Politics & Stuff

[Vesper 30,305]

https://paulkrugman.substack.com/p/will-careless-stupidity-kill-the

America created the modern world trading system. The rules governing tariffs and the negotiating process that brought those tariffs down over time grew out of the Reciprocal Trade Agreements Act, devised by FDR in 1934. The growth in international trade under that system had some negative aspects but was on balance very good for America and the world. It was, in fact, one of our greatest policy achievements.

Yesterday Donald Trump burned it all down. Here’s what just happened to the average U.S. tariff rate:

The tariffs Trump announced were higher than almost anyone expected. This is a much bigger shock to the economy than the infamous Smoot-Hawley tariff of 1930, especially when you bear in mind that international trade is about three times as important now as it was then.

The size of the tariffs, however, wasn’t the only shocking thing about the Rose Garden announcement. Arguably what we learned about how the Trump team arrived at those tariff rates — the sheer malignant stupidity of the whole thing — was even worse.

You might be tempted to dismiss complaints about the policy process as elitist snobbery. But credibility is a crucial part of policymaking. Businesses can’t plan if they have no idea what to expect next. Foreign governments won’t make policies that help America if they don’t expect us to respond rationally.

So what do we know about how the Trumpists arrived at their tariff plan? Trump claimed that the tariff rates imposed on different countries reflected their policies, but James Surowiecki soon noted that the tariffs applied to each country appeared to be derived from a crude formula based on the U.S. trade deficit with that country. Trump officials denied this, while at the same time the Office of the U.S. Trade Representative released a note confirming Surowiecki’s guess. Here’s their explanation:

 

Ignore the Greek letters, which cancel each other out. This says that the assumed level of a country’s protectionism is equal to its trade surplus with America divided by its exports to America.

Trump also set minimum tariffs of 10 percent on everyone, which means among other things imposing tariffs on uninhabited islands.

There’s so much wrong with this approach that it’s hard to know where to start. But one easy thing to point out is that the Trump calculation only considers trade in goods, while ignoring trade in services. This is a big omission. Notably, the European Union runs a substantial surplus with us if you only look at trade in goods — but this is largely offset by an EU deficit in services trade:

So if Trump’s people had plugged all trade with the EU, not just trade in physical goods, into their formula they would have concluded that Europe is hardly protectionist at all.

Where is this stuff coming from? One of these days we’ll probably get the full story, but it looks to me like something thrown together by a junior staffer with only a couple of hours’ notice. That USTR note, in particular, reads like something written by a student who hasn’t done the reading and is trying to bullshit their way through an exam.

But it may be even worse than that. The Trump formula is apparently what you get if you ask ChatGPT and other AI models to make tariff policy:

In my post immediately following the Trump announcement I speculated that Elon Musk’s Dunning-Kruger kids might be responsible for those tariff numbers. That now looks like a distinct possibility.

Who makes policy this way? The key point is that Trump isn’t really trying to accomplish economic goals. This should all be seen as a dominance display, intended to shock and awe people and make them grovel, rather than policy in the normal sense.

Again, I’m not being snobbish here. When the fate of the world economy is on the line, the malignant stupidity of the policy process is arguably as important as the policies themselves. How can anyone, whether they’re businesspeople or foreign governments, trust anything coming out of an administration that behaves like this?

Next thing you’ll be telling me that Trump’s people are planning military actions over insecure channels and accidentally sharing those plans with journalists. Oh, wait.

I’d like to imagine that Trump will admit that he messed up, cancel the whole thing, and start over. But he won’t, because that would spoil the dominance display. Ignorant irresponsibility is part of the message.

MUSICAL CODA

 

 

[Fulham Broadway 17,366]

Must be a lot of voters regret now

[Fernando 6,602]

3 hours ago, Fulham Broadway said:

Must be a lot of voters regret now

Probably. 

But I wish I could ask him a question. What is the plan for housing?

Why no one ask this? Trump is a mogul in real estate, surely he must have some plan. 

Unless his plan is to take us to recession so housing becomes cheap? 

[Fulham Broadway 17,366]

8 minutes ago, Fernando said:

Probably. 

But I wish I could ask him a question. What is the plan for housing?

Why no one ask this? Trump is a mogul in real estate, surely he must have some plan. 

Unless his plan is to take us to recession so housing becomes cheap? 

It will be more privatization, imo, - high end of the market is all theyre interested in. They dont give a flying fuck about 'ordinary struggling people' trying to start out on the housing ladder. Theyve already privatised Fanny mae and Freddie Mac who were federal and reponsiblefor 3/4 of sll mortgages. So basiclally houses will become more expensive

[Fernando 6,602]

10 hours ago, Fulham Broadway said:

It will be more privatization, imo, - high end of the market is all theyre interested in. They dont give a flying fuck about 'ordinary struggling people' trying to start out on the housing ladder. Theyve already privatised Fanny mae and Freddie Mac who were federal and reponsiblefor 3/4 of sll mortgages. So basiclally houses will become more expensive

Interesting I saw this old video from Trump. In it he discussed how many countries are ripping us of like Japan. 

It seems like he always wanted to have some kind of plan like all these tariffs. Insane. 

 

 

[Vesper 30,305]

'The most economically illiterate speech I have ever heard', analyst says • FRANCE 24 English

 

[whats happening 1,633]

17 hours ago, Fulham Broadway said:

Must be a lot of voters regret now

they deserve it.

[Vesper 30,305]

3 hours ago, Fernando said:

Interesting I saw this old video from Trump. In it he discussed how many countries are ripping us of like Japan. 

It seems like he always wanted to have some kind of plan like all these tariffs. Insane. 

 

 

Absolute bollocks.

Most every time the US has tried large tariff regimes in the past it has caused economic disaster.

Please go do the most basic of research about it before you listen to that profoundly ignorant fool Trump.

I will assist you with one such instance, one that greatly deepened The Great Depression:

 

Smoot–Hawley Tariff Act

https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act

The Tariff Act of 1930, also known as the Smoot–Hawley Tariff Act, was a protectionist trade measure signed into law in the United States by President Herbert Hoover on June 17, 1930. Named after its chief congressional sponsors, Senator Reed Smoot and Representative Willis C. Hawley, the act raised tariffs on over 20,000 imported goods in an effort to shield American industries from foreign competition during the onset of the Great Depression, which had started in October 1929. Excluding duty-free imports, the tariffs imposed by the act raised the existing import duties by an average of 20%, to the third highest levels in U.S. history, after the tariffs imposed on the world by President Donald Trump in 2025 and the Tariff of 1828.

Hoover signed the bill against the advice of many senior economists, yielding to pressure from his party and business leaders. Intended to bolster domestic employment and manufacturing, the tariffs instead deepened the Depression because the U.S.'s trading partners retaliated with tariffs of their own, leading to U.S. exports and global trade plummeting. Economists and historians widely regard the act as a policy misstep, and it remains a cautionary example of protectionist policy in modern economic debates. It was followed by more liberal trade agreements, such as the Reciprocal Trade Agreements Act of 1934.

 

snip

 

During his 2024 political campaign, Donald Trump pledged to institute similar tariffs.

In its annual forecast supplement for the global economy that was published in November 2024 ('Year Ahead' for 2025), The Economist observed that [in the wake of the Tariff Act] "... global trade fell by two-thirds. It was so catastrophic for growth in America and around the world that legislators have not touched the issue since. 'Smoot-Hawley' became synonymous with disastrous policy making".

 

[Vesper 30,305]

[Vesper 30,305]

Will Trump’s tariffs cause global economic crash? | Robert Kaplan | Fourcast

Channel 4 News
 

 

 

Donald Trump has announced global tariffs on an unprecedented scale, holding up a chart in the White House Rose Garden outlining what each country will pay and while the UK seems to have got off relatively lightly, almost nowhere has escaped America's determination to bolster its home-grown trade and manufacturing.

Even the penguins that are the only inhabitants of a chain of remote Antarctic islands have been slapped with a 10 percent tariff. Prices in the US are likely to go up. The global economy faces a period of chaos amid plunging markets. But is a trade war inevitable? And could it spiral out of control and escalate into something much worse?

For this episode of the Fourcast, Krishnan Guru-Murthy is joined by the American author and commentator Robert Kaplan whose writing examines the nature of US power, and Channel 4 News Economics Correspondent Helia Ebrahimi.

Edited April 4 by Vesper

[Vesper 30,305]

[Vesper 30,305]

"American Empire Is in Decline": Economist Richard Wolff on Trump's Trade War & Tariffs

 

[Fernando 6,602]

Yes oil coming down and 10 year coming down is just one thing, recession. 

Gold still holding strong but I bet they sell that one fast next week as well. 

[Vesper 30,305]

UK police charge comedian Russell Brand with rape

https://www.msn.com/en-gb/news/uknews/uk-police-charge-comedian-russell-brand-with-rape/ar-AA1Cim1R

[Vesper 30,305]

11 minutes ago, Fernando said:

Yes oil coming down and 10 year coming down is just one thing, recession. 

Gold still holding strong but I bet they sell that one fast next week as well. 

gold is a safety valve, a hedge against inflation and economic turmoil

[Fernando 6,602]

8 minutes ago, Vesper said:

gold is a safety valve, a hedge against inflation and economic turmoil

Majority of the time but this is what happens when the major markets are crashing. Traders will get margin calls as they are in world of pain and what they do is close their strongest positions to meet those Margin calls. Hence you get selling of gold. 

Edited April 4 by Fernando

[Fulham Broadway 17,366]

1 hour ago, Fernando said:

Majority of the time but this is what happens when the major markets are crashing. Traders will get margin calls as they are in world of pain and what they do is close their strongest positions to meet those Margin calls. Hence you get selling of gold. 

Always know when a recession is coming - all the London and provincial pawnbrokers dust off their signs 'We Want Your Gold' 'Best Prices Paid for Your Gold' 

They're doing that now.....

[Vesper 30,305]

U.S. stock market has wiped out $9.6 trillion since Inauguration Day

https://www.marketwatch.com/livecoverage/stock-market-today-dow-s-p-and-nasdaq-set-for-further-losses-after-1-679-point-blue-chip-tumble/card/u-s-stock-market-has-lost-9-6-trillion-in-value-since-inauguration-day-6NL1f3p5I5eUhbOGt2Wy

U.S. stocks have had a rough go of it since President Donald Trump was sworn into office for his second term in January.

Since Jan. 17, the Friday before Inauguration Day, the U.S. stock market has seen $9.6 trillion in value erased, according to data from FactSet and Dow Jones Market Data. Of those losses, $5 trillion has been erased just over the past two days -- the largest two-day loss on record.

Major equity indexes were seeing their losses deepen in early trading on Friday. The Dow was down by more than 1,200 points in recent trading, bringing its losses since the market opened on Thursday to nearly 3,000 points.

The S&P 500 was down by 3.6%, while the Nasdaq Composite was off by 3.8%, leaving it on the cusp of bear-market territory. The Russell 2000 has fallen by another 4.1% since it became the first major U.S. equity index to enter bear-market territory on Thursday.

[Fulham Broadway 17,366]

Just now, Vesper said:

U.S. stock market has wiped out $9.6 trillion since Inauguration Day

https://www.marketwatch.com/livecoverage/stock-market-today-dow-s-p-and-nasdaq-set-for-further-losses-after-1-679-point-blue-chip-tumble/card/u-s-stock-market-has-lost-9-6-trillion-in-value-since-inauguration-day-6NL1f3p5I5eUhbOGt2Wy

U.S. stocks have had a rough go of it since President Donald Trump was sworn into office for his second term in January.

Since Jan. 17, the Friday before Inauguration Day, the U.S. stock market has seen $9.6 trillion in value erased, according to data from FactSet and Dow Jones Market Data. Of those losses, $5 trillion has been erased just over the past two days -- the largest two-day loss on record.

Major equity indexes were seeing their losses deepen in early trading on Friday. The Dow was down by more than 1,200 points in recent trading, bringing its losses since the market opened on Thursday to nearly 3,000 points.

The S&P 500 was down by 3.6%, while the Nasdaq Composite was off by 3.8%, leaving it on the cusp of bear-market territory. The Russell 2000 has fallen by another 4.1% since it became the first major U.S. equity index to enter bear-market territory on Thursday.

Making America Gash Again 😅

[Vesper 30,305]

Trump’s Tariff Gamble: Global Chaos or Calculated Concessions?

Paul Mason 4th April 2025

A looming trade war and security threats leave European leaders scrambling to decipher the American president’s true intentions.

https://www.socialeurope.eu/trumps-tariff-gamble-global-chaos-or-calculated-concessions

 

There are two strategic implications that can be drawn from Donald Trump’s decision to declare a tariff war on the rest of the world. One is that he intends to restructure the entire global economy around US interests, destroying the export models of numerous emerging and global south economies and plunging the world into a recession. A second implication is that, under threat of the above, he merely hopes to extract concessions on the domestic economic policies of rival countries that are favourable to the USA and the dollar, but non-catastrophic for the rest.

In geopolitics, we’ve already faced the same kind of dilemma. After Trump sent Pete Hegseth and JD Vance to blow up the Rammstein Group and then the Munich Security Conference, in February, European security chiefs asked themselves: does Trump mean to walk away from collective security altogether? Or is this a ploy to force us to spend more money on defence, take on more of the burden of European security, and support for Ukraine? The fact that, in the parallel worlds of defence and trade, policymakers are facing the same cognitive challenge tells us something significant about the Trump administration. It has decided to achieve things through uncertainty.

Over the past six weeks, I have asked every policymaker I meet who has access to intelligence: do you know what Trump’s endgame is? Most have confessed ignorance. Some speculate that, when it comes to defence, Washington is factionally divided between a group that only wants to reorient toward confronting China and another that – in order to do so – is willing to make a strategic deal with Russia, carving Europe out of the peace talks over Ukraine, out of access to the Arctic, and allowing Putin to menace his next targets in the Baltic, the high North, or the Black Sea.

Even in macroeconomics, a harder science than geopolitics, I have analyst notes on my desk saying there’s a good chance that the tariffs are gestural and may be withdrawn, with all the soaraway consequences for stock markets that would presage. Since Trump came back to power, my watchword with the MAGA crowd has been: focus on what they do, not what they say. Their outpourings of invective, insult, and disinformation are – as far as modern statecraft is concerned – a distraction technique, nothing more.

But we do now have a consistent and observable pattern of action: the Trump administration is prepared to take actions that destabilise their allies, both economically and in security terms, and to use uncertainty and disinformation as weapons to achieve this end.
In response, there is one rational course of action for European liberals, Greens, and social democrats: prepare for American autarky and isolationism and pursue European greatness. It would be irresponsible to do anything less.

The EU, together with the CPTPP countries, South Korea, and Norway, represent 35 percent of global import demand, while America accounts for 15 percent. These countries also wield immense fiscal firepower and institutional strength. But we face a challenge. Whatever first-order measures we take – which could be retaliatory tariffs, industrial strategies that re-shore production, or, in the defence sphere, seeking technological sovereignty – it is the second-order effects of Trump’s actions, our reaction, and the reaction of China that will ultimately shape the mid-21st century.

In 1930, for example, when the Smoot-Hawley Act raised US tariff barriers against the world, neither Britain nor France retaliated. The UK was determined to remain the last free trade power standing. But as its exports to America collapsed by a third in the space of a year and its balance of payments went negative, the Labour government of Ramsay MacDonald was forced into an austerity programme which led to a naval mutiny, a back-bench rebellion, and summary collapse. The National Government that replaced Labour was forced to abandon both the Gold Standard and free trade because the second-order effects of Smoot-Hawley – the surge of cheap imports into the unprotected British economy – were unstoppable.

So the facts have changed, and, as John Maynard Keynes put it, we must change our minds. Social democrats in Europe are looking at the combined prospect of having to rearm rapidly and doing so in conditions of rapidly restructured global supply chains. As we address these tasks, it is vital that Europeans do so proactively, asking – as Keynes’ generation did during the Second World War – what does the world look like when we win? The most fatal stance we could adopt is that of the passive victim, mourning the death of the rules-based order, while reacting to other countries’ agency but never using our own.

“Winning” can no longer mean defending the status quo. It means imagining a new status quo to be attained once the Trump experiment has crashed and burned. It means assembling a coalition of countries whose voters still want to live in a world governed by international law and universal concepts of right and justice. And it means an appeal to the working people of the world – whose factories in countries like Cambodia, Sri Lanka, and Nicaragua may soon be shuttered – to join us in a new project of free and fair trade, human rights, and labour rights. The global working class is bigger than it has ever been, and its industrial heartlands will now become landscapes of class struggle at an intensity not seen in the era of globalisation.

What Trump has done since taking power – both on the security agenda and on trade – is an expression of pure national self-interest: blowing up the game because America was losing. From now on, European liberalism, centrist conservatism, and social democracy should converge on a project not just to defend their welfare states, the Single Market, and collective security. They should seek the widest cooperation from like-minded democratic countries to extend and solidify their open and progressive systems across continents and oceans.

Europe does not have to be a rule taker from Trump, whether on digital services, abortion rights, hate speech, or chlorinated chicken. And if it chooses to continue making its own rules according to the liberal internationalist values it was founded on, the European Union will need to make the UK an offer it cannot refuse. Sure, there are billionaire-backed pro-Trump media outlets trying to set the UK’s agenda; and there is Musk and X.com; and relentless Russian hybrid operations in British civil society. But none of that is strong enough to force the UK into an act of strategic self-harm – which is what aligning with Trump would constitute. I don’t think even the Conservative Party, which is now full of MAGA fanboys and girls, could stomach seeing the UK become Trump’s economic colony.

Europe has the muscle memory of state direction and, in the Nordic countries, active expertise in state-led industrial strategies. It has strong national and pan-national institutions. It has, above all, a population whose majority is for now resistant to ethno-nationalism and prepared to see the continental project as the greater good. Thus, both on trade and security, it falls to Europe to reorganise the world around its own strategic self-interest, and for the UK to become part of the project, not part of the problem.

I think we will see the economic impacts of Trump’s tariffs happen fast. The financial impacts – as in 2008 – will only be predictable when we see how much risk has been hidden within the global shadow banking system and how exposed it is to trade. What nobody has properly focused on, however, is the class struggles that could ensue. Behind every prediction of a slump in US imports is a factory in Bangladesh, Sri Lanka, Honduras, or even China that is going to close. And in an information economy, it is unthinkable that the trade war will fail to spill over into the world of brands, social media platforms, intellectual property, and free speech laws.

If Trump really did just press the demolition button on globalisation, then the positive-sum game the world has been playing is over. That means, in the short term, adapting social democracy to a zero-sum world. To create a new positive-sum game between the consumers of Europe and the producers of the global south requires this generation of centre-left politicians to do something they weren’t trained for: to fight and win a systemic conflict – first against Russia in Ukraine, second against America over tariffs, and third against the CCP over democracy.

Absolute clarity in the selection of these goals is what I want to see from those in power in Europe.

This is a joint column with IPS Journal