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Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 1
No. of Recommendations: 12
Trump’s tariffs are essentially sanctions on the rest of the world. There is an implied suggestian that, one by one, our formor trading partneers will be forced to cut us better deals. It's one thing to be the 300 pound bully in the school yard who can beat up anyone at will and another if he callenges all 200 students, including his closest friends, to combined combat. Sure, they could line up to fight him one at a time, but more likely, they will form new mutual relationships which exclude the bully.
The economic theory backing his actions are complete BS and few outside of his circle expect there to be higher employment and/or lower inflation on a nearterm basis. So, like I said before the Brexit vote, "There is little chance that things will improve andd a significant risk that they will get worse". It was obvious this would cause the stock market to crash (a point W. Buffit seemed to have recognized months ago when he started raising cash), as well as increased unemployment and inflation causing ill will which would have to be overcome in time for the next election cycle (unless a "national emergency" interfers with that).
Heather Cox Richardson:
Trump’s tariffs are not an economic policy. Tariffs are generally imposed on products, not on nations. By placing them on countries, the White House was able to arrive at its numbers with a nonsensical formula that appears to have been reached by asking AI how to impose tariffs—a suggestion so outlandish that I dismissed.
CNBC’s Steve Liesman said: “Nobody ever heard of this formula. Nobody has ever used this formula. So I’m sorry, but the conclusion seems to be the president kind of made this up as he went along....”
Today, former treasury secretary Lawrence Summers posted: “It’s now clear that the [Trump] Administration computed reciprocal tariffs without using tariff data. This is to economics what creationism is to biology, astrology is to astronomy, or RFK thought is to vaccine science. The Trump tariff policy makes little sense EVEN if you believe in protectionist mercantilist economics.”
Editor of The American Prospect David Dayen notes that there is no apparent policy behind the tariffs, no thought, for example, as to whether it is even possible for the U.S. to ramp up the kind of domestic manufacturing Trump claims to want. Josh Marshall of Talking Points Memo points out that building and establishing a new plant in the U.S. will take a minimum of three to five years even if investors are inclined to support one.
So, what's the point to this stupidity - unless there are unexplained ulterior motives.
Jeff
No. of Recommendations: 8
So, what's the point to this stupidity
The point of stupid is stupidity, there is no other. Anyone who couldn’t see the raft of stupid that masqueraded as campaign promises wasn’t listening. Or was stupid, but I repeat myself.
There is no “master plan”. There is no “logic”. There is nothing. This is fly-by-the-seat-of-your-pants government, being run by an addled ADHD toddler who has somehow managed to keep an entire party in thrall and afraid to offer countervailing opinion. As I saw on one commentary the other day, if he walked out of the bathroom with his fly open nobody would have the guts to say “Sir, your fly is open.” Instead, they would all unzip their flys as though it was the most natural thing in the world.
This is not going to moderate. This is what we’ve got.
The only benefit to the ADHD is that it *could* all change tomorrow, but possibly for even worse.
No. of Recommendations: 2
As I saw on one commentary the other day, if he walked out of the bathroom with his fly open nobody would have the guts to say “Sir, your fly is open.” Instead, they would all unzip their flys as though it was the most natural thing in the world.
Perfect. That made me laugh out loud, but it is too damned true. The Republicans around Trump have taken sycophancy to unheard of levels. It's so disgusting.
No. of Recommendations: 14
So, what's the point to this stupidity - unless there are unexplained ulterior motives.
People need to stop thinking of Idiot's actions in terms of trying to do what is best for the USA. It's all about what is best for his wealth and power. The point was to use essentially insider trading to line his pockets. It's a huge transfer of wealth to him and his cronies. If he ruins our economy in the process, all the better. It makes us easier to control.
Things ARE very different this time.
IP
No. of Recommendations: 4
Hi IP,
Agreed things are different this time, but how different? Things were different when Covid locked down the global economy, as another example.
I am actually heartened a bit by the sheer scale of the economic wreckage that Trump is creating with the wave of a hand. He won't be able to stage a successful coup if the people are united against him, and he's creating a lot of ill will among the people right now.
No. of Recommendations: 20
Agreed things are different this time, but how different? Things were different when Covid locked down the global economy, as another example.
Earth shakingly different, unless you think the US economy can thrive independently of the rest of the world. Our reputation barely survived his first term, but I had hope that the rest of the world could forgive that mistake as long as it was never repeated. Now we see a doubling down of bad moves this term. Our previous allies have come to realize that we are not dependable in any way shape or form, and that treaties with us are meaningless because we have a leader who will not keep his word. In that way, we are more dangerous than Russia, because with Russia, you know what to expect. Well, the rest of the world now knows to expect uncertainty with us, which is not a feature one seeks in an ally.
Not only will all efforts be made not to buy American products, nor sell to the USA, the imprisoning of visitors is causing countries that have spent serious tourism dollars to counsel their citizens not to come here, resulting in mass cancelations of trips to the US. It has become patriotic for Canadians not to come to the US, and causing even a sell off of vacation homes in FL, even in their down market. Maine is getting crushed. This precipitous drop in tourism is of course is a huge hit to our economy all in itself.
And how do the US citizens spend money in this climate of slashing jobs and benefits? I guess that is your one hope for a rebounding economy, assuming price inflation from the economic and political stupidity doesn't simply remove the ability for discretional spending. After all, it only took 4 years for half of the voting adults to develop amnesia and vote the Idiot back into office.
Covid was temporary. I don't know that this is resolvable, at least not in my lifetime, which should be another 30-40 years.
Yeah, depressed.
IP
No. of Recommendations: 13
" Our previous allies have come to realize that we are not dependable in any way shape or form"
I have that exact same worry. Even if Trump comes back from his latest golf excursion
( another $10,000,000 taxpayer expense, where's DOGE when we need it, lol ) on Monday and
declares that the tariffs are now off, why would anybody believe him ?? Trump says he wants
things to be built in America. Factories will need to be built, or expanded. Capital will need
to be spent. Why would any business take that risk ? If they do start expanding, will Trump
try to extort them with the threat of a tariff on them and not on their competitor ?
Anything is possible with The Great Nitwit.
"Yeah, depressed"
yup. I'm staying really active outdoors. Kayak season will be here in another 2 months,
looking forward to that. In the meantime, hiking, biking, some trail running. And
woodworking in garage shop. Trying to balance the need to keep up on all this crap, and
the need to not go crazy thinking about it all, lol.
No. of Recommendations: 3
Covid was temporary. I don't know that this is resolvable, at least not in my lifetime, which should be another 30-40 years.
Covid killed 7 million and left 400 million with long covid. I get what you are saying, but there were permanent global ramifications of the pandemic on many levels.
I know there are some seriously terrible outcomes on the table, and the economic consequences are going to be severe for as long as the insanity continues, but if we assume that the US democracy is resilient enough that the Dems take back control of Congress come the midterms, in response to a crashing economy, then Trump's power will be much more constrained, MAGA will be voted out of office in four years and they won't have any way to conduct a paper coup any more than Trump was able to last time, and the Dems will go about putting things back in order.
I don't believe that MAGA will be able to command the military to do otherwise, though Trumps moves to install loyalists is quite worrying.
Trust will take decades to restore, but most countries will gladly accept a normalization of trade, and things will return to some semblance of normalcy fairly quickly.
Trump seems steadfast now, but if the economy is crashing hard in four months, don't we think he'll declare victory and open trade back up with much more limited barriers? So we probably won't have to wait 4 years for some normalization?
No. of Recommendations: 9
Covid killed 7 million and left 400 million with long covid. I get what you are saying, but there were permanent global ramifications of the pandemic on many levels.
Yes. And it hit on a global basis. I am one of those with (thankfully mild,) long Covid, so I more than understand that it was not insignificant. It was, however, not the global repositioning of leadership. What we are seeing now is a seismic shift of power, along the lines of the decline of the British Empire. It is only with mitigation that will allow us to retain any world sentiment other than that of a laughingstock.
I know there are some seriously terrible outcomes on the table, and the economic consequences are going to be severe for as long as the insanity continues, but if we assume that the US democracy is resilient enough that the Dems take back control of Congress come the midterms, in response to a crashing economy, then Trump's power will be much more constrained, MAGA will be voted out of office in four years and they won't have any way to conduct a paper coup any more than Trump was able to last time, and the Dems will go about putting things back in order.
Wouldn't that be lovely? Sadly, our reputation is no longer in our control. We the people, or at least a slim majority of the voters, chose this madness. We are at fault, not just those now in office. It could be possibly forgiven once, but to see what he was capable of and then vote him in AGAIN, no longer allows us to simply say Oops. As a nation, our judgement is in question. How can our previous allies ever trust that this child-nation can be trusted to vote for leadership in a way that provides continuity of trust in our written word, our contracts with other countries. They would be a fool to ever believe that we all can have each other's back, and should do all they can to become independent from us in every way possible. America First will soon be America Only.
Trust will take decades to restore, but most countries will gladly accept a normalization of trade, and things will return to some semblance of normalcy fairly quickly.
How many decades do most of us have? 3-4 for us. Even if tariffs disappear today, there will be countries looking for ways to work around us long term, to develop alternate supply lines and buyers, allying themselves without the US in the mix other than in the periphery. How does one plan an investment strategy around that?
The damage has been done and I do not see a pathway to full recovery. We are going from a global economy to a centralized economy. While there are likely to be multi-country alliances forming cooperative economies, they will be reluctant to include us. How long will that take to settle in and how do we plan for the aftermath, understanding that there will be aftershocks to the seismic shock that has been imposed.
There will be no return to normalcy. The question is can the US survive economically on it's own while trying to get others to rejoin us as allies without too high a premium that we have to pay because of the risk of dealing with us. Any short term return to "normalcy" will likely be transitory, while new world order plans are developed and place in action.
We all need to consider what that new normal will be and how to survive the transition.
IP
No. of Recommendations: 15
We all need to consider what that new normal will be and how to survive the transition.
Indeed.
After several days of careful reading and pondering since the tariff-o-rama, my main thought is that the tariffs are a sideshow. They are not really the important thing going on. Though there will be some entities hit very hard, it's mainly just about money, and money like water will find a way to flow a different way. Even if we don't know the new destination or how many won't quite make through the journey, there will still be a global business sector doing stuff.
I believe the bigger concern about the "new normal" is the geopolitical alignment issues. Some done, some happening, some announced, perhaps more to come if one believes Mr Bessent's writings. For example, there was a time that it was considered impolite to annex other countries' territory, but that seems well within the Overton window now. I don't think I would ever call that normal (new or not), but it seems to be the new...something.
Jim
No. of Recommendations: 0
but by bessent and lutnick's own words, the critical ingredient for reshaping dependent trade+security+alliances is trust !
which they also know is missing based on every MAGA action with allies, not to mention prior trump trade agreements.
somehow flooding the zone so no one can track what is agreed will accomplish their goals?
No. of Recommendations: 2
For example, there was a time that it was considered impolite to annex other countries' territory, but that seems well within the Overton window now. I don't think I would ever call that normal "...remarks by General Mark W. Clark in his 1950 memoir
Calculated Risk.
Clark wrote about American war cemeteries in Italy: "Here was our only conquest: all we asked of Italy was enough of her soil to bury our gallant dead" (1)
-- sutton
(1)
https://boards.straightdope.com/t/is-colin-powell-...NB: later paraphrased and used by Colin Powell)
