I’d say that Donald Trump can’t be this stupid, but we’ve all seen him operate in the last few years. For the second time in my lifetime, I am wondering if we’re veering into oblivion and wondering if we can survive the next year and a half. (The first time was when Dubya won two terms.)
Right now, Trump is conducting the dumbest goddamn “trade war” in the history of international trade. You see, almost 40 years ago, the Republican Party, led by Saint Ronald Reagan, were in the middle of trying to break all labor unions in half and, as part of the tax cuts portion of their reform, they actually encouraged American manufacturers to relocate overseas, to the then-ancient economic power, Japan. As much as they complain about the cost of making sure they survive, the GOP truly hates the idea of there not being a social underclass in this country, so they do all they can to create one where it ceases to exist at some point in time.
Those of you alive in the early 80s remember this time in your history. We were just coming out of a period of what was called “stagflation,” which was an odious mix of rampant inflation and stagnant wages, two things many economists thought could never happen at the same time. In other words, for about a decade, we had watched the strongest economy in the history of the world start to falter, and it wasn’t pretty. So, here comes St. Reagan and the GOP coming in to save us.
Of course, they were never going to save us. The Republican Party as a whole lacks the ability to fix an economic mess. They did, after all, lead us into the Great Depression of 1929 and (years later) the Great Recession of 2008. Both times, they made matters worse, not better. It’s because the GOP believes in a cycle of deterrance and incentive that largely makes no sense.
For example, St. Reagan’s massive tax cuts led to massive deficits and the second worst recession of the post-war era, which occurred in 1982. Reagan’s bullshit was quite thick and he and the GOP laid it on all of us, to make us think it was just a blip, but it was not. Unemployment tickled the underbelly of 11% and the money supply was really bad, which means interest rates for most things were really high; a car loan could cost you 18-20 percent and many mortgages topped 12-14 percent. And the whole reason things were so bad is because Republicans had n way to fix it. Their tax cut scheme was based on something called “supply-side economics,” which assumes the economy is most affected by producers, when everyone knows that it’s consumers who have always driven the American economy.
Well, in that atmosphere, it actually made some short-term sense for manufacturers to relocate factories overseas. Since wages were stagnant, it made sense to use cheaper wages to make consumer goods. What we didn’t know was that the factories would move overseas and near come back. Most of the jobs we lost, we lost almost 40 years ago. The factories that made shit here have been rusting for more than a generation. And that alone makes Trump’s desire to move all manufacturing back to the United States pure fantasy.
Even if Apple wanted to make iPhones and iPads here, where are they supposed to do it? China already has the factories and the skilled workers to assemble these products. If they decided to build a plant in, say, Pittsburgh, where do the workers come from? It would take months or years to train them, and they would have to be paid more than the Chinese workers who make them now. It’s neither cost-efficient nor practical. At all. I know, in =our fantasies, it would be wonderful to reopen a Chevy plant in Flint, Michigan, but if they have to charge $25,000 for a sedan in order to make a profit, how long will those jobs stay there.
And that points to the stupidest aspect of Donny’s “trade war.” He truly thinks “trade wars are easy to win.” They’re not. And he seems to believe the tariffs he slaps on the goods coming here from China and other countries are paid by the Chinese, and that they will do anything to make it stop. However, imagine you’re a large company, like Apple, and 40 years ago you were encouraged to manufacture goods overseas, and now the same government that is now charging massive tariffs because you don’t make shit here. What do you do? In Trump’s fevered brain, they should be crying “Uncle,” (even though the Chinese are supposedly paying the hundreds of billions in tariffs, strangely) and demanding that US companies make their own shit here. See the disconnect?
And now, we have proof that the entire GOP is dumb as a post with regard to economics. Lindsey Graham collapsed onto his fainting couch and declared that the farmers who are being screwed by the trade war just tough it out. Yes, that’s right, “Little Lindsey” wants those farmers to just deal with a little pain for a while and it’ll be worth it. The thing is, that will never happen, and Lindsey Graham is smarter than trump, and certainly knows better. The farmers who sold goods to the Chinese did so because it was a reliable market of 1.5 billion people and they could get the price they needed. Now, the soybeans that used to be purchased from American farmers have been replaced by soybeans from Brazil and 0- you guessed it – Russia. Those sales are never coming back. For one thing, how will China be able to trust the United States going forward? The Chinese depended on US agriculture to keep those 1.5 billion people fed, and because of a whim, we proved ourselves undependable.
This is the flaw sported by virtually every Republican in government. They seem to have no concept that world trade is competitive now. This isn’t the 1950s anymore, where most of the world was rebuilding after World War II and we were largely intact. The advantages we had in the 60s has disappeared by now. Trade wars are not easy to win in a world where half the countries in the world are competing with us on something close to an equal status. In reality, trade wars are destructive and bad for the economy when they’re started by other countries. If China was still predatory on steel and memory chips, it would make sense to target just those items and use tariffs to stop them.
But Donny and Little Lindsey had better get it straight; starting a trade war without an end game in mind is purely stupid and we will come to regret it sooner rather than later. Inflicting pain on your constituents and then telling them “too bad” is really bad politics. Combine that with the bad policy of tariffs on trade we need, and no one should be surprised when the Republican Party takes a licking (and not the good kind, Lindsey) next year. We’re coming for ya, and trade agreements will be on the agenda…