Title is clickbait (we all know why) but its a great read. Its so many shocks to the economy at the same time, and with no goal other than to cause harm that I don't think anything the FED does will have any real impact in the real world.
The author goes for an OR between reasons but I really don't see it like that, its an AND, all jumbled together and pushing the economy down.
My read is not that it is to cause harm / break things down per sé, but instead to deglobalize. At various times, the left and the right have made globalization the bogeyman and something to fight, so this idea has been in the ether.
For many reasons (economic, geopolitics, peace), globalization is a great thing.
Even if deglobalization were a great idea, then the execution is haphazard, incompetent, rushed.
I think that security/stability for a country as big as the US requires at least some localization. For example, IMO all medications, medical devices, infrastructure systems (such as telecom, power, etc.), hardware and materials should be at least 50% domestically produced and have at least dual sourcing.
I realize that not all countries are big or diverse enough to accomplish this, and that's a reason why loose confederations like the EU exist. The US started much closer to that itself.
A country like the US should be self sufficient in energy, food and medicine, but there has never been a concerted policy to do that.
One of the biggest reasons is lobbying, for the US to be self sufficient in energy, for instance, it would have to invest heavily in renewable energy (like china is doing) but the oil lobby is never going to let that happen.
So with the government so captured by interests that don’t care about the long term stability of the country itself, it’s very difficult to effect these large changes.
So the only way the US can be energy independent or otherwise self-sufficient is excluding fossil fuels? AFAIK, the US has plenty of its' own if it had to be so, and that it's mostly a matter of cost efficiency that it isn't already.
> Even if deglobalization were a great idea, then the execution is haphazard, incompetent, rushed.
Doesn't this apply to globalization as well? Saying "learn to code" to people who lose their jobs due to globalization is not great execution either and sets the stage for backlash.
> > Even if deglobalization were a great idea, then the execution is haphazard, incompetent, rushed.
> Doesn't this apply to globalization as well? Saying "learn to code" to people who lose their jobs due to globalization is not great execution either and sets the stage for backlash.
Globalization, or more loosely, more and more people or societies trading with each other over greater distances and competing at who does something best, has been a steady trend over the centuries and a force for good.
While an individual could get caught off guard one morning when their job is gone, when you zoom out the megatrends are slow but forceful and you can foresee a lot of the big picture. It is also easy to conflate "globalization" caused my job loss with "automation" caused my job loss.
The current deglobalization efforts, by contrast, have been haphazard, incompetent, rushed.
Unfortunately, deglobalization-by-edict is not going to bring jobs or industry back, it's just going to make things more expensive and inefficient to build. China has entire cities that are laid out like a giant assembly line, with raw materials inland, manufacturing and assembly midway, and final packaging and shipping at the coasts. Plus a skilled workforce trained to make it all work. We're not going to replicate this in Detroit or Houston.
I'm sure it's just automation that replaced a lot of the manufacturing jobs in the US with foreign workers earning less in a month than US workers earned in a day.
Personally, I would say you are both, to some extent, wrong.
I don't think it's true that there's no other goal than to cause harm, at least with the tariffs.
By the same token, though, while I think deglobalization is something that people around Trump would say they're shooting for, it's not really something Trump cares about in that sense.
No; I think Trump's primary goal with the tariffs is to flex his power and enjoy the feeling; he doesn't really care what the effect is on everyone else. With the ICE crackdowns, he definitely wants to hurt everyone nonwhite in America.
I, on the other hand, believe that it's not causing harm or deglobalization, but rather a way to generate cash for Trump himself. He or his lieutenants get cryptocurrency for either imposing tariffs on competitors, or not imposing threatened tariffs, or maybe shorting entire industries before the tariff is announced.
Yeah, it’s visible there is no particular plan for anything. Once they’re announced someone shows up to try to retcon it to something that resembles a reason but it is clear there are very large whales profiting from trading against these decisions.
That seems to be the main way people are profiting from this admin, insider trading. I doubt we’ll ever figure out who they were.
The execution and evaluation (granted, that's part of the execution).
If for some reason someone smart (with an education and who did something other than default to praise Trump's ego in press conferences) were to decide we should go to the mattresses wildly with tariffs to fight globalization:
I would hope they would care to actually evaluate if it is working / the impact, and not fire government workers when they report one thing that didn't sound good.
If you're not bound by any results you don't like then you can't know if you're even winning.
Granted ... that might not matter as I suspect market manipulation and bribes is the only real measurement with this administration.
> If for some reason someone smart (with an education and who did something other than default to praise Trump's ego in press conferences) were to decide we should go to the mattresses wildly with tariffs to fight globalization:
And even then, tarrifs right off the bat are the wrong approach. It takes time, a lot of time, to reorganize supply chains and spin up manufacturing. It also requires a ton of capital. It requires a slow roll, local incentives, subsidies, and long term planning.
It wouldn't be feasible to expect it to happen over the course of a single presidential term. If I'm a big company and I've got the cash reserves, I'm better off laying off a bunch of people and buckling down for the next 4 years rather than spending a bunch of capital to bring supply chain to the USA.
> Please don't conflate what the left has done (actual economic plans and policies that resulted in economic growth) with what the right has done (pointlessly destroyed relations with multiple countries because they didn't get their way in 2020).
What I further said is that even if deglobalization is a great idea (it isn't) then the execution we're seeing now by the right is very poor. We do not know how the left would have executed because the deglobalists in the Democratic Party do not have sufficient power.
Some quotes[1] just for fun:
Bernie Sanders: “increasingly globalized economy, established and maintained by the world’s economic elite, is failing people everywhere.”
JD Vance: “the effects of globalization have hollowed out America’s industrial core.”
Trump: “Globalization has made the financial elites who donate to politicians very wealthy, but it’s left millions and millions of our workers with nothing but poverty and heartache—and our towns and cities with empty factories and plants.”
And if you think these 3 represent fringes on the left and the right, you will be wrong. During the Biden admin, US Trade Representative Katherine Tai assert that governments’ urge “to liberalize as much as possible” has led to a “race to the bottom.”
The author goes for an OR between reasons but I really don't see it like that, its an AND, all jumbled together and pushing the economy down.