at home and the retaliation against the US is going to be against a capital flow/investment system which has, with a few exceptions like Japan, mostly favored the US.
I can’t even imagine how much US property in other countries is likely to wind up forced to sell to locals, or even nationalized outright.
All of this leads to the fact that this will speed up the loss of dollar privilege, and with the loss of dollar privilege and everyone reluctant to sell to America, well, there’s no way that the US standard of living doesn’t get hit hard.
There’s a lot more to say on this. The US is counting on countries needing to sell to it. The Chinese have far more manufacturing capacity than anyone else and a cheaper cost structure. This leaves places like the EU fucked, hard. They can’t really sell to the US profitably. They can’t sell to China because their goods are too expensive. They don’t have a lot of resources to sell except food.
The correct response is to move to internal demand and collapse the cost structure (rent, housing prizes, all monopoly pricing, etc…) but neoliberal policies don’t allow that, so they’re going to try military Keynesianism, but that won’t work well either.
Truly screwed if they don’t get their heads out of their asses and ditch neoliberal bullshit, start taxing the rich, and figure out their energy situation.
But, they, they have it coming.
Long story short: the US is going to be hit by a huge inflationary shock, a decline in standard of living and, unless other countries are stupid, lose most of its overseas rentier monopoly income. The EU is in for a world of hurt, but has options. China will feel it, but they’ll be fine, they don’t need the US as a market any more.
In the longer term this might lead to improvements in the US economy: it will force reshoring, it’s just doing it in the stupidest way possible. But the US risks winding up in semi-autarchy, with an oligarch controlled economy, authoritarian but ineffective politics (think Yeltsin) amid a huge collapse of standards of living, even as it destroys its scientific and academic communities.
The road back will be a hard one and the suffering in between will be massive. And all this assumes that the political problems in America don’t boil over into civil or serious foreign wars.
Americans aren’t going to take a one-third reduction in their standard of living well, especially when so many of them are just a few hundred dollars a month away from homelessness.
Welcome to the end of the American century.
bruce wilder
The American political economy is structured by and for people exploiting the legacy of American global hegemony. That hegemony is evaporating, but the structures and, in a Marxist sense, the class consciousness that goes with it, remains as a fragile, dysfunctional empty shell. The people, who knew how to operate American hegemony, to serve themselves a slice of everything, are now left to “operate” a rusting hulk in which the engine has seized and the gas tank is empty.
Simply shifting gears on the hegemony engine to smoothly transition to traveling a different, but still paved highway, is not a realistic option. A shock to the system, on the most fundamental levels, has already been administered by reality. Pulling madly and comically on levers now that have been used quite differently and methodically for the 70+ years the hegemony machine was in working order is simply a desperation ploy.
This play may be a farce. America needs not just a better driver, but a working vehicle to drive. The fundamental problem is the failed vehicle, not the clown in the driver’s seat.
Joan
I read JMG’s book Collapse Now and Avoid the Rush right as I attempted to emigrate for the second time. Now I’m Stateside gearing up for that third attempt and I’m hoping these shockwaves don’t keep me here.
DanFmTo
Europe’s elites, for better or worse are going to be replaced, mostly by extreme right wingers it seems. I suspect that only accelerates Europe’s demise as a global power since right wing forces will misdiagnose the problems and sure, they’ll break with neoliberalism but not in ways that are particularly useful. Immigrant purges and culture war.
Failed Scholar
Watching the Stonk Market™ eat shit this morning makes it all worth it. Honestly, if he destroys the US empire along with the neoshitlibs he will be doing all of us a giant fucking favour.
Also Ian, typo: “The EU trade surplus is about 600 million. ” You forgot some zeroes, or your figures come from Evil Medical School
NR
Ian, it’s even stupider than you think. There’s a chance that Trump’s tariff formula was created by ChatGPT.
https://cointelegraph.com/news/trump-tariff-rate-formula-replicated-chatgpt-observers-claim
NR
Actually the more I look at this, the more I’m convinced that this tariff formula did come from ChatGPT. There are two uninhabited island groups on there, one of which the U.S. rents a military base on. They definitely got this from ChatGPT.
bruce wilder
People mostly do not understand economics. Attribute that to the civic mythologies of neoclassical “Econ 101” and the self-justifying arrogance of libertarian ideologies if you like, it does not make it easy to find an effective rhetoric to build support for an effective political program for a new American or European economy.
I am inclined to agree with Ian that the most likely outcome is a crash of the American economy very painful for the working and middle classes. But, I am assuming that the crash will be made painful by the political powers that be. That aspect of the situation is worth paying attention.
Almost all the economic benefits of U.S. economic hegemony have been channeled upward. All the structures of intellectual property rentierism and the leveraging of industrialization to generate cash flow and so on — these do not benefit the vast majority of the population. These collapsing structures directly undermine the economic foundations of the oligarchy and indirectly the military industrial complex, the surveillance state and FIRE. It is because the powers that be have been preparing for this day, that we can be sure that just as building these structures did not benefit the majority, so the majority will be made to suffer the “cost” of their collapse. It is not that any benefit will be taken away from those in the generality, who never benefitted much to begin with. It is that the oligarchs will cram their own losses down the throats of the general population.
bruce wilder
leveraging of DEindustrialization
damn autocorrect
GrimJim
Whenever Trump acts, we are reminded that we are living in the Stupidest Timeline.
That the tariff rates are based not on tariffs but on trade deficits… that would be so hilarious, were it not showing just how stupid Trump and his people are.
This is what you get when you closet yourself with uneducated sycophants, none of whom ever took Econ 101, let alone know how to balance their own checkbooks.
This is what happens when you come to depend on loyalty rather than expertise.
Sadly, it will also showcase everything I’ve said about how ramshackle the whole system is. Collapse will continue to accelerate, which will bring about more stupid responses, which will accelerate collapse further, and so on.
If Musk is able to keep on with DOGE through the end of May as he originally claimed he would, he will continue chopping away at any department that remains effective in controlling the collapse.
If we are lucky, he will realize that his wealth and power are collapsing even faster, and bail on DOGE to try to perform damage control. Hard to become master of a techno-state if you do not have the wealth and power remaining to do so…
But all his bailing on DOGE will do is slow down the collapse slightly. The worst of the damage is done.
In Blues Brothers terms, we are now at the point where the engine is still running but blowing oil onto the windshield.
Soon, all too soon, we will get to the point where the whole system is going to blow.
Then the car stops, Trump and Musk and their coterie of villains jump out, and the whole car just falls to pieces as they flee…
Unfortunately, the rest of us are stuck depending on that car…
Mark Pontin
Ian: ‘In the longer term this might lead to improvements in the US economy: it will force reshoring, it’s just doing it in the stupidest way possible.’
Not even that.
[A] It’s 2025. If after 2025 factories returned to the USA, they’d be automated. We’ve discussed this, but look up China’s factories and the figures on numbers of people they employ. Globally, manufacturing employment, jobs, and salaries are going the way agricultural employment did. In some modern factories, they don’t even waste money on lights inside them and they’re kept dark, because only machines are in there.
[B] Still, the necessary expertise and technology to automate factories are to a large extent Japanese and Northern European. So building such factories in the US might be theoretically feasible while the US dollar remains worth anything.
Granted, in practice that would do nothing — zilch, zero, nada — to bring manufacturing jobs back to the US. ‘But so what?’ some of the brighter minds in the Trump administration may have said to themselves. ‘We’ll have reshored manufacturing and the US will be geopolitically secure as a result, which is what we care about.’
Nah.
Firstly, building such factories would be extremely capital intensive. How would the companies building them recoup their investments as overheads rise and the dollar collapses and the ranks of the US unemployed grow? People would need to have salaries to buy the products these factories will produce, after all
Secondly, we know it’s not going to happen because it hasn’t already. With all the money the Biden administration’s IRA threw at the problem, efforts to rebuild manufacturing in the US have already ground to a halt now that the free government money has stopped. In other words, no company is willing to do it on their own dime.
Furthermore, buildings these modern factories would require a multi-year investment on any company’s part; businesses always needs reliability and particularly so in the case of these kinds of investments. And yet the US under Trump is completely unreliable and untrustworthy.
The thing about trust, of course, is that once it’s gone, it’s gone. So now that the US under Trump has stabbed everybody in the back, anybody who trusted the US again would be a fool, wouldn’t they?
Mark Level
I appreciate Ian’s ability to parse out the economics data, something that for the most part makes my eyes glaze over. Both my parents were Econ majors in college. I was forced to teach it once by a principal who was out to get me (I was one of 6 people later instrumental in getting him fired, after 2 newspaper stories about his abuse of students and staff.) I did my best, I taught the basic math shit, and I used videos and other resources to question the US rampant inequality– midway thru the gig I got the Librarian job I wanted at the same school (which the Principal kept open for months to try to block me) & walked away uninjured. I also appreciate all the commenters here who can correct or expand on data that Ian shares.
I’m better at understanding political narratives, seeing through lies, and following the Elites based on what they DO, not what they say.
I am very heartened, chuckling wildly, that the billionaire insult comedian who somehow tricked the American working class (that which remains) into supporting Republican Oligarchs & Rentier robbers who will drive them into miserable serfdom.
I can only compare that to my sniggering disgust at the Libs who thought the Dems were “Left” and “on the side of minorities” while Segregation & Genocide Joe was the Presidential figurehead, one who while running in 2020 bragged of his warm friendships with the likes of James Eastland and Strom Thurmond, & pledged that if elected he would VETO any attempt to defund abusive Police departments.
One thing I do know about economics. Obama’s betrayal of ordinary people after the ’08 Greenspan-Summers Crash meant the biggest losses to black household wealth and equity ever seen in the US in its entire history over the following 8 years, well-documented by many sources.
When I was a youngster living in Louisiana in 1980, one of my Southern co-worker explained to us what a “Judas Goat” is– per the folklore they are trained to walk their fellow goats into an abbatoir, the JG exits safely, the goats become goat meat! Even at the time I thought the term and story had a stench of anti-Semitism to it.
Be that as it may (& I know the DC class fans will disagree with me) it is now fully evident to anyone capable of paying attention that people like AOC, Corey Bush, or Lindsey Graham are recruited to the Duopoly “teams” for purely symbolic reasons to attract a certain demographic– exactly the demographic that will be betrayed by them and (at best) starved or (at worst) fed into a wood-chipper.
To get specific just on the 3 mentioned– AOC, the smart, “working class” Latina who cried about the Kids in Cages under Trump, shed not one tear and utterly dropped the issue once Joe was separating children and ruining their lives. Corey Bush, “a black man” who took massive $$$ from Reed Hastings, Bill Gates and other scum to privatize the New Jersey schools via charter schools, destroy teachers’ unions (but never Cop unions, those are sacrosanct, even when Scott Walker was smashing all other Wisconsin unions) so better-connected students (does that skew white? I’d expect so) get a first-class education and the majority gets drill & kill brainwashing. For Lindsey Graham, a frothing at the mouth militarist wanna-be butcher who whips up wars everywhere (perhaps to compensate for his effeminate, mincing affect) so poor ‘Muricans can get fed into a wood-chipper in Syria, Afghanistan, Ukraine as mercenaries, or wherever. No skin off his pretty little button nose!!
Whether there were really Judas Goats or they”re as imaginary as the Chupacabra, the Political Corps are excellent J.G.’s Will their marks ever wise up? I think when everyone is hungry, homeless and angry, there may be some blowback . . . then again, I dunno if ‘Muricans can ever stand on their own 2 feet and become Citizens instead of mere consumers. But they have a very short time to maneuver that learning-curve and “Eat the Rich” instead of being consumed by them.
different clue
Secondary and tangential but maybe not totally irrelevant . . . high concentration potash (potasium) ore is necessary for making chemical potassium fertilizers . . . potassium nitrate, potassium phosphate, potassium chloride, etc. And these are necessary for radically overmechanized petrochemical agribusiness. But are they necessary for traditional or organic or other eco-correct approaches to agriculture?
Here is an article about a fading-away traditional form of meadow-for-livestock farming still practiced in Romania. As far as I know it requires zero imported potash fertilizer chemicals. And if “potash fertilizer” becomes a thing of the past due to unaffordability, then this approach to agriculture could become default-viable all over again. In Romania, in America, and everywhere else that “potash fertilizer” disappears from.
Here is the link.
https://www.theguardian.com/environment/2025/apr/03/romania-carpathians-farming-nature-conservation-wildlife-rich-hay-meadows-aoe
different clue
If these Trump tarriffs make part of the American economy more fragile and brittle, and also make more fragile and brittle certain foreign economies whose increased brittleness and fragility could further increase Americanomic fragility and brittleness; then this is a good time for activists to look for weaknesses to turn into cracks, cracks to turn into breaks, breaks to turn into separations and so forth.
In that spirit, here is an article called ” Elon Musk and Tesla: A Fact Sheet for
Activists”. It will certainly help people achieve and maintain a hard and enduring hate-on. It may also offer a little bit of indirect information on how to destroy and exterminate Musk’s businesses and money –hence power. Here is the link.
https://redflag.org.au/article/elon-musk-and-tesla-a-resource-list-for-activists
Here is a sad fact to face. “America” as a country has no democracy and no legitimate government. The Trump Regime is an Occupation Regime, perhaps working for whichever foreign enemies or movements have kompromat on Trump, perhaps working for the Upper Class, or perhaps working for ( insert favorite villain here). Individual American states and regions may have legitimate governments, but America does not.
And so, there is nothing immoral or even seditious about offering thoughts on how to topple the Trump Regime. Now is a good time for people of all sorts and persuasions to try to use this opportunity to tear down the upper reaches of the Americonomy so fast and hard that the “traditional Overclass” if it even exists anymore can somehow get the Armed Forces to terminate the Trump Regime and delete Trump and all his major Trumpists with whatever force is required. If all the stock markets can be taken all the way down to ZERO and KEPT THERE long enough to torture the Overclass into action, action might be taken.
someofparts
We keep talking about economic collapse but it’s worse than that. We are heading into a dark age. The idea that collapse will produce another FDR is appealing, but maybe more likely to produce a Stalin.
I have indulged the hope that as the nation goes broke, so will our military and the attendant capacity to threaten others, and I’m thinking in particular of our southern neighbors in this hemisphere. The Chinese port in Chancay has opened and Trump has already obliged Ecuador to let us station military there to threaten the development. My hopes are probably too idealistic so I guess I will watch what happens and hope for the best.
mago
Magic man strikes another blow felt around the world
While the rust belt cheers for rain
As piss drizzles down on their heads
And the billionaires wink and nod to the blind horse who whinnies—it’s all the same to him after all
In the streets and alleys rats stumble around eating garbage while the homeless starve and rot in fentanyl parks
Who knows who gives a good goddamn, just don’t let anyone know what you really think about, oh, say genocide because. . .
Tarifas is a splendid spring time destination. So let’s hit the beach and lose our minds and all our sense and inhibitions. Life’s a cabaret. . .
That’s all. Thanks.
bruce wilder
Mark Pontin makes a valuable point, but I am not sure it has the implication he thinks it does. The secular evolution of process manufacturing away from the mass-employment of large-scale Fordist production toward even more highly automated systems has been going forward steadily for over 100 years now.
It isn’t always clear what the implications are for patterns of employment and industrial organization. I don’t want to encourage fantasy projection but it hasn’t always been clear what the implications are for the scale and organization of the train from design-thru-marketing. Brewing beer was long dominated by a relentless pursuit of scale. Now, boutique IPA brands are a thing. Smartphone production has scaled to dizzying heights, but they could very easily become almost artisanal. The scale of entertainment production has shrunk dramatically down to a scale that allows creators on social media to sustain themselves.
I would affirm that China has a huge advantage now, difficult to overcome, but I would locate that advantage in the deep networks of expertise and services that enable advanced product and process development. Germany and Northern Italy once excelled in maintaining deep networks, in part with cultures and educational schemes that supported and honored careers in technical expertise and tool making.
The U.S. has devalued such training in line with neoliberal doctrines. The time to make and sustain investments do not seem to me to be as large an obstacle politically as the obstinate refusal of the oligarchs to let go of the political power that concentrates economic gatekeeping power in their hands. I think without China, there may not be much reason for Amazon and Walmart but they won’t go down with a very destructive fight if they go down at all.
someofparts
and speaking of how these spill over onto Canada –
https://www.youtube.com/watch?v=wT_n4Khmq0o
mago
Boiling water
Boiling frogs
Boiling eggs
Boiling lobsters
Boiling over
Nobody saw it coming until we all screamed out in pain
Revelo
>Europe’s demise… Immigrant purges and culture war.
If you want to really understand USA and European support for Israel, it’s because Israel is providing a role model to emulate. Both Americans and Europeans are timid about race/ethnic extermination schemes because of how the Germans got their hands burnt with Nazism and Southern USA whites got theirs burnt with the Confederacy and Civil War. So they need someone to show them how to do the job “properly”, meaning without blowing themselves up in the process. Of course, IMO, Israel is also likely to eventually blow themselves up, but that isn’t obvious yet.
Revelo
>maybe more likely to produce a Stalin
What was so bad about Stalin? The Ukrainian Holodomor was more the result of incompetence among the Ukrainian communist cadres (possibly aggravated by some deliberate malice by Jews who dominated among the Ukrainian Communist cadres and who historically hated the Ukrainian peasants because of the history of pogroms , which in turn were provoked by the use of ruthless Jews as tax collectors against those peasants by pre-revolution Polish/Russian aristocrat land owners). The famous purges were mostly of people who deserved to be purged, equivalents of the modern PMC intemallectuals and hack journamalists who’ve promoted financialization, deindustrialization, monopoly, concentration of wealth and other ills in the USA. It certainly wasn’t ordinary workers who suffered under Stalin, because their standard of living skyrocketed after accounting for WW2 destruction. A Stalin who sent huge numbers of propagandists to the gulag and engaged in forced reindustrialization would be an unbelievable blessing. Or a Mao who unleashed a Cultural Revolution whereby all NYTimes columnists were condemned to work in meat packing plants and other grueling physical labor jobs for 5 years: what a cause for celebration that would be! It’s not Stalin we have to fear but rather a typical banana republic dictator, ala Papa Doc Duvalier or Trujillo or Batista, etc.
Failed Scholar
https://www.reuters.com/business/world-economic-forum-founder-klaus-schwab-step-down-chair-trustees-ft-reports-2025-04-03/
If Trumpolini manages to shank WEF ‘Davos man’, I will personally donate my Burger King coupons to help build a statue to him in Davos.
Mark Pontin
@ Bruce Wilder –
You write: ‘I am not sure (the point I make about AI and automation) has the implication he thinks it does.’
Any implications I think my point has are pretty much there in my comment as is, since large areas of the potential future are a gaping Unknown at the moment with so much in play globally.
Yes, for instance, ‘Smartphone production has scaled to dizzying heights, but they could very easily become almost artisanal’. In other words: maybe ‘semi-artisanal’ centers of AI-centered automation could *theoretically* be set up in the future US.
That’s why I note the *theoretical* possibility that much of the automation tech and expertise Chinese factories employ was imported from Japan and North European countries. In fact, something I also put in my original comment but then excised as extraneous was that even the UK (where I now am) could *theoretically* bring back manufacturing with modern automated factories.
But is it likely? Generally, it would be too capital intensive for it to be worth it for most businesses. So the UK (for instance) would need to do it by government edict for whatever geopolitical security it would provide. And if they did, there’d still remain the problems of (a.) the costs of the raw material inputs into these automated factories and (b.) where the chips that run the automation derive from, since building any kind of FAB is extremely capital and knowledge-intensive. (We Don’t Do That Here, in other words.)
So then, is it likely to happen in the US? On the one hand, the people in charge under Trump seem to truly believe in the Magic of the Market — that glorious, unfettered Exceptional American capitalism will magically deliver answers to all problems. On the other hand, they were promoting the whole top-down Stargate AI initiative for a putative $500 billion — till DeepSeek and other Chinese LLMs demonstrated you could build LLMs for a fraction of the costs, and China has the technical lead.
We will see.
You also note: ‘The secular evolution of process manufacturing away from the mass-employment of large-scale Fordist production toward even more highly automated systems has been going forward steadily for over 100 years now.’
Well, sure. But here’s this study from the Brookings Institute —
‘The geography of generative AI’s workforce impacts will likely differ from those of previous technologies’
It claims: ‘Generative AI is not your grandparents’—or even your parents’—automation. Most notably, the possible impact patterns of generative AI look quite different from those of previous forms of automation.’
It looks, essentially, like exposure to AI-driven obsolescence rises with wage levels in the US and where earlier automation hit the working and lower-middle classes harder and boosted the PMC and white-collar professions, this will do broadly the opposite except for the top performing 10 percent of elites who’ll be able to use AI to augment their performances and incomes.
To conclude, I know we’re all used to treating that old Keynes essay from 1930 , ‘The Economic Possibilities for Our Grandchildren’ as conceptually interesting but
in reality, of course, only that — a just-so story without any real-world relevance any time soon. Still, circa 2030 is precisely when Keynes predicted technological advance would broadly destroy many of the existing rationales for the social structures of (employment, profit, etcetera) that humanity has built its social structures around.
If Keynes was right, then I struggle to think of a country and a population more unsuited to deal with the centrifugal pressures about to hit it than the US.
Mary Bennet
You have it wrong, NR. Being mean to penguins shows off how tough, not like those lefty snowflakes, the new regime is prepared be. Next, ICE teams will descend on zoos to deport undocumented animals. I have already seen references to “woke zoos”, whatever those might be.
david lamy
In an excellent comment above Mark Level names and shames three US political figures as Judas Goats. I am sure he meant to aim the canon at AOC, Corey Booker (not Bush) and Lindsey Graham.
I only mention this because the comment is worth preserving for his and mine person scrap books of thoughts on the present.
Mary Bennet
Bruce Wilder, you might like to look at the hobbyist markets. There are literally hundreds of thousands of small to medium sized enterprises which produce for gardeners, sewists, wood workers, and many other DIY enthusiasts. I am a proud owner of garden tools made to last in the USA by capable Americans. The internet and platforms like Etsy have allowed these producers to flourish, which is one reason why MAGA and their big shot financial backers hate the USPS.
OTOH NR, it might simply be the case that the spoiled rich kid or fluff brained looker in charge of making the list to be tariff targeted can’t read a map, never heard of South Atlantic islands where there is no shopping or MickeyD, and thought a few extra names made the list, and themselves, look Important.
Revelo
Like so many others, I’m desperately trying to make sense of what is going on. My overall impression is that there is a mighty struggle going on among Trump’s closest advisors, each with their own pet ideas. Trump agrees with all the ideas presented to him, despite the massive conflicts among the ideas. The faction that will ultimately prevail is that of natural born grifters, because making big money fast is the idea that catches Trump’s attention best. Ideas about making America great again as industrial and military power will be discarded in favor of a mad rush by insiders to lock down permanent personal fiefdoms, so that USA becomes a typical kleptocratic resource economy (banana republic). Poorly conceived tariffs and other crackpot policies that wreck the economy are exactly what the Trump grifters need right now, because a crisis justifies extreme measures to cope with the crisis: “Never let a crisis go to waste”.
Examples of extreme measures we can expect, if my understanding of the path ahead is correct: scrapping what remains of democracy, harsh crackdowns on rebellion whether by actions or words, censorship of communications (including internet), selling off of public lands and other public assets to Trump insiders at a discount, massive government bailouts to Trump insiders with business problems (like Musk). Possibly crypto will be used to facilitate the looting, such as arranging to sell public assets for crypto coins that Trump grifters themselves mint, then giving away some of these crypto coins to politicians and other public figures who agree to support the looting.
david lamy
In an excellent comment above Mark Level names and shames three US political figures as Judas Goats. I am sure he meant to aim the canon at AOC, Corey Booker (not Bush) and Lindsey Graham.
I only mention this because the comment is worth preserving for his and mine personal scrap books of thoughts on the present.
Purple Library Guy
I watched an interview with Ha-Joon Chang yesterday, the South Korean economist who talks a lot of heresy and who has generally pointed out that most countries that developed economically did so using tariff barriers to protect fledgling industry. Even he thinks Trump’s tariffs are stupid and will damage the US badly.
Ian Welsh
I’m in broad agreement with Ha-Joon Chang and often recommend his books. Tariffs are often good, but this is a stupid way to use them.
GrimJim
Revelo has a good point — the Trumpist plan will likely follow what happened in Russia after the collapse if the Soviet Union.
Of course, the Trumpists (not MAGA, I refer to his inner circle of the moment) will get the sweetest loot from the sale of public assets, and states or parts of states will go to the highest bidders.
The last act of any government is to loot the state.
Mark Level
Thank you for the correction from context, david lamy– you are 100% correct!! Booker was/is the New Jersey pimp for privatized education so only those children with rich, or PMC, parents will get a solid education. (To be fair, Gates & Hastings are the Daddy Pimps, Booker a mid-level soldier.) I guess my fingers typed in Bush because there was so much Sturm & Drang from the Libs just before I posted about Bush’s “25 hour speech” denouncing Drumpf. Which I expect will do as much damage as a snowflake on a monument, except among the drooling ShitLibs.
Oh, & I looked into Judas goats. My source was a farm boy who knew his stuff!! The detail I got wrong is that the Goat is trained most often to lead sheep, at other times cows, into the slaughterhouse and escapes thru a special gate. 2 corrections on one post– I will blame Mercury retrograde!!
bruce wilder
Criticizing Trump’s tariff shock as ill-designed for a long-term industry incubation effect may be missing that the Administration is trying desperately in the very short-term to address the deficits problem. In the view of some key if obscure figures — who knows what if anything Trump knows or understands — the tariff shock may disrupt the rapid escalation of financial deficits. A bit above my pay grade to judge, but not a completely inexplicable policy intervention when framed that way.
mago
Ah yes. Mercury retrograde. The scapegoat. Haha. I often use it myself.
NotBatman
Speaking only as an US citizen who lives in the US (Michigan) and doesn’t disagree with your arguments, I have a couple of couple of questions
a) what do you mean by standard of living?
“Americans aren’t going to take a one-third reduction in their standard of living well, especially when so many of them are just a few hundred dollars a month away from homelessness.”
b) What do you mean by Americans?
Despite what you may have heard, millions of people south of Texas are Americans.
Please consider Central/South Americans.
I don’t think I am being pedantic. I think I’m being careful and accurate.
Also, I am taking great pains on myself personally to leave the USA. I said I would and it will happen. I can’t say I loved the USA but it was my home and now I don’t want to be a part of it.
Carborundum
I’m honestly having a tough time understanding how attempting to tariff oneself into balanced bilateral trade with the entire world isn’t necessarily stupid. Tariffs – okay not necessarily stupid. I can definitely see that there are some policy aims that one could legitimately seek to achieve that tariffs would be an effective means of furthering.
Tariffs to achieve balanced trade with all trading partners, simultaneously, particularly when talking about the biggest, most consumptive economy in the world? Regardless of the tools used, how does that work exactly?