American Politics Discussion Thread

[darrelljs]

you just have to have cared more about protecting your wallet from the looters

I suspect when the dust has settled, tariff driven price increases will have done more of that than any tax hike since WW2.

Darrell

[greenline]

One more interesting aside.

There are recurrent, big protests going on about Elon's DOGE stuff and now the tariffs. Here's what snapshots of the people involved look like:










A whole lot of gray hairs are involved in these protests, you might notice.

This is not a one sided statement that says, youth = right, left = old. There is an energized youth movement for the left that comes out from time to time. They are a big fan of AOC and a bigger fan of Bernie Sanders, who every now and then will come out to do his little song and dance. "Medicare for All", he'll say, then bow out at the last second whenever the actual candidate the Democrats and the superdelegates have chosen is serious about winning. Such is life.

There's a tension here, because the oldheads getting out in the street now are mad because they think the system, whatever it happens to be, is working fine right now. Don't touch the system, don't mess with their stock options, their retirement plans, the bennies. There's no doubt now that Trump has started to mess with the bennies, despite his campaign claims. But Medicare for all would also mess with the bennies. COVID screwed up bennies for a lot of people already. Enlightened centrist neoliberalism was starting to lose its crutches. 

I don't say this filled with joy that old people are probably going to see a big drop in their standards of living in the near future. I have parents of my own to care for. It will be a sad thing for many, many people. But a bigger tragedy would be continuing to squeeze the lives of young people further to keep the luxuries running for this cohort of boomers. This was the ugly logic during COVID: it would be fine to sacrifice the futures of hundreds of millions, so that some millions of the elderly might cling to life for a few more years. 

[T-hawk]

And I guarantee you the people screaming "hands off" here were also the ones screaming loudest for government hands on other people's bodies for enforcing Covid vaccines and masks. Nobody has any principles, it's all self-interest.

Also the protests were saying "hands off Social Security and Medicare" - DOGE never even talked about that at all, how did they even get that idea? People will get outraged at anything their echo chamber tells them to.

[Zed-F]

Once again, all I am seeing here in response to the biggest self-inflicted financial and geopolitical wound in the last century of US history is some ideological culture war nonsense. You can’t make any cogent defense of the results of your vote, so time to deflect, huh?

[Mjmd]

There are some wild arguments here. I love the justification to still support the madness. To say the tariffs "weren't done in a prudent manner" is such an understatement. Again, all he had to do was corruption and tax cuts again and it would have been fine. I said so before and after the election, but even I didn't expect this nonsensical trade policy.

[T-hawk]

Once again, all I am seeing here in response to the biggest self-inflicted financial and geopolitical wound in the last century of US history is some ideological culture war nonsense. You can’t make any cogent defense of the results of your vote, so time to deflect, huh?

I made a perfectly cogent defense and you ignored it. The ultimate purpose of tariffs is to make American jobs and manufacturing viable instead of continually paying out our money overseas. A nearer term purpose is negotiating leverage. Also the revenue itself narrows the government deficit or could offset tax cuts. And any individual can choose to act anticonsumerist and minimize buying tariffed goods. Finally, the vote is an "outrun you not the bear" situation, all it has to be is less-bad than the Democrats taxing and spending and inflating into oblivion.

[Zed-F]

These tariffs will not make American manufacturing viable, they will eliminate jobs and raise costs. The kinds of jobs these tariffs could theoretically create are jobs that do not pay adequately and are not jobs Americans want to do. Paying for other countries to do stuff Americans don't want to do is sensible trade policy; what this administration is doing is not. If you wanted to use tariffs as part of a sensible plan to boost manufacturing in specific sectors that are relevant to defense production, you would not implement this sort of tariff plan. But you could tell from what said he would do before the election that he would implement broad tariffs. Most Republicans chose not to take him at his word, and are now being proven wrong.

Using tariffs for negotiating leverage only makes sense if you consider only what the Administration does, and do not consider how other countries will respond. There is no chance that politicians in other countries -- especially not other wealthy countries that have historically been US allies -- will be inclined to or politically able to cave to a US administration trying to extort them to renegotiate a trade deal that is more in favour of the USA than was the case before Trump blew up the existing system. This action by the USA has pissed off everyone around the world that historically was a US ally, so the new trading system that develops will work around the US, which is now considered an unreliable partner, instead of working with the US as a leader. The rest of the world would have preferred the pre-existing system to one without the US, but that's no longer the world we live in. This means there is really no real leverage for the US, and only a massive downside to this trade action.

The revenue argument for tariffs is a joke. The scale of revenue tariffs bring in is at least an order of magnitude smaller than the amount of damage these trade actions have already caused, and they *will* do more. They will do more economic damage in job cuts and inflation. They will do more national security damage because people can no longer trust the US to be a reliable security partner, so will buy less US arms and more European arms -- which decreases the scalability for the US arms industry and means the US government will pay more for the same security footprint.

The vote for a Republican candidate who should never have been a candidate in the first place has clearly been worse than any plan the Democrats could have come up with. Certainly they would not have destroyed the world economic order. You can argue that the Republicans should have chosen a different candidate who would have implemented sensible policies along the lines you would have preferred. They DID NOT. They chose a candidate who has no qualms about burning everything down to satisfy his own ego. Accordingly, you should NOT have voted for him.

[Mjmd]

Is that the purpose of these tariffs? Because I could argue extensively they utterly fail at that. A) They use trade deficits as their basis. They didn't analyze countries trade barriers or in place tarriffs and compare them with ours, they went with the middle school simple approach. International trade is not this simple. B) They ignore that some trade deficits are caused by raw materials we don't have or just don't have as much of and even if we do it might be a long time before we could exploit. If you want more manufacturing you should want cheap inputs!!!! (  ). IE they aren't targeted A KEY factor in effective tariff policy. We get cheap Canadian crude oil we then refine into more profitable products. A lot of raw materials come from allies like Australia and Canada we then use. Does it make sense to tariff raw imports we need FOR manufacturing??? No. Stop pretending it does. C) not only do they use trade deficits they use trade deficits not counting services balances which we often run a surplus. D) they utterly ignore geopolitical issues. IE we have such a trade imbalance with Vietnam specifically because we've gotten a lot of production to move from China to Vietnam. Its not like low cost textiles is an industry we are likely to get back anyways. Do we really want to tariff Japan and South Korea but not Russia or Belerus? E) we still tariffed countries we have a goods surplus which gives less incentive for countries to fix them!!! F) No one thinks these are long term and predictable, which is a necessary component for companies to make long term investment decisions. Part of this is that they are so ludicrous; another is that Trump commonly alters course.

If its negotiating leverage, they definitely fail at that. Announcing on everyone at once was SOOO stupid. We have been at the center of global trade and alliances and we are just throwing it all away. If we wanted to go after certain countries or certain goods that is one thing. This is quite another level. We can't leverage our alliances because we are pissing off everyone at once! 

The revenue gain from Tariffs will probably be negative as tax revenue just from profit loss due to tariffs and ensuing economic slow down (probably a recession) will go down will more than compensate. But yes Republicans will use an excuse for more tax cuts we can't afford.


Even if you disagree with what Democrats do or assign them whole blame for things they are not wholly to blame for, it doesn't mean you have to agree with this stupidity or support it.

[greenline]

Curiously, the motivation for the tariffs does not appear to be large scale reshoring, despite Trump's rhetoric the contrary. The tariffs and the formula for them come from both Ian Fletcher's book Free Trade Doesn't Work and Howard Richman's Balanced Trade.

The premises behind the books are simple and obvious. Focusing on comparative advantage to maximize wealth doesn't work in the real world. There are a great many nations out there that are really good at picking watermelons or making wine or whatever. Those countries are typically not very wealthy. One class of wealthy countries has heavy industry. The other has 'service economies'. I add the scare quotes because a service economy is as much lies as it is services.

Creating competitive industry and manufacturing is usually done through selective, rather than general tariffs. The head of state identifies some nascent startup factories that are doing well, and gives them a leg up on foreign industry by tariffs on the competition. Almost every nation that has successfully industrialized has done this; I believe in exceptions but I do not know any off the top of my head. This might be good to try in America, but maybe not. How many viable opportunities would there be for some American company to start making cheap cars again to compete with the existing giants? 

The problem is, as Curtis Yarvin wrote recently, the country is getting pretty old. Older people, old financial systems, old laws and regulations. This would make it harder to start a small scale American whatever factory even with the tariffs. I imagine people will have more luck growing something odd like vanilla in Louisiana, because it's now expensive to import from Madagascar. 

Tariffs can not also hope to impact the deficit significantly. The deficit is yuge, and tariff revenue is not. Maybe tariffs are a roundabout way to force the entitlement issue to come to head. Who knows with this Trump guy!

I think the real reason Trump wants the tariffs is to make the dollar weaker compared to other countries. This would be the biggest leg up for any potential American exports and American producers, rather than reshoring. We will see how well that works.

Anyway, the takeaway from this morning is that the BIG CRASH is not all that big. Maybe it will crash later this week just to spite me. But for all the bitching about trillions of dollars going away, you have to take into account where the market is now versus a few years before:



Look at that big drop! The market is all the way back to where it was in... early 2024. Did you feel trillions of dollars richer in January 2025 compared to August 2024? I sure didn't.

[Mjmd]

Again, if you want industrialization you have to wonder about the tariffs on imports of raw materials....... But yes I don't disagree that the raw input materials are generally not where a nation wants to rely on. You want them and if you have them great, but not to rely on them for your economy. I know we've had the service discussion before, but they valuable. If they weren't for profit companies who do produce things wouldn't pay for the services. You want to process orders, well you might want some Salesforce type thing to keep track of them. You don't fancy having 20 accountants doing work on green paper well maybe 3 with some finance software would be more efficient and not cost as much (as an accountant I bless AP systems where I don't have to physically go find an invoice anymore and yes I've done this). You want your laser guided cutter to do a new design, well someone has to program that. You want to organize efficient shipping for a large complex company, you 100% want some service provider to program something for that rather than rely on however many dudes with paper and pen keeping track of and organizing.

Cars are an example where tariffs have brought car manufacturing to America. Not the whole car, but specifically to get around tariffs a lot of "foreign" vehicles do final manufacturing here. Would we prefer the whole process, sure, but focused tariffs at least brought some of the end manufacturing back. If you wanted more of it could you do more targeted tariffs. Sure. It will raise car prices, but that is a trade off policy makers have to consider. Having the capability is worth something and those higher end manufacturing jobs are good support jobs not only for the actual people doing those, but because those kinds of jobs have a lot of those dirty "service" jobs that branch off from them. How much more expensive of cars for how may lower supply chain jobs? Its a balance. If people can't afford the cars it isn't much good and you are making them less competitive on the global market the more expensive they get which can get counter productive. So ya good and bad and careful consideration should go into. Or just blow it all up.

Its a good thing a strong dollar and it being the world reserve currency doesn't give us any advantages. We should definitely tank that.

Love the Trump people on stock market. When it goes up, all because of him. When it goes down its either someone else's fault or it doesn't matter. The stock market isn't the economy and ya it should only vaguely matter. We will see on the economy, but these were not well thought out or implemented tariffs.