No. of Recommendations: 10
The tariffs shocked the world with a shot into the heart of globalization. They also demonstrated Trump’s commitment to carrying out the economic policies of American Compass (
https://americancompass.org/).Their agenda is frighteningly similar to the economics of National Socialism—-to rebuild the American manufacturing economy by ending unfair trade practices, disciplining and redirecting financial capital, eliminating unfair labor market competition both domestically (anti-immigration) and internationally (through tariffs on countries with exploitative labor practices), empowering workers, restoring the family, and generally making America great again.
I originally thought the tariffs were a cynical attempt to justify tax cuts by hypothetically offsetting the costs through tax gains from tariffs, but after reading through American Compass I think we are in for a long experiment with a new National socialist economics, the outcome of which is likely to be disastrous.
The problems the American Compass identifies are real, and they need to be addressed, but their understanding of causes and solutions are all wrong. The principal beneficiaries of globalization have been American holders of capital and American consumers. Even the losers of the great income gulf that has emerged in America have stayed afloat on a sea of cheap imported commodities. Pulling the rug out from under this globalized American economy is going to cause a lot of things to come crashing down, first of which will be the stock market. Once the economy comes fringing to a recessionary halt, a fiscal crisis will unfold as tax revenues collapse. Cheap commodities will dry up as a result of tariffs and a menacing stagflation will unfold.
I expect that Wall Street, and especially financial capital, will put up some fierce resistance once they realize tariffs aren’t just a political ploy for Trump tax cuts. The rest of the capitalist class will object if the Trump administration actually acts to empower workers. This is where the National Socialism of the American Compass will require the political fascism of the INS.
We are at a crossroads and the rest of this year is going to be a rough ride.
