Tariffs were never the problem.
Potential profits for investors drove heavy manufacturing in America to low-wage countries, mostly China. The oligarchs who’ve run our country for the last half-century or so, fell in love with high tech at low costs.
Interestingly, with a little patience they could have done that in the US, as robots did the heavy lifting. Tesla made Elon Musk a billionaire before his manufacturing plants ever left the country.
Lower cost labor didn’t make a pair of Nike running shoes any cheaper for the buyer, just hugely profitable for Nike and its stockholders.
Cheaper was a race to the bottom for American workers, but Made in Asia turned millionaires into billionaires. The Golden Goose was hatched, and all it cost was the American middle class.
Ain’t she sweet (those profits), see her comin’ down the street. Now, I ask you very confidentially, ain’t she sweet? Ain’t she nice, look her over once or twice. Now, I ask you very confidentially, ain’t she nice? Just take a look in her direction. Oh me oh my, ain’t that perfection?
Written and published in 1927, Ain’t She Sweet became the theme of financial inequity a half-century later. The prez told America tariffs would heal the sickness, and voters believed him.
Coincidentally, the Great Depression descended upon us just two years later.
Yep, history does indeed rhyme, as Mark Twain told us.
But because Trump’s not informed, and because he never listens to anyone who can give him anything but praise, the writer of The Art of the Deal remains ignorant of things like tariffs. When the world tries to explain the economics, he calls it ‘fake news‘ and doubles down.
The billionaires love it. It takes the heat off them.
And they get to play Insider Trader on the stock market, adding several $trillions to their already swollen piggy banks. It’s not really ‘inside information‘ to watch an ignorant man play with something he misunderstands, as long as you’re properly tipped off, and have the cash to cash in.
It’s a financial dream-show for those in the know.
Wall Street is a zero-sum game and, if you’re not among those in Trump’s Rolodex, the zero side of the sum is yours to hold.
Both winners and losers, of course, are spread throughout the world.
Investing, whether it’s in the United States or elsewhere, demands consistency.
It can (and has) weathered the storms of good economic times and bad, so long as changes don’t come like bolts out of the blue. Our current administration, in its first couple of years, has produced a major lightning storm at home and abroad.
To the extent it was possible, the United States was forced to become a low-wage country. And that loss of our middle class pre-dated the current prez by fifty years.
So Trump was not so much the cause, his presidency was the effect.
Remember that. It’s important, and the main reason he is so misunderstood. We know who the guilty parties are.
They’re the billionaires, and the minions they spawned. Mostly they accomplished that by buying off our two political parties and the government they control. A half-century of destroying the single wage-earner family left a lot of anger behind.
The Trump political boat floats on that anger, and the wind at its back is widely misunderstood.
Every home-grown dictator needs targets.
For Hitler, it was the Jews.
For the current prez it’s the federal civil service (deep state), immigrants & “sanctuary” jurisdictions,
elite universities & DEI,
drug-lords,
Democratic leaders,
prosecutors & investigators on his trail,
the press & broader media,
Judges and the legal system handling his cases are there as well,
all those foreign countries, and
former allies who’ve been stealing our wealth for decades.
This administration needs no allies, including Canada.
“I’m the only guy who can change all that,“ he blusters. Which is simply a more outrageous personal statement about the change all presidents claim.
Do you ever wonder why nothing much changes as we drift back and forth between Republican and Democratic administrations?
The answer is quite simple.
The billionaire class owns them both.
Slowly, stealthily, and with great subterfuge, the tools of capitalism that made it work were removed from the tool boxes that once assured both its health and fairness.
Banking laws were changed,
unions busted,
unregulated mergers encouraged,
environmental controls removed,
worker benefits reduced,
and monopolies encouraged.
Technological advances exploded without either regulation or constraints.
Like an undisciplined child, capitalism ran wild at the candy-counters, without restraints, causing inequality, market failures, damage to the environment, political short-termism, excess materialism and boom and bust economic cycles.
As the toolboxes regulating capitalism were emptied, recessions occurred in America on average about once every six or seven years.
Recessions flush the social toilet.
Banks and businesses (those ‘too big to fail’) are bailed out by government (you and me), while wages stagnate, and unions are kept in line (you and me again).
Chillingly, what was once heralded as the finest economic system ever to be created, the capitalism we flushed down that social toilet, has now been reborn with a different face in communist China.
It has been said that dictatorship, in the hands of a benign dictator, is the most efficient form of government in the world. China is proving what was once merely a theory.
Which is another story.
For another time.
But from here on in America, manufacturing mostly happens elsewhere.