This is mostly right, but it still matters to me that Trump's recent moves have nothing to do with this.Octavious wrote: ↑Wed Apr 09, 2025 3:47 amIt might work, again depending somewhat on how you define work. And yes, all the definitions are a bit fluffy but that's economics and politics for you.
What is largely absent from your analysis is an acknowledgement that the status quo wasn't working either. And not just from a dying rust belt perspective, but from the point of view that a massive trade deficit backed up by massive borrowing is not sustainable. A substantial change was inevitable in the near future regardless of who was in charge, and the standard model is a rather airy fairy idea of doing the same thing better and hoping it's enough. And in fairness historically it has been enough, but the fundamental problems remain and seem to grow.
But instead we have this. I don't think this is good, but that is tempered somewhat in my mind by not thinking what was there before was good. It is entirely possible that there are no good solutions or ways forward.
In short I've been expecting the shit to hit the fan for some time, and what we have from Trump is different shit and a different fan. It's likely going to get messy, but I don't know nearly enough to predict how bad it will be and whether it will be significantly worse than the alternative. I don't think anyone does.
The US has a trade deficit because it borrows more than it saves. That's a fundamental law of economics, literally like gravity, that no one in the Trump admin seems to understand. It's a literal accounting identity that has to be true. The only way the tariffs "fix" this underlying problem is if they decimate the US consumers' buying power so much that people actually save, and if they legitimately cut the federal deficit (which they won't, because DOGE won't touch 80% of spending on entitlements).
The reckoning here could have been good policy. Trump blew up the WTO in his first term by disengaging and failing to appoint appellants — he could have reformed it instead, with the support of basically every other country on earth since basically everyone wanted new rules to restrain China. His admin could actually be doing something about the federal budget — the deficit-financed tax cuts from his first term were a monumental step in the opposite direction. America could help every rust belter directly by actually redistributing the gains from trade with a social safety net like all its allies have, and that would actually work while this trade war won't.
Trump is too often given a pass for "at least he's doing something" in response to huge, real issues. But very often the things he's doing are making that issue worse lol, this trade war is a prime example. He should be castigated for making it worse, not praised for trying something asinine that will foreseeably worsen the problem.
