As the Trump administration ramps up its efforts to sabotage climate action, we have to think about what that means. There is only one atmosphere, and the consequences of climate change are becoming ever more obvious. Our policies are not just putting the US at risk, we’re putting everyone at risk.
So it is only a matter of time before the rest of the world will have to react. The US has become not just a rogue state but a criminally insane one. The only reasonable action is a global embargo. The US has to be treated as a matter for quarantine.
Fortunately for the rest of the world, Trump is providing an excellent transitional strategy. As exports to the US become subject to draconian and unpredictable risks, the world has a chance to live without us. The supposed lifeline we’re throwing to the rest of the world is actually worthless—building factories in the US just increases the exposure to Trump’s whims, and further the fossil-fuel-privileged industries of the US (e.g. cars) will have little future elsewhere.
There is a remarkable consistency in US policy—we are doing everything we can to turn ourselves from a world power into an afterthought. That’s not just the tariffs, it’s the attacks on education, healthcare, and forward-looking research. The demonizing of all immigrants. It’s amazing what dreams of past imperial greatness can do.
Maybe it’s in part an Anglo-Saxon thing. The parallels with Britain are close, although our fall is much greater. Brexit was Britain’s effort to restore its nineteenth century dominance by withdrawing from cooperation with the EU. The result was an instantaneous economic downturn that took about five years for the population to understand. There may well be no way back—with more Farage populism in the offing, the downward spiral could continue.
We voted for Trump to bring back the glories of the post-war fifties. He has promised to make everyone rich by shaking down the rest of the world. With tariffs, we are in essence doing our own Brexit with everyone else. Whatever the evangelicals may believe, there is no God protecting us from folly.
In case you haven’t noticed we just declared war on our independent neighbor Canada. We haven’t sent an army yet, but that’s only because we think we can win with financial weapons. But there’s no mistaking it—it’s war. And our declaration of war was beyond ludicrous—for few immigrants, just about no fentanyl, and a balance of payments deficit that has nothing to do with protectionism. The real reason is no better—a vanity project so that Trump can say he personally added the extra territory to the USA.
That’s pretty bad, but it is certainly not the worst of the lying going on. For that, you can point to all the talk about getting rich. We’re constantly told that everything going on, no matter how painful or immoral is about getting rich. But no one has any intention of creating a world where the population gets rich. This is government of, by, and for big corporations.
There is no linkage between all the firings and the well-being of the population—the money being saved is to justify the tax cuts for rich people and Wall Street. The tariffs are a sales tax paid by buyers—a regressive tax. The deportations will raise prices even on basic foodstuffs and essential services such as elder care. Finally and most importantly, as even Adam Smith understood and the entire nineteenth century demonstrated, the big corporations are not going to shower golden paychecks.
If you want to understand what’s in store for the population just look at what uncontrolled free enterprise did in the nineteenth century. The picture was very much like the story Trump tells—the European powers dominated their colonies and brought all the profits home. Industrialists made fortunes, controlled government, and kept the work force desperate. Uncontrolled capitalism is good at making money for itself full stop. Most people are in no position to bargain.
There is no miracle world of uncontrolled free enterprise—the only people who preach that religion are handsomely paid to do so. Governments can do bad things too, but without the countervailing power of government there is no one to speak for the well-being of the population. Just look at some problems facing us today:
– AI (with robotics) is already becoming a hit on employment. Musk’s savaging of government jobs is actually a foretaste of what to expect throughout the private sector. Someone will have to help.
– Climate change is real—whether Trump likes it or not—and there will be major changes to be managed if the population is to be kept whole.
– Education and healthcare are necessary for personal financial success and stability. The private sector is not going to fund it. Punting it to the states is something business interests do to avoid paying for it. Musk goes a step beyond that—preferentially hiring H1B slaves whose education was paid-for by someone else, and who can’t quit or change jobs.
– The technological environment is changing faster and faster. No one predicted just how far generative AI would be able to go. Unless we are prepared to spend real money on pure research we will be left behind. That means not only missed opportunities in the economy but these days also military weakness. Regardless of what politicians may say—the private sector does not do basic research.
Trump’s golden world does none of these things. It’s not good for the vast majority of people. Except in the very near term it’s not even good for the billionaires.
In business I’ve been to plenty of meetings where someone proposes a new idea—different and exciting, thinking outside the box. Frequently what makes it new, different, and exciting turns out to be that it’s wildly unethical—kind of like invading Canada. Wildly unethical may be different, but that does not mean good. In fact most of the time it’s terrible. And with Trump that’s what we’ve got.
It seems to be taken for granted that everyone knows the objective of government: it exists for the good of the country. However it’s not obvious what the “good of the country” means, and that ambiguity leaves plenty of room for confusion. There are two models.
Model number one is more or less derived from the family. The good of the family is the well-being of its members. Government exits for the well-being of the population. Reasonable enough.
Model number two is a business. The goal of a business is returns to its investors. The employees are a cost center, and every dollar earned by the workforce is a dollar lost to investors. The population is at best a necessary evil, with fewer and fewer really required for business operations and with available slave substitutes (who can’t quit or change jobs) as Musk’s beloved H1B’s.
We are currently seeing model two in full operation. Everything has to be sacrificed to the 4.5 trillion dollar tax cut for rich people and businesses. Despite all the rhetoric about a golden era, all the money from the cuts and firings ends there. It’s golden for the people with the gold.
And that’s not the end of the story. As even Adam Smith understood perfectly, the private sector is actually not good at providing for its own success. Left to its own devices it rutherlessly sacrifices everything to immediate profit, which leads to longer-term collapse. Think about the cuts to education, research, and climate change. So as far as the two models of government are concerned, we’re running headlong into a worst of both worlds–sacrificing both the population and the economy.
I need to return to Adam Smith’s quote from last time. It’s so accurate it’s incredible. First the quote:
“The proposal of any new law or regulation of commerce which comes from this order [merchants and manufacturers], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.” (Wealth of Nations, Book 1, Chapter 3)
All by itself this stands as rebuttal to the Republican Party’s standard argument: “We’re businessmen, so we’re good for the economy.” It seems businessmen are not so benevolent. Let’s look at the record—Adam Smith could hardly have been more to the point.
I’ll start with Obama’s first term. George W. Bush left a mess so bad that it is only partially acknowledged. The stock market crashed and the economy was shutting down (basically from what amounted to misguided deregulation of the overall banking system through mortgage-backed securities). But that wasn’t the whole story. Hidden behind the smokescreen of “neoliberalism” was the fact that essentially all of the job loss to China occurred either during Bush’s administration or with their crash. Just look:
That’s no accident. The Bush people refused to resist China’s WTO-prohibited trade practices (e.g. currency manipulation), because they were actively promoting off-shoring—since that’s what business wanted (e.g. about 70-80% of Walmart suppliers were in China). In this case it’s tempting to say “deceived and oppressed” was coupled with pure incompetence, but that actually misrepresents a situation that Adam Smith understood perfectly. Both the deregulation and the off-shoring were cases of business getting what it wanted without the necessary “suspicious attention”.
Obama’s job was to get us out of that mess, and he was well-underway when Republican decided that he might succeed. That could not be allowed, since there was an election coming up. So with the fabricated excuse of the “balanced budget amendment” rhetoric they essentially shut down government including all stimulus to the economy. That meant jobs and income for many people. They also blocked any aid to the millions of people who lost jobs from Bush’s off-shoring. “Deceived and oppressed” is right on.
Now we get to Trump. The “balanced budget amendment” rhetoric disappears instantly, and was replaced by a tax cut funded by a 2 trillion dollar deficit. That was going to cure the last part of the recovery they had sabotaged. However the economy was actually in pretty good shape, and as we noted last time the only stimulus that Obama ever got past the Republicans (in his first term) was on the order of $500 billion. This needs to be emphasized. We read articles about governments in Africa where department heads steal millions by handling their budgets as personal slush funds. We in the US don’t do things like that. We’re much more civilized. Using the “balanced budget” ploy the Republican Party took 1.5 trillion dollars of benefits for its owners quite legally from the American people. If you want stumulus you’ve got to pay us first. “Deceived” is the very least you could say.
That money went straight to Wall Street. It inflated corporate profits, so stocks went up. But the companies didn’t spend that money on employees or the business, they used it for stock buybacks—a second kick in the pants for the market. For the people in Adam Smith’s quote all you can say is—what a wonderful world this is!
And they’re ready to do it again. They’ve made up the fiction that inflation is all due to spending money for the benefit of the population. Can’t do that. Bad idea. Have to give it to us, and it will be Nirvana.
The next deficit is estimated at $4T. Republicans have signed-on salivating—Will wonders never cease? (And that’s before the sweetheart deals with individual billionaires!) But that’s not the end of it. Trump’s new set of proposals (tariffs, deportations, tax cuts) is wildy inflationary, potential as damaging as what trashed the economy under George W. Bush—again what you get without “suspicious attention”. (It may be a side issue, but we even have a potential repeat of Bush’s banking debacle with all the cryptocurrency money behind Trump.) All of us have to hope it doesn’t happen.
Adam Smith did his job. Can’t say we weren’t warned.
on the outside 