Natural disasters and cyclical recessions are one thing, but businesses don’t expect Black Swan events to be caused by the policy whims of a dictator, which is why there is little urge to invest in authoritarian regimes where policy changes on a dime.

China is certainly an authoritarian regime, and it had a pretty long history of radical policy shifts when it began sucking in trillions of foreign investment in the 1980s and 1990s. Corporations will go wherever they can get short-term profits, which is why they will also flock back to Russia without state intervention to stop them. Jack Ma, the Chinese equivalent of Jeff Bezos, chided the Chinese Communist Party on market liberalization (fairly mildly) and then got disappeared for half a year. Bao Fan likewise disappeared. China averaged executing one of its billionaires on charges related to corruption or overstepping the lines on the power of private individuals vis-a-vis the Communist Party about once a year through the 2000s.

Western corporations have largely shrugged at this, just like they (and the Arab states) shrugged at the re-education of Muslims in East Turkestan.

Meanwhile, Trump won the most votes in a free and fair election, and his party won both chambers of Congress. People are getting what they voted for. It's not a failure of "too little democracy" (i.e. "too much authority") when a proven incompetent populist demagogue wins power, quite the opposite.

There may be a temporary increase in demand, but in the longer term American companies will not be able to compete with foreign companies who re-assemble cheaper supply chains excluding the U.S.

It's probably more likely to be the opposite, provided the tarrifs remain in place. The silver lining is that a good deal of near-shoring already occurred due to the COVID-19 pandemic and that near-shoring potentially has a lot of environmental benefits. Off-shoring production has been a way to off-shore polluting as well, i.e., to get around the labor and environmental regulations in developed states. But this comes with the very real environmental costs of shipping stuff all across the world for different stages of production.

Politically, I get "playing to the crowd" on consumption having to go down temporarily, but I think liberals should acknowledge that actual meaningful action on climate change would also require this sort of "short-term pain" for long term gain. The problem I see with the Trump plan is more that it, like everything his administrations do, doesn't seem well thought out, is implemented chaotically, and will likely be subject to all sorts of favoritism.

Lots of wealthy states have vibrant economies despite significantly higher levels of protectionism than the US though. The conventional orthodoxy surrounding the analysis of protectionism puts a premium on GDP growth and raw consumption that is vastly too high, while tending to ignore or downplay the effects on social mobility, inequality, sectoral shift, and median consumption or particularly the consumption of the lower two quintiles.

We have now had a ton of research on how the shift of millions of jobs and trillions in investment to China has played out for US citizens. While it seems that, had this not occurred, US GDP might be lower, it also seems that many areas of the country would be doing vastly better, and that overall inequality and mobility would be improved to a meaningful degree. Whether or not it is possible to "undo" the damage at this point is another question.

However, the inability of the West to scale up military production for the Ukrainian war does at least show that there are pretty massive national security reasons for wanting to bring industry back, since the ability to scale up has been, frankly, pathetic. Unfortunately, where the need is highest is in commercial ship building (essentially extinct in the US, with China outproducing it almost 200:1 in tonnage commissioned), and that would require direct, major government intervention to resuscitate.



I mean, Vance strikes me as incredibly opportunistic and unlikable, but he would surely be an improvement over the chaos of Trump. He would be preferable if only because he is less charismatic and so less able to get by on sheer bluster.

Decreased government spending and tax cuts will certainly offset the cost of tariffs to the American public. Whether they can pass the tax bills is the problem. — NOS4A2

Tax cuts can offset the impact of tarriffs only for those families that pay a sufficient amount of taxes. It keeps the wealthy whole.

According to this, 40% of households pay no income tax. This article shows the average tax rate by income level.

The other big problem: if tarriffs are in place for the long term, it will drive more domestic manufacturing - which is great for the manufacturers and for employment, but this will reduce imports, and thus reduce tarriff revenue.

I mean, Vance strikes me as incredibly opportunistic and unlikable, but he would surely be an improvement over the chaos of Trump. He would be preferable if only because he is less charismatic and so less able to get by on sheer bluster. — Count Timothy von Icarus

Read Dark Enlightenment and reassess.

Grand strategy wise, I suppose there could also be the hope that, given all the rumblings in the Chinese economy, that this will throw them into a much greater recession than what the US faces. The "new multi-polar order" has already really taken a hammering with Russian performance in Ukraine and the absolute disaster Iran's axis faced in their conflict with Israel.

But then Trump is inexplicably coddling Russia right as they are facing what I think could only be fairly called a defeat, so it's not like that seems part of their thinking. He seems to be actively courting an invasion of Taiwan by turning on an ally, while at the same time removing China's main incentive (exports) not to take Taiwan and alienating all the allies we'd rely upon to sanction/boycott China in the event of a war. So, his bizarre Russophilia (Putinphilia) basically undermines that line of argument.

Corporations will go wherever they can get short-term profits, which is why they will also flock back to Russia without state intervention to stop them. — Count Timothy von Icarus

My point is that if I own a corporation in the U.S. and I am interested in expanding, I would consider my best strategy to be to sit on my hands and wait this thing out rather commit my company to a move with the assumption that I can plan on the basis of whatever Trump declares to be the tariff situation this month, this week or this afternoon.

From Thomas Sowell:

Franklin D. Roosevelt, when he was president in the 1930s, said that you have to try things. And if they don’t work, then you admit it, you abandon that, you go on to something else and you try that until you come across something that does work.
That’s not a bad approach if you are operating within a known system of rules. But if you are the one who’s making the rules, then all the other people have no idea what you’re going to do next. And that is a formula for having people hang on to their money until they figure out what you’re going to do.
And when a lot of people hang on to their money, you can get results such as you got during the Great Depression of the 1930s. So if this is just a set of short-run ploys for various objectives limited in time, fine, maybe.
But if this is going to be the policy for four long years, that you’re going to try this, you’re going to try that, you’re going to try something else, a lot of people are going to wait.

Meanwhile, Trump won the most votes in a free and fair election, and his party won both chambers of Congress. People are getting what they voted for. It's not a failure of "too little democracy" (i.e. "too much authority") when a proven incompetent populist demagogue wins power, quite the opposite — Count Timothy von Icarus

I never claimed that he didn’t win fair and square. Hitler won in a fair and free election, too. That doesn’t mean he didn’t govern by edict rather than rule of law. As to people getting what they voted for, a sizable chunk of those who voted for Trump thought they were getting someone quite different than what he has turned out to be. The ones who put him over the top did not vote for 19th century mercantilist protectionism.

There may be a temporary increase in demand, but in the longer term American companies will not be able to compete with foreign companies who re-assemble cheaper supply chains excluding the U.S.

It's probably more likely to be the opposite, provided the tarrifs remain in place. — Count Timothy von Icarus

Explain to me how we build cheaper cars when we have to make all the components here, while other countries will forge their own trade deals to integrate production among multiple countries for the lowest prices. Of course the heartland would be better off if it werent for offshoring and automation. There would still be millions of workers in assembly lines with high wages under labor protections. But even if all the companies that left came back, they would offer many fewer jobs than decades ago.

Decreased government spending and tax cuts will certainly offset the cost of tariffs to the American public. — NOS4A2

"Hey tariffs will make things cost more but at least there's less government spending on social security" isn't the win you think it is.

"Hey tariffs will make things cost more but at least there's less government spending on social security" isn't the win you think it is — Mr Bee

Neither are cuts spending on research and innovation in medicine, AI, energy and all the other things that China is pulling farther and farther ahead of us on.

Neither are cuts spending on research and innovation in medicine, AI, energy and all the other things that China is pulling farther and farther ahead of us on. — Joshs

Seems like you wouldn’t make these cuts if you were interested in revitalizing American industries.

Seems like you wouldn’t make these cuts if you were interested in revitalizing American industries. — praxis

During the Cultural Revolution, Mao banished intellectuals to the countryside and decimated academic institutions, so that there would be no smart people around to challenge his power. Parallels here?

People are getting what they voted for.

Only a few voted for this. Most voted for populist promises.This is more a failure democracy, a breakdown in the dissemination of sound political narratives to the population. Mass gaslighting from media and social media organisations captured by vested interests.
Trump is the opportunist who took advantage by riding the wave of disinformation. Unfortunately he is a snake oil salesman, a conman. Not the sort of person to pull off such a seismic correction in global trade. If it doesn’t crash and burn, it will be a miracle. Like the miracle that supposedly caused Trump to dip his head when the bullet grazed his ear.

Seems like you wouldn’t make these cuts if you were interested in revitalizing American industries. — praxis

I agree. One of the worst effects of the Neo-Liberalist shift to ever cheaper labor markets is that a huge reservoir of knowledge became suddenly unneeded by the body politic. A home-grown production revival is going to have to go the other way and develop new skills.

The withdrawal of regulation will mean the end of invention in many industries.

The whole thing is as dumb as a stick shoved into moist ground.

Voters need to feel like it’s a disaster for their quality of life. That’s the only way to be rid of Trump.

Won’t be long now then.
I wonder if he can outlive a lettuce, which the UK’s last PM but one failed to do (when she implemented neo-con policy).

During the Cultural Revolution, Mao banished intellectuals to the countryside and decimated academic institutions, so that there would be no smart people around to challenge his power. Parallels here? — Joshs

Trump convinced Americans to elect him and Elon. No need to make us any stupider.

China today…
https://thephilosophyforum.com/discussion/comment/980315

So what you are calling for is an imbalance in the world's economy, such that a smaller population in the "West" has a larger part of the production...

Decreased government spending and tax cuts will certainly offset the cost of tariffs to the American public. — NOS4A2

Can Trump replace income taxes with tariffs?:

No, and trying would be regressive and harm economic growth.

Also

In sum, Trump's tax proposals entail sharply regressive tax policy changes, shifting tax burdens away from the well-off and toward lower-income members of society while harming US workers and industries, inviting retaliation from trading partners, and worsening international relations. — Why Trump's tariff proposals would harm working Americans

These headlines are explained in the article mentioned...

At the revenue-maximizing tariff rate of 50 percent, customs revenue peaks at about $780 billion, less than 40 percent of what income taxes bring in

If tariffs are maximized, lower- and middle-income Americans would lose greater shares of after-tax income with little to no offsetting tax cut benefits

the dollar’s exchange rate would rise, hurting us exports

This all-out embrace of higher tariffs is dangerous. It is bad fiscal policy, since tariff revenues will fall far short of candidate Trump’s tax cutting ambitions, and switching the fiscal burden from the income tax toward tariffs harms most Americans, benefiting only those at the top of the income distribution. Beyond these fiscal effects, high tariffs are likely to worsen macroeconomic imbalances, harm exports, diminish economic growth, and create new economic shocks, including higher inflation.

You are being shafted. Enjoy.

F) Not likely. A nation's stability is also proportional to its size. A nation as large as the US takes longer to "fall" than smaller nations. — Christoffer

This isn't about a fall like let's say Yugoslavia. What I mean is the similar kind of political instability that Latin America can have. Latin America has had it's share of political instability, but no Latin American country has become a failed state, even if Venezuela could be said to be on the way. Above all, Latin American countries do work... somehow fairly OK. It's not the kind of political instability that you find in Africa. For a long time we haven't seen something comparable to a real revolution in Latin America.This is just an observation, when you just look at what has happened in the US already, even if it has been the richest country in the World, it has been prone to political violence, riots and so on.

As a young boy, I've seen the huge smokestacks what widespread burning and arson do in an American riot. I witnessed myself the 1980 Miami riots, a not so well known incident anymore.
(Miami riots, 1980)


Yet the fact is that the US has a very violent past with it's presidential assassination attempts and political violence, it's lynchings and riots. Things can get indeed out of hand in the US, even if it's a prosperous country. Not everywhere, but in many cities the tensions that could spark off something are there. Add to this what Trump can do.. and has done. There are simply too many guns that deadly accidents can happen. You already had close calls during the George Floyd riots, and deaths. Add to this an administration that goes down hard on "criminals" or "terrorists" without due process, and the end result can be a real tragedy. And I call it tragedy, because a lot of it might be at first unintentional. Yet we have to contemplate how Trump would react to large scale protests or riots. It might be different than last time.

This doesn't at all mean that the US is going to anarchy or a true revolution such like the Russian revolution or the French revolution. But political instability? Yes. It's economy will be just hurt, but will endure even the Trump tariffs easily. And the fall from being the sole Superpower to being the largest Great power isn't so huge either, even if it is dramatic.

The problem I see with the Trump plan is more that it, like everything his administrations do, doesn't seem well thought out, is implemented chaotically, and will likely be subject to all sorts of favoritism. — Count Timothy von Icarus

Or the thoughts themselves are absurd and chaotic, but nobody dares to say to the Donald if something is genuinely a terrible counterproductive idea.

What could you say about the plan of Canada becoming the 51st state of the US? Is it just a plan implemented chaotically? No, it's totally absurd and ludicrous plan. Canadians don't want that. What else would there be than the solution that Putin had for Ukraine? To think it's just a jab at Trudeau won't fly.

Yet nobody is willing to say this to the President, so he can always ramble about it if asked about it. At first we thought it was just brilliant marketing of simple slogans like "Build the wall and have Mexico pay for it". We are used to have "election rhetoric" and promises that aren't kept. But Trump did ask and pleaded the Mexican president to do it and pay at least something. Hence Trump really means what he says.

It should be obvious after the "Day of Liberation" now. He isn't playing some 4D Chess some people think he is doing. The tariffs were not a negotiating tactic, just like he didn't write the "Art of the Deal". No American politician has ever been so straight forward in telling what he wants. He truly wants trade barriers to grow domestic production because international trade is bad. He wants the territory of the US to be larger.

We make a mistake when we think Trump isn't for real and isn't meaning what he says.

If so, then why don't people do anything about it? — Christoffer

How, though? He’s been empowered by the popular vote to do what he’s doing. The Republican voters still approve his actions overall. His campaign speeches were almost entirely negative, about how the country has been overrun by criminals and the economy a shambles, with the sinister authoritarian Project 2025 in the background, which is practically a blueprint for dictatorship. He’s a classical demagogue, who harnesses popular resentment to overturn the established order. They have been known since ancient times. So a large minority voted Trump in to do what he said he would do. When the s***t really hits the fan, the economy tanks, epidemics start to rage due to Kennedy’s utter incompetence, the international order falls to pieces, then MAGA faithful might turn. But it might be too late to restore the catastrophes wrought by this man.

I read that essay at your behest. It clarifies a lot of some people's thinking: Engineering social change.

read that essay at your behest. It clarifies a lot of some people's thinking: Engineering social change. — Paine

I did not ask you to read it.

You keep bringing it up.

You keep bringing it up. — Paine

Not to you.

Why not?

This isn't something the Trump administration randomly cooked up on a Wednesday.

These current moves vis-á-vis the global economy are quite fundamental in nature.

The fact that the US is choosing economic pain for greater economic independence and to curb foreign economies implies to me that they are preparing for major conflict.

Even if Trump does “negotiate” away some of the tariffs, or row back due to worries about a crash. It’s too late for their credibility. It’s shot, the reset across the rest of the world has already happened and investors and capital flows may turn away from the dumpster fire. As Simon Nixon (formerly of The Times) suggests;

Yet there is a danger that this kind of orthodox analysis risks underestimating the wider consequences of what Trump has just unleashed. Some of those consequences are psychological, not least to confidence in the credibility of US economic policymaking. As George Saravelos at Deutsche Bank notes: “there is a very large disconnect between communication in recent weeks of an in-depth policy assessment of bilateral trade relationships with different countries versus the reality of the policy outcome. We worry this risks lowering the policy credibility of the administration on a forward-looking basis. The market may question the extent to which a sufficiently structured planning process for major economic decisions is taking place. After all, this is the biggest trade policy shift from the US in a century. Crucially, major additional fiscal decisions are lining up over the next two months.” Trust in US economic policymaking once destroyed will be hard to regain.
Even more importantly, it is surely naive to think that the consequences of an upending of the global economic order on this scale can be limited to trade. As Harnett and Bowers have noted, few investors recognise how closely global capital flows and global trade are linked. A crucial question now is what happens to capital flows. If it leads to lower cross-border capital flows, that could have consequences both for the dollar and US private lenders, which depend on foreign capital. As Wealth of Nations has been consistently noting since it was first launched, much of the extraordinary performance of US assets in recent years has been fuelled by vast exports of European and Asian capital. Even more consequentially, as trade becomes weaponised, will capital go the same way? After all, if countries are being forced to become more self-sufficient, they will need to be self-sufficient in capital too. The real risk is that Trump triggers a disorderly exit by foreign investors from US assets. History may record that it was not just the global trading system that Trump blew up on Liberation Day but the financial system as we knew it too.

Blog here;
https://nixons.substack.com/p/the-end-of-the-economic-world-as?utm_campaign=post&showWelcomeOnShare=false

So what you are calling for is an imbalance in the world's economy, such that a smaller population in the "West" has a larger part of the production...

No, (although it might be a maybe), I’m observing an economic malaise in Western countries and suggesting a remedy, based on a removal of the cause.

They have achieved that by lower wages, lower enviromental standards, lower quality requirements, direct state-aid, a strong dollar, regulatory barriers, taxes and to a lesser extend tarifs... thus undercutting other economies en forcing them to a race to the bottom in many cases. — ChatteringMonkey

I'm curious about the logic here. "We" have high wages, environmental and safety standards, etc, and that means we cannot compete on equal terms with people who are poor and do not have these things, and this is unfair on "us"? Not the poor people who make all this stuff for us?

I never talked about unfairness, that's how Trumps administration would put it probably, but I don't agree with that.

I think it is bad for a number of reasons. One of them is them is that depresses wages for the working man in the surplus-countries, and thus everywhere because it's a world economy. This isn't about poor countries only btw, the same has happened with German wages for example because it's a surplus-country. Reduced standards, enviromental and quality, is also bad in itself... It created a system where companies can shop over the whole world for the most favourble conditions and so puts goverments in a position of competition to lower standards.

And maybe the more important reason is that I think it is simply unsustainable as a system, because it relies on the US increasing its debt to buy up the surplus.... and you can only do that up to a certain point.

The tariffs and the return of "industrial policy" that differed radically from the neo-liberal orthodoxy that had dominated the GOP for decades were discussed throughout the campaign. You can find all sorts of articles on this from before Trump was elected, and he had rhetoric focused on the trade deficit in his speeches on a regular basis.

It's certainly true that when voters pick a candidate they are rarely selecting on a single issue, but it's hardly a move that has come out of left field. Both polling and my person experience living in an area that went hard for Trump suggest that the most common attitude for supporters is that they are willing to "try it out" and suffer some "short term pain for long term gain."

Second, it's perhaps dysfunctional that major policy choices are made wholly by presidents in this way. That's an outgrowth of decades of dysfunction in Congress, which can no longer govern. But if this move makes Trump "dictatorial," then what of Biden's decision to unilaterally increase net migration rates four-fold without any action from Congress largely through choosing not to enforce standing US laws?

This is not something Biden campaigned on, probably because actually increasing (as opposed to maintaining) net migration is extremely unpopular, polling on average on par with Kamala Harris's performance in rural Southern counties. Yet, despite COVID restrictions keeping migration low during the first half of his term, he managed to oversee a net migration figure significantly higher than the high levels under George W. Bush's two terms(or Obama's two terms) in a little over half of a single term.

When liberal outlets said that surging migration rates were simply an inevitable consequence of the economy and pent up demand, were they "gaslighting" the public? I don't think so, although their description certainly had a lot of ideological bias. There was indeed pent up demand from the pandemic. Early in the pandemic, and the initial recovery, real wages for low-income Americans grew at the most rapid pace in almost half a century (after marked declines in the 80s and 90s). Wage growth for the bottom 40% was outpacing inflation, while those in the top 10% saw their real wages decline for the first time in ages. I think it's no coincidence that it was at this point that major outlets began screaming in alarm about inflation... and then switched to a steady narrative of "it's not that bad," once things returned to "normal," (i.e., with the top end of the income distribution seeing steady real growth above inflation again.) At any rate, obviously growth in the lower end of the wage distribution is going to attract more migration, that isn't wrong.

However, the commonly expressed notion that there was nothing that could be done short of some inhumane Korean border solution has been proven demonstrably false. The US was able to rapidly bring down illegal entry to the country in 2020 and 2025 through policy, as I think any honest account should have been able to acknowledge.

One side's "gaslighting" is just another's "political slant" or "political blinders." In 2020, there were 66 million people in the lowest income quintile. Most immigrants entering without legal status end up in this quintile and are competing with its members for wages. The net migration under Biden was equivalent to 15.6% of this entire population; it would be 7.8% growth if we look at the bottom two quintiles taken together.

If you look at bedrock economic assumptions and dominant orthodoxy, one assumption you are going to find that holds even stronger than "tariffs aren't that great" is "if you increase the labor supply 15.6%, it is going to put downwards pressure on wages."

For the past half century, we've had very poor wage growth for the lower 40%, phenomenal growth for the top 10%.



This radically reversed in 2020



The top lines are the poorest Americans in the second graph. Why did this occur? A number of reasons, but by far the most obvious is the "labor shortage." The supposed labor shortage occurred because of a massive cut off in migration (particularly the illegal immigrant that tends to funnel workers entirely into these lower quartiles), a mass retirement of Baby Boomers, and other pandemic related issues. This jump occurred despite all the supply chain shocks that one would expect to hit low wage workers hardest.

Yet if you ask liberal economists, who generally will acknowledge that illegal immigration tends to negatively impact poorer Americans (both their earnings, access to government services, and ability to unionize), they are often going to try to find other explanations here. I don't think this is gaslighting though, I think it's a combination of ideological blindness and self-censorship (self-censorship to the extent that one pays a penalty in the current climate for expressing heterodox beliefs, and this is particularly true on migration, where opposition is equated with racism).

I guess my summary point would be this:
A. Unilaterally raising tariffs, a power the President has, is no more "dictatorial" than unilaterally massively increasing net-migration by choosing not to enforce standing laws or precedent (indeed it seems less so).

B. Tariffs are still more popular than increasing net migration dramatically.

On at least this issue, the difference seems to be largely one of spin. If anything, there was more "gaslighting" in the former case as the Biden Administration didn't triumphantly announce radical changes in migration policy, but often went out of its way to deny that it was actually allowing substantial changes.

The great irony here is that, of the heterodox economists who have defended tariffs up to now, they are overwhelmingly liberals.

How, though? He’s been empowered by the popular vote to do what he’s doing. The Republican voters still approve his actions overall. His campaign speeches were almost entirely negative, about how the country has been overrun by criminals and the economy a shambles, with the sinister authoritarian Project 2025 in the background, which is practically a blueprint for dictatorship. He’s a classical demagogue, who harnesses popular resentment to overturn the established order. They have been known since ancient times. So a large minority voted Trump in to do what he said he would do. When the s***t really hits the fan, the economy tanks, epidemics start to rage due to Kennedy’s utter incompetence, the international order falls to pieces, then MAGA faithful might turn. But it might be too late to restore the catastrophes wrought by this man. — Wayfarer

What I mean is, why aren’t anyone doing something when he breaks constitutional laws and regulations? Why aren’t anyone opposing and rallying the remaining mentally functioning republicans? If he continues with this he will at some point overstep so much it turns violent.

Point being, how far must he go before people start to oppose him? Or is the people just gonna sit around taking it. Where’s the million people protest march? The people who voted for him deserves the shit he pours on the nation, but so does the ones apathetic and ignorant.

Less in history sparked major outrage, but these times it seems people are so fucking addicted to their phones they never look up from the screen to make actual difference.

The tariffs and the return of "industrial policy" that differed radically from the neo-liberal orthodoxy that had dominated the GOP for decades were discussed throughout the campaign. You can find all sorts of articles on this from before Trump was elected, and he had rhetoric focused on the trade deficit in his speeches on a regular basis.

I’m only focussing on this issue. The gaslighting is that Trump and his associates assured voters that their policy is economically coherent and that it would work. Just like Liz Truss did in the U.K. she remained in office as Prime Minister for 45 days, before the markets sent her packing.