I’m going to be scathing in my critique because these people are both dishonest and incompetent and deserve to be called out on it.
Here’s their formula:
It’s a ridiculously simplistic formula.
First, a stylistic quibble. What is up with those asterisks in the denominator? I’ll give the authors the benefit of the doubt and assume that they wanted the formula to be understandable by people who aren’t familiar with standard math notation, in which the juxtaposition of variables indicates multiplication. But to see it written that way in an official document is just… weird.
The i subscripts in the formula just indicate that the formula is to be applied to one country at a time — country i. I’ll therefore omit the ‘i’s from the rest of the discussion.
∆𝜏 is the amount by which the tariff currently being placed on that particular country should change (according to the Trump administration bozos) in order to drive the bilateral trade deficit to zero. In other words, 𝜏 (the existing rate) + ∆𝜏 (the change in rate) would be the correct final rate (according to the formula) to achieve the dubious goal of a trade balance.
The inanity of insisting on bilateral trade balances
We’re off to a bad start already, because the notion that every bilateral trade deficit should be zero is ridiculous on its face. Let’s look at a simplified example. Suppose Malawi sells us only mangoes, and the US (henceforth ‘we’, since I’m American) sells them only air conditioners. In order for the trade deficit to be zero, we need to buy the same dollar amount in mangoes that they buy in air conditioners, and we should adjust the tariffs we impose on Malawi until that happens. Why is this desirable? Why should the amount of mangoes be linked to the amount of air conditioners? Who the hell knows? It’s just Trump’s idiotic obsession, and it makes no sense.
To make the stupidity even more obvious, think of an analogous situation. Ernesto sells tacos from a taco truck, and George runs a landscaping business. George occasionally buys tacos from Ernesto, and Ernesto hires George to mow his lawn. Suppose Ernesto pays more to George each month than George spends buying tacos from Ernesto. Is Ernesto being cheated? Is he subsidizing George? No and no. George gets every taco he pays for, and Ernesto gets his lawn mown on schedule. It would be ridiculous to say that either of them is being cheated, and ridiculous to say that the goal should be to make the amounts even.
Why is Trump obsessed with trade deficits? It’s because he is confused enough to believe that the existence of a bilateral trade deficit — a trading deficit with a particular country, Malawi in my example — means that they are cheating us and that we’re subsidizing them. He actually believes that we are just handing over the money, getting nothing in return. In reality, we get every frikkin’ mango we pay for, and they get every air conditioner they pay for. No one is being cheated, and to demand that the dollar amounts should match is idiotic and pointless.
Trump actually declares in his executive order that trade deficits are a “national emergency”. He does this because he doesn’t have the authority to impose tariffs unless it’s a national emergency. Otherwise, the job falls to Congress, where it belongs. Trump is lying about the supposed national emergency.
The formula
According to the USTR statement, the x in the formula is the dollar value of what we export to a particular country, while m is the dollar value of what we import from them. The numerator, x – m, is therefore equal to the trade imbalance. If x is bigger than m, then the difference is positive, and we are running a trade surplus. If x is less than m, then x – m is negative, and we have a trade deficit. But note that they have it backwards in the formula: it should be m – x, not x – m. Why? Because the denominator is positive. If both the numerator and denominator are positive, as they would be in the case of a trade surplus, the formula would deliver a ∆𝜏 that is positive. In other words, the formula as written would actually increase the tariffs for the countries with whom we have a trade surplus, and it would decrease the tariffs for countries with whom we have a trade deficit. The formula therefore punishes the (supposedly) good guys and rewards the (supposedly) bad ones, which is opposite to the administration’s intentions. One more indication of their clown car incompetence.
They could easily have corrected the formula if they were aware of the error. Just put a negative sign in front of the formula, or swap x and m, or redefine x and m as the amounts exported and imported by the other country, instead of the amounts exported and imported by the US. Any one of those three would fix the problem, but no.
Let’s assume that we have corrected that mistake for them and that the numerator now equals the amount of the trade deficit, not the surplus. What about the denominator? Well, it just so happens that the values they chose for 𝜀 and 𝜓 are 4 and 0.25, respectively. Those multiply to 1, thus canceling each other. How convenient. These charlatans actually and blatantly chose the values so that they would cancel out, instead of using the most accurate numbers they could find in the literature. They cheated.
After that suspiciously convenient choice of parameters, the formula is now just ∆𝜏 = trade deficit divided by total imports:
Do they actually apply this formula? No. They massage its output even more. They divide ∆𝜏 by two, for no good reason. That means that for the formula to match the actual tariffs, they should multiply the denominator by 2. They fail to do that, as you’d expect. Why 2? My hypothesis is that even those dunces realized that the numbers they were getting from the formula were ridiculously large, and dividing by 2 was a way to get them down to a range that they considered reasonable. More number fudging with no theoretical justification.
Next problem: according to the corrected formula, ∆𝜏 should be negative in the case of trade surpluses. That is, we should decrease the tariffs on imports from those countries. If the existing tariff rate is small enough, it should even go negative, according to the formula, in order to balance our trade with that country. Trump doesn’t like that, so he has arbitrarily declared that everyone will pay a minimum of 10%, whether there’s a trade deficit or a trade surplus. In other words, the policy, which is already misguided, is also unfair — it says that it’s OK for the US to screw other countries by imposing high tariffs, even if they’re doing the “right” thing and allowing us to run a trade surplus with them.
The actual rates
Here are the charts spelling out the actual tariff rates.
The chart labels them “Reciprocal Tariffs”, but that is a lie, since the formula doesn’t take into account the tariff rate charged by the other countries on our exports to them. It’s completely missing from the formula. They aren’t reciprocal tariffs, they’re misguided tariffs in response to trade deficits, and they punish US importers instead of the countries selling us those goods and services.
The label on the middle column is wrong for the same reason, and it’s even further wrong because it depicts a bilateral trade deficit as a quantifier of “currency manipulation and trade barriers”, which it isn’t. We can run a bilateral trade deficit for no other reason than that Americans want more of what the other country is selling us than they want from us. That’s not “currency manipulation and trade barriers”, and the Trump administration is dishonest for trying to sell it that way.
The numbers in the middle column are apparently those that come straight out of the formula. You can tell, because the tariffs that are actually being imposed by the US are just the middle column divided by 2. That’s the arbitrary factor of 2 I mentioned above. The only exceptions are in those cases where dividing by 2 would leave a less than 10% tariff, in which case the tariff is set to 10%. Gotta make sure that everyone gets screwed at least that much.
The US Trade Representative’s explanation
Now some excerpts from the USTR statement. The very first paragraph:
Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports.
Well, duh. The phrase “tariff and non-tariff factors” covers literally every possible factor in the entire world. Yes, there are actual reasons that we buy more in mangoes from Malawi than they buy from us in air conditioners. Therefore we should conclude that we’re getting ripped off?
While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero.
Not by any reasonable person. You need to do the homework before making policy decisions that will affect the entire world economy. If they want less of what we’re selling than we want of what they’re selling, that can lead to a trade deficit, independent of all the factors they list above.
This doesn’t mean that trade practices can’t be unfair, but it does mean that to assume something nefarious is going on merely because we’re running a bilateral trade deficit is stupid.
If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair.
No. If we like Malawian mangoes more than the Malawians like our air conditioners, nothing is broken. Nothing is unfair. No reason to blindly punish the Malawians. It just means that American demand for Malawian mangoes is greater than Malawian demand for American air conditioners. No big deal.
A case could be made for nudging the US’s global trade deficit — which is the aggregate trade deficit we’re running with all of our trading partners put together — toward zero, but trying to eliminate every bilateral trade deficit is bonkers. These people are clueless.
Consider an environment in which the U.S. levies a tariff of rate τ_i on country i and ∆τ_i reflects the change in the tariff rate. Let ε<0 represent the elasticity of imports with respect to import prices…
Right there they say that ε < 0, but a few sentences later they assign it a value of 4. The last time I checked, 4 was greater than 0, not less. Their sloppiness is consistent, at least. What is wrong with these folks?
let φ>0 represent the passthrough from tariffs to import prices, let m_i>0 represent total imports from country i, and let x_i>0 represent total exports. Then the decrease in imports due to a change in tariffs equals ∆τ_i*ε*φ*m_i<0. Assuming that offsetting exchange rate and general equilibrium effects are small enough to be ignored, the reciprocal tariff that results in a bilateral trade balance of zero satisfies:
As noted earlier, they have the numerator backwards. It should be positive for a trade deficit, not negative, in order for ∆𝜏 to be positive, which represents an increase in tariff rates.
To calculate reciprocal tariffs, import and export data from the U.S. Census Bureau for 2024. Parameter values for ε and φ were selected. The price elasticity of import demand, ε, was set at 4.
Which inside the Trump administration is less than 0, lol. And how convenient that εφ multiplies to 1, as noted above.
Recent evidence suggests the elasticity is near 2 in the long run (Boehm et al., 2023), but estimates of the elasticity vary. To be conservative, studies that find higher elasticities near 3-4 (e.g., Broda and Weinstein 2006; Simonovska and Waugh 2014; Soderbery 2018) were drawn on. The elasticity of import prices with respect to tariffs, φ, is 0.25.
It wasn’t to be conservative. It was to fudge the numbers so that the product εφ came out to be 1. And picking a value of 4 for elasticity isn’t “being conservative” in the sense of “this value is more likely to be correct”. It’s conservative in the sense of “we’d better make this number big because otherwise the tariffs will be so outrageously huge that everyone will see that we’re idiots.”
Think about it. They want φ to be small (whether or not the evidence supports it), because they want to maintain the fiction that other countries will mostly absorb the tariffs and that importers and retail customers will shoulder less of the burden and therefore experience less inflation. On the other hand, a small φ balloons the value of ∆𝜏 to ridiculous levels. So they set 𝜀 to 4 to bring ∆𝜏 down, even while acknowledging that the true value of 𝜀 is closer to 2.
The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021).
I haven’t verified that, but either way I would sure like to see the actual number. Why didn’t they include it? Is it really 0.25? In any case, the question of pass-through to retail prices is irrelevant when you’re trying to determine which country is absorbing the cost of the tariffs. It’s the pass-through factor to importers that is relevant, and that is close to 1, even if the pass-though to retail customers is less. That means that US importers are bearing the cost of the tariffs and passing some of that cost on to consumers. It’s inflationary, and it’s a tax by the US government on US importers, not a tax on foreign countries. Which contradicts Trump’s whole rationale.
The reciprocal tariffs were left-censored at zero.
No, they were “left-censored” at 10, as you can see by looking at the charts. 10 is the minimum tariff you’ll see in the third column of the charts.
Higher minimum rates might be necessary to limit heterogeneity in rates and reduce transshipment.</p
No explanation of why “heterogeneity in rates” is to be avoided, and no comment on the fact that it isn’t avoided, given the large range of new tariff rates in the third column of the charts. That means there’s still plenty of incentive for transshipment. Take Vietnam, for instance, with a new rate of 46%. There’s a *lot* of incentive for them to transship through one of the countries with a 10% rate.
Tariff rates range from 0 to 99 percent.
There is no inherent limit. Tariffs could be 100%, 180%, or 2100%. 99% is an arbitrary limit. Tariffs could even be negative in a perverse world, in which case the government would be giving importers a bonus for importing more and nudging us toward a trade deficit. Obviously that wouldn’t happen in practice, but my point is that the 99% is arbitrary, and anyone who thinks tariffs are limited to being less than 100% doesn’t understand tariffs.
The unweighted average across deficit countries is 50 percent, and the unweighted average across the entire globe is 20 percent.
It’s pointless to state the unweighted average. An unweighted average is really just a weighted average with all of the weights set to 1. That gives Liechtenstein equal weight with China, which is stupid. Our trade volume with China is some 1,770 times as great as our trade volume with Liechtenstein, but these geniuses are weighting them evenly and presenting the average as if it had some kind of significance. Morons.
Weighted by imports, the average across deficit countries is 45 percent, and the average across the entire globe is 41 percent. Standard deviations range from 20.5 to 31.8 percentage points.
Here, they tell us that the import-weighted average of tariffs is 41 percent. Combine that with their assumed pass-through rate of 0.25. meaning that exporters in other countries will shoulder 75% of the tariff burden. That’s unrealistic and it clashes with the actual data, but even if you take the Trumpers at their word and assume that only 25% of the additional cost due to tariffs is passed to importers, that’s still over 10%, because 0.25 * 41% is greater than 10%. 10% import inflation! So much for Trump’s campaign promise: “I’ll reduce prices on day one.” Idiot.
Good job, Trump supporters. By voting for him, you put power in the hands of these dishonest and incompetent economic doofuses.
It seems clear to me that Trump didn’t establish tariffs based on any model at all, but rather decided arbitrarily what tariffs he felt satisfying, and created a bogus model to fit his preferences. Yeah, they used a bunch of greek letters in a rather silly attempt to make Trump’s nonsense look “scientific”, but economics have nothing to do with it. If the mad king says black is white and up is down, his flunkies have no option but to do their best to rationalize it. And apparently that approach worked – look at all this effort to analyze nonsense.
colewd,
Can you articulate why it is a problem – why the richest nation on earth needs poorer nations to buy as much from it as it buys from them?
Allan Miller,
You end up purchasing short term consumables like toys and giving up long term investments such as land.
They are both looking pretty grim, so I am not sure what difference that makes. I am not deeply invested in US American politics, but I understand that many people voted Trump because they were worried about their financial situation and were hoping that Trump could improve the US economy. Do you think these people have reason to feel cheated now that life is going to get a lot more expensive because of increased
taxestariffs?colewd:
As Allan points out, it isn’t necessary to try stupid ideas before concluding that they’re stupid. I could sandpaper my car to get it cleaner, but that would be stupid, and I know that without running the experiment. Trump’s tariff plan falls into the “too stupid to try” category.
Do you actually believe that Trump’s tariff plan is well thought out and that he understands the economy? The same guy who doesn’t understand the difference between a trade deficit and a subsidy, and who thinks we’re being cheated merely because Americans want to buy more of what another country is selling than they want to buy from us?
Trump’s tariff policy has nothing to do with improving government efficiency.
Don’t conflate the aggregate US trade imbalance with our bilateral trade imbalances. They’re different beasts entirely. A bilateral trade imbalance just involves two countries — in my OP, they are Malawi and the US — hence the ‘bi’ in ‘bilateral’. By contrast, the aggregate trade imbalance is the difference between how much we export to all countries in the world versus how much we import from them.
Eliminating our aggregate trade imbalance would not require eliminating every bilateral imbalance. It would just require that all of our bilateral trade deficits added together equal all of our bilateral surpluses added together.
In terms of my Ernesto/George analogy, suppose Ernesto’s income matches his expenditures — he sells just enough tacos to support his current level of spending. It sounds funny to label it this way, but you could say that Ernesto’s trade deficit with the rest of the world — his aggregate trade deficit — is zero. Trade is balanced. The situation is sustainable indefinitely as long as Ernesto’s income matches his expenditures.
Yet Ernesto has bilateral trade imbalances with practically everyone he trades with. He buys stuff from Walmart, which never buys anything from him. He fills his tank at the local gas station, and while the gas station owner buys an occasional taco from Ernesto, it’s nowhere close to what Ernesto spends on gas. Ernesto’s tax guy refuses to eat tacos, so every dollar Ernesto pays him contributes to their trade imbalance. Meanwhile, the manicurist a few blocks down loves tacos, as does the college professor’s daughter and the machinist who works across the street. They buy tacos from Ernesto, and he buys nothing from them. Trade imbalances all around. According to Trumpian logic, this is a crisis.
Yet all is well with the world. No need for Ernesto to harangue the tax guy into eating tacos, so that their bilateral trade balance is zero. No need for Ernesto to get pedicures he doesn’t want just to even things out with the manicurist. That would be idiotic. It would be Trumpian.
You haven’t looked very hard. Plenty of them do.
Well, maybe, but it does depend on the grade of paper. I was once rightly mocked for taking fine-grade emery to scratched glasses. I was undaunted and have since found judicious application of acetone renovates fine scratches miraculously, if you believe in miracles.
I’ve released three comments from J-Mac.
@J-Mac
Maybe we can resolve this via PM
Maybe you can explain why an aggregate trade imbalance is bad. Isn’t the country basically trading dollars for stuff? Maybe you are picturing an entire nation of Ernestos all living beyond their means, and borrowing to make up the difference? That would be an argument against the deficit.
Keiths,
The way I look at this tariffs fiasco is that Trump has turned the US into a mafia organization. He knows, or should know, the US overspends, and for this very reason he wants to punish the world… Yeah, we spent 1T $ on defence but we ain’t going to pay for it… the countries we must defend against will…
What could be wrong with this lack of thinking?
Flint:
Aggregate trade deficits aren’t inherently bad, but problems can arise if they grow to the point where they become unsustainable. They’re generally self-limiting, because running a trade deficit weakens your currency, making exports cheaper and imports more expensive. In other words, the currency market acts as a brake on growing trade deficits, preventing them from getting too large.
The US is a special case, though, as Jock pointed out earlier in the thread. That’s because the dollar’s status as the global currency of choice keeps it artificially strong, which in turn keeps imports cheap and exports expensive. The currency market’s braking power is thus diminished, so the trade deficit grows larger than it otherwise would.
No problem if the world’s appetite for dollars, US debt, and dollar-denominated assets remains strong, but potentially catastrophic if the world decides that dollars ain’t so great anymore. Then the currency markets will slam on the brakes and the US will suffer.
The irony is that Bill is worried about our aggregate trade deficit, yet the orange-faced dipshit he supports is actually making the danger worse. With him in charge, the dollar has become less desirable, as was dramatically illustrated recently. Normally, when the stock market falls, the bond market rises, because investors sell stocks and buy US bonds, which are considered a safe haven. But recently, in the midst of Trump’s tariff-induced chaos, bond prices fell along with stocks. With Trump in charge, the safe haven of US Treasuries doesn’t seem so safe anymore, and that makes the trade deficit more dangerous.
This needs to be elaborated, colewd. At this stage this is not an articulation of why trade deficit is a problem for USA. Your statement does not parse under any economic theory except perhaps the Great Replacement Theory, but that’s not an economic theory.
Then again, it was instantly clear that, same as Trump, you do not operate under any sort of economic theory, or economic practice for that matter.
Alito and Thomas dissent?
ETA
The Grauniad
Unfortunately, perhaps most unfortunately, he is not alone. He retains support from a large section of US voters (and is looking for ways to manipulate that to his advantage) and his “administration” is in cahoots with him.
In my assessment the coup already happened with the birthright and anti-USAID EOs. The transition into autocracy and totalitarianism has already taken place. USA is an unchecked totalitarian regime now. The only thing missing is to get their repressive machinery to work against own citizens on a massive scale. On a small but noticeable scale, targeting specific state officials, law firms and media companies for their positions which were fully correct both in fact and under law until two months ago, it is already in motion.
Courts do not matter in USA. Trump committed insurrection and treason on January 6, 2021. What did the courts do? Confer absolute impunity to him and make him president again, sharply contrasting with how treason is treated in the civilised world, e.g. Bolsonaro in Brazil or Yoon Suk Yeol in South Korea.
Check out these statements by Stephen Miller, the #1 guy who has Trump’s ear. He is talking about the 9-0 SCOTUS decision against Trump administration, and he is talking about it as if it were in the administration’s favour. His pretty much every statement of fact is false:
– The original judge ordered Garcia extradited from El Salvador :: false
– Garcia is a citizen of El Salvador :: this does not justify the deportation in any way
– Nobody was mistakenly deported anywhere :: the administration officials’ depositions under oath in court documents say the opposite
– Garcia is an illegal alien :: false
– And so on with everything else he says
I grew up in Brezhnev’s USSR and I do not remember this blatant institutionalised lying in very plain matters of fact from there. (OTOH I know Putin is very comfy with it. The difference is probably whether one has been trained by the secret service or not: Brezhnev was not, Andropov was, and so was Putin.)
Trump administration is a totalitarian regime that has taken matters to its own arbitrary hands and ignores court decisions as it pleases. Court decisions are just worthless paper to them.
Erik,
Jesus, Erik, you’ve saved me from worrying whether I was being too pessimistic.
Allan:
colewd:
Erik:
Bill has some strange ideas. Earlier he suggested that tariffs would somehow make governments more efficient, and that “long term this will improve our standard of living.” Could you connect the dots for us, Bill? How do tariffs promote governmental efficiency?
He has an equally strange idea about the implications of a trade imbalance. Why would a trade imbalance cause people to shift their spending to “short-term consumables”?
A trade deficit exists whenever imports exceed exports, regardless of the goods and services involved. Bill presumably approves of people working hard, building factories, and improving productivity, but he doesn’t seem to realize that all of that is perfectly compatible with (and can even cause) a trade deficit. Think of a developing country that borrows money so that it can import building materials, manufacturing equipment, expertise, etc., in order to establish a manufacturing base. It takes time for those factories to come online, work out the kinks, and start producing goods for export. In the meantime, the cost of the imports contributes to the trade deficit. If that country’s leaders are as dumb as Trump, they think “Oh no! Deficits bad, surpluses good!” and start slapping tariffs on imports in order to bring them in line with the country’s meager exports. Which is exactly what they shouldn’t be doing under the circumstances.They’re artificially raising costs for people who are investing in the country’s future, making it more difficult for them to succeed. In other words, they are shooting themselves in the foot, Trump-style. Does that sound like a good idea to you, Bill?
Are you starting to understand why trade deficits aren’t the bogeymen that you and Trump think they are, and why the mindless pursuit of trade balance is foolish?
You spurred me to a bit of historical research leading me to an article (apologies, may have posted this before) analysing the reasons for the rapid collapse of the Soviet system.
Maybe Trump is sowing the seeds of his own collapse. Do you see any parallel with Kosygin and Brezhnev?
ETA, the author’s point about control:
Twenty years ago, Mikhail Gorbachev, his academic advisors, and his rent-seeking accomplices destroyed the Soviet administrative-command economy.
seems prescient in light of Musk, Bezos, Zuckerberg etc.
The Chinese had this to say about Trump’s tariffs, according to the Guardian:
I don’t think they are wrong here.
ETA: Apologies, it has been a long time since I posted here and I don’t remember how to insert quotes and links. [quote] doesn’t seem to work here.
keiths,
I did not make this claim. Why are you making straw man arguments?
I simply stated Government becoming more efficient is good for long term wealth.
Trade imbalances are a strategic problem for exactly how I articulated the problem which is trading short term consumerism for long term investment thus hurting our nations long term wealth.
faded_Glory,
They have a strong point here which maybe being addressed for first time in 25 years. Time will tell if the US is on the road to becoming healthier economically.
It may be the intention to address this point, but in my view the way Trump & co. go about it will be extremely destructive to lots of people, Americans not excepted.
A fundamental issue is the vastly inflated sense of entitlement of so many people. Everybody wants to have the latest gadget, the fastest or biggest car, several holidays a year, subscriptions to endless streaming services – you name it and they will want it. If they can’t afford it, no problem, take out a loan, easy-peasy.
The same for nations at large, and where governments get elected democratically the politicians have little choice but to go along with this mindset and always promise more. If they don’t, they won’t get into power, simple as that.
This reliance on borrowing to keep ones life style going is of course long-term destructive, both at a personal and at the national level. Although we shouldn’t confuse national budgets with household budgets, because nations can always create more money, there is another limitation that has recently become quite visible: the financial markets will only take so much before they draw the line. In the UK it was Liz Truss that caused a meltdown in the markets and she had to quickly backtrack, followed by her ousting. In the US we have seen how quickly Trump had to backtrack when the bond market got spooked. Nobody can beat those markets, at least not in the prevailing economic system of the West.
As a consequence, changing direction is not going to be easy or quick. It will probably take a significant change in the mindset of consumers to make a real difference. Trump’s ‘medicine’ is misguided and will seriously harm, if not kill, the patient. What is really needed is for the patient to understand their own destructive behaviour and modify it themselves. Cut down on expenditure where you can’t afford it, think long term and don’t blame everybody else for your own foolishness.
Unfortnately, that is not very likely to happen, is it now? More likely is that they will find external scapegoats to deflect attention from their own failures. History teaches us what will happen next.
Nothing screams “government efficiency” like creating an agency named after a meme crypto coin (literally born as a joke) to do the job of an agency that already exists and is supposed to serve the same purpose (the Government Accountability Office).
Anyone with half a functional brain cell can see through all this crap: DOGE is not about efficiency, it’s about sidestepping a preexisting non-partisan agency (and also the law) and making the government small to implement the delusional, social Darwinist policies of the Heritage Foundation, to cut social programs to give (even more) tax breaks to the uber-rich, and also because a small government is easier to pack with loyalist minions across the board, but I repeat myself.
Bb code is much neater than HTML. Took liberty of editing tags for you. Use greater-than and less-than symbols (carets) instead of square brackets and blockquote instead of quote. You can also use strong, em, or i inside carets for emphasis.
Welcome back, Faded_Glory
There are obvious important reasons why USSR and Trump’s USA cannot be compared. One is that in USSR it was a fundamental economic principle that people should not have (significant) private property. Another is that by the time of Brezhnev USSR was an established country, a form of government with decades of calcification under its belt.
A more ready comparison is with Nazi Germany, a country where Hitler did his internal regime change swiftly, while property relations remained the same for the core people and for the ruling class. But even here there are differences. Hitler rose to absolute power swiftly, but it still took years to solidify his position and give form to a different regime, and he paid close attention to ensure popular support by genuine improvements to national economy and welfare.
Whereas Trump’s regime is barely three months old and his programme consists entirely of populist slogans, vapid hot air for exclusively destructive purpose. Nothing of what Trump has said or done would improve, could improve, or has improved anything either domestically or internationally, short or long term. Is there anything he has said or done that could be construed as an improvement to the economy? Lower price of eggs? How was he supposed to achieve it? He did not say, but voters did not take note. And of course by now he has already tanked everything.
I don’t think Trump can collapse the entire country so much that it would be taken over by another, but the domestic perception of what the federal government is and should be has taken an incurable hit. Trump has managed to radically reduce the international role of USA, and there is no bouncing back from this. The arrogant ineptitude of his administration is absolute, and so is the inefficiency of the famous checks and balances that were supposed to protect Americans from someone like him.
What’s populist about Trump and his policies? He seems to be the polar opposite of that to me: all for the robber barons, nothing for the working class.
Well, since I was comparing him to Hitler: Trump screamed “THEY ARE EATING THE PETS!” during the presidential debate. This clearly tipped the scale in his favour in the eyes of American voters. Americans are worse xenophobes than you might think.
No, you don’t… land is not part of the trade equation. Say you buy raw materials you sell what you make with them to your people. The people selling those materials are under no obligation to buy any excess of what you make with them. You are in.no way harmed if they don’t.
Thank you Alan, and also thanks for the help with the quotes. Is there a link to somewhere with an explanation of these codes?
dazz,
Gah, Musk and DOGE is a whole other gobsmaking ballgame! The tone-deafness of the richest man in the world brandishing a chainsaw to general cheers as he sacks, with no audit, tens of thousands of hardworking Americans. I mean… Park Rangers? Enjoy fire season, I may have said before.
People say: “How can they be stupid, they’re billionaires?”. No idea mate. But stupid, they so clearly are. Crafty, ruthless, astute in some respects. But all I hear from them is stupidity on a colossal scale. No-one dare tell them ‘no’. They start to believe in their own infallibility. As do a whole bunch of others, mesmerised by the ability to accumulate wealth.
dazz:
His policies aren’t populist, but his rhetoric is. Some examples from the campaign:
“They want to take away my freedom because I will never let them take away your freedom.They want to silence me because I will never let them silence you.”
“I am being indicted for you.”
“In 2016, I declared: I am your voice. Today, I add: I am your warrior. I am your justice. And for those who have been wronged and betrayed: I am your retribution.”
It’s pitiful that millions of Americans fell for crap like that.
This is the rhetoric that Americans fell for. And then after having experienced it for four years, they wanted more of this unabashed lying self-praise, this time spiced up with fascism.
keiths:
colewd:
I based my statement on your response to Corneel’s question about tariffs. But if you recognize that tariffs aren’t a spur for governmental efficiency, then good.
That leaves Corneel’s question unanswered, though. He asked;
How do you feel about Americans paying the tariffs? Do you understand that Trump is completely wrong when he says
He’s wrong. Here’s how it really works. Let’s say you’re importing $500,000 worth of electronics from China. The tariff is 145% of $500,000, which is $725,000. Let’s follow the money.
You pay $500,000 to the Chinese company
You pay $725,000 to the US government
The Chinese company pays $0 to the US government
Does that sound like a tax on China? You are the one paying the tax, and you’re going to have to pass some or all of that cost on to consumers, so it’s an indirect tax on them, too. Either way, it’s Americans who are footing the bill, not the Chinese. The Chinese pay zero. Zilch.
Trump doesn’t understand this, and he also doesn’t understand that bilateral trade deficits aren’t subsidies and that they don’t indicate that we are being ripped off. He’s completely lost.
You advocate a “let’s wait and see” approach, but why? Given a choice between a dumb plan hatched by a stupid guy who doesn’t understand basic economics, versus smarter plans from people who do understand economics, why choose the dumb plan? Why favor stupid over smart? Why pick the dumb plan and then hope that everything works out in the end, purely by accident?
faded_Glory,
Yes, somewhere. I’ll dig it out when I get chance. I promised Mrs F I would minimise doom-scrolling over the Easter weekend at least until the local Fête is over, (cours pétanque, omelette géante, guitaristes Catalans, auberge Éspagnole) so bear with me.
ETA : Found this comment on how to create links.
But what’s the unpicking plan? Is there an off-ramp?
Erik,
“Which is why I alone can fix it!”
Is this Hitler reborn? If so, what’s the plan?
Thanks Alan for the link.
By the way, when I click (Quote in reply) nothing really happens. All I get is a small box in the bottom left that says ‘javascript:void(null)’ . There is nothing in the reply box – isn’t it supposed to show the post I’m responding to?
Anyway, don’t worry about it now, enjoy your Easter and keep Mrs. Fox happy. Your Fête sounds amazing!
The US founders were well aware that no system of organizational checks and balances can survive leaders who do not respect them. Sure, the idea was that if one of the three branches gets out of line, the other two can (in theory) correct this. But of course, the other two have to WANT to correct it, rather than enable it. So we sit here and watch a Congress voluntarily give its constitutional powers to the executive to avoid accountability to their voters, and we have a Supreme Court (with some members on the take from billionaires) who, to be generous, are reluctant to oppose the executive for fear their orders will be ignored (because how can you tell a corrupt department of justice to police itself?) Even the mafia knew that corruption (disobedience from the lieutenants) could collapse the whole organization.
I don’t think you can blame the structure embodied in the constitution; corrupt management will destroy any organization. Polls recently indicate that a majority of voters in too many districts WANT corrupt management, provided it’s corruption congenial to their preferences.
This is not just about corruption. It’s about whether the system is a democracy/republic or a dictatorship/tyranny.
I blame the structure embodied in the United States constitution for being amenable to tyranny with no changes to the structure whatsoever. Just elect a given guy and that’s it. See the loops Hitler had to go through:
– Had to win over von Papen (the most important other party leader, there were actually more parties that Hitler had to juggle for years)
– Had to become the chancellor (equivalent of prime minister, not president which is a separate institution)
– As chancellor, had to pass Ermächtingungsgesetz to obviate the parliament (this is one entire branch of government down)
– A few months later, von Hindenburg (equivalent of president) died and Hitler appointed himself to his position too, making the power grab complete
What did Trump have to do? Gather donors and enablers and become the president. His executive disordering and dogeing are not the mechanism by which he would be able to become the dictator – they are the signs that he is the dictator. He did not have to change a single institution or piece of law to become a tyrant – the way he is going about things shows that he is.
Meanwhile people keep debating when the constitutional crisis might start or whether it is at hand to any extent. The peculiarity of the American system is that no changes to the constitutional order are required to make the government a whole different animal in a heartbeat.
keiths,
What I advocate for is not doing the same things over and over again that result in huge debt, huge debt service and large trade deficits.
Remember the definition of insanity 🙂
Another definition of insanity is fixing something that is not broken. You have not shown in any way that trade deficit or the current levels of national debt are problems in any way. And, if you were honest, you’d acknowledge that Trump is breaking things in plain sight, not fixing them. But you are not honest. Dishonesty is a sin, if you care, but no, you don’t care.
I doubt we are disagreeing very much here. Elect a corrupt leader, and NO structure embodied in ANY constitution can survive. Seriously, any constitution can say DO NOT DO THIS, and no matter how clearly it says so, if the leadership decides to do this anyway, the structure is irrelevant. If you look around the world, you will find many outright dictatorships despite constitutions closely based on the US constitution, which are being ignored. Even Russia has “elections”, as per their constitution. In fact, every nation in the world except Saudi Arabia claims to be a democracy. Their constitutions all say so.
I’d be curious what changes you’d suggest to the US constitution that would prevent Trump from violating them, especially if his party is in firm control of Congress and the Supreme Court. ANY verbiage can be ignored, any governing body can become corrupt. Do you seriously expect Pam “praise Lord Trump” Bondi to enforce the constitution or any law Trump doesn’t like? Do you think the Supreme Court will suddenly start honoring long-standing and repeatedly supported precedents if Trump doesn’t like them? Hell, Trump was convicted by a jury of trying to overthrow the government, and the Supreme Court ruled that the 14th Amendment didn’t mean what it plainly says unless Congress passes a law insisting it means what it says! But a law repeating what the constitution says would necessarily be found unconstitutional! The Court just said so!
So what alternative structure would you suggest? Not having any court at all? Not giving that court any power? As it is the court has full power, but when rulings are ignored, what can they do? Recommend that Pam Bondi arrest Trump?
Ultimately, the power of the government should depend on the voters, the check of last resort. But as Stalin said, “it doesn’t matter who the people voter for, it only matters who counts the votes.” There’s a good reason Trump is attacking the voting procedures (reserved by the constitution to the states, but so what?) The motto of any corrupt organization is “what are you gonna do about it?”
But of course, Trump regards democratic government as inherently broken, and is fixing this in plain sight. With the approval of half the electorate.
Sorry, but precious few countries have their constitutions “based on the US constitution” and I cannot think of any off the top of my head. Certainly in Europe the number of US-based constitutions is zero. Stop being America-centrically deluded and get real. This is just a minor aside for a start.
I showed you how many constitutional institutions Hitler had to clear out of his way to become the Hitler we all know. Do I have to tell you the number of times Putin has had to change Russia’s constitution or can you look it up yourself?
The argument that I am making is not that there should be a structure such that Trump would be unable to violate it. The argument that I am making is that there should be a structure that Trump is forced to violate in order to become the totalitarian dictator. If he does not have to break any major laws to be the dictator, then this would be a dictatorial constitution from the get-go, would it not?
An obvious recommendation is to have separate posts for head of state and head of government. Another would be proportional elections, so that America would get a proper multi-party system instead of miserly two parties. And these are such an enormous changes that it is never going to fly in USA, because it would make the American constitution Europe-based.
Here we could argue that the constitutional order of USA in fact did change before Trump started his second term. Had things gone as per the constitution, Trump would not have been able to become the presidential candidate, because the constitution does not permit insurrectionists. Also, the constitution does not allow absolute impunity to the president, but the Supreme Court granted it.
So the constitutional crisis actually began with those unconstitutional Supreme Court decisions. From this angle, the move towards authoritarian form of government in USA is larger than Trump. Somebody with strings in the Supreme Court saved Trump from justice and wants overt authoritarianism to happen.
colewd,
Ooh! I know this one! It’s believing billionaires know best, isn’t it? Twice…
keiths:
colewd:
If you’re worried about debt service, why do you support a plan that will make it worse? Trump’s actions are depressing bond prices, which increases the cost of servicing the debt.
Also, you didn’t answer my question. If you’re unhappy with the state of the economy and want to improve it, why pick a plan that is stupid, proposed by a guy who doesn’t understand economics and who thinks that tariffs are a tax on foreign countries, not on Americans; that trade deficits are subsidies; that we’re being cheated if we run a bilateral trade deficit with another country; and that tariffs are “a tax that doesn’t affect our country”?
When it’s a choice between stupid and smart, why pick stupid?
Axios article:
Inside Trump’s tariff brain
Quote:
And:
keiths,
Hi Keiths
Currently there is an attempt to downsize Government and balance trade. The current policies may not work but I think judging them on the first 3 months based on some short term, movement in equity and debt markets is not prudent.