The Orange Tyrant’s capricious on-and-off tariffs are of interest not for their value as economic policy, as it is childishly simple to show, as many have done, that their result is short-term inflation and long-term harm to production. The legal questions raised, such as whether a president can use patently bad-faith national security rationales to impose tariffs under existing law, or whether and to what extent Congress can delegate to the executive branch its core constitutional power of taxation, are of considerable interest, but we may save those for another time. Of all the unprincipled acts of our unprincipled executive, tariffs are of most interest because they are the closest thing the Orange Tyrant has to a policy belief, one he has held for decades, and one that he continues to hold even in the face of negative economic effects and declines in popularity. The sincerity of this conviction, though it speaks of profound economic ignorance, more forcefully conveys the character of the grievance-laden worldview that motivates it and the gangster practices invoked to remedy these grievances.
While the identity of the culprits of have changed over the years, from Japan in the eighties to China and Europe today, the egomaniac has consistently portrayed international trade as a zero-sum game where other nations “rip us off” and sell their products to the U.S. on more favorable terms than the U.S. sells to them. It is left unclear who is the “us” being ripped off: U.S. businesses, the U.S. government, the U.S. consumer, or the U.S. worker. Spelling that out would require articulating a clear understanding of macroeconomics. The egomaniac functions on a more visceral level, identifying his personal likes and dislikes with the interests of “us” the nation.
As he ran his private businesses, the egomanic disliked having to pay for anything, and often took advantage of the weakness of small vendors to force them to accept reduced or no payment. Cooperation with outside entities was a foreign concept. There are only winners and losers. Apply this to foreign trade, and we find the strange notion that kindly Canada is ripping us off by having a trade deficit. This is mainly due to energy purchases from Canada, and somehow it is unfair that we should have to pay for the energy we purchase. The next logical step from that is the “51st state” annexation nonsense, as if that would somehow abolish the cost of energy. Trade deficits were a problem in the mercantilist age, when the supply of currency was limited by gold reserves. In the age of fiat currency (or even the 1930s-1960s era fractionally gold-backed currencies), that is no longer an issue, since each nation has means of increasing its money supply in proportion to national production.
If anything, free trade is unfair in favor of the U.S., since it has a much larger market and is in less need of protectionism, and the dollar is the world’s reserve currency, enabling the U.S. to increase its money supply by a much greater margin without causing as much inflation, since there is a global market for dollar buyers. Blinded by his ignorance and sense of grievance, the Orange Tyrant is sabotaging a game the Americans are built to win.
We can find other examples of economic illiteracy, such as the notion that U.S. export products should not have VAT applied (even though it is applied to all other products, including the domestic products of the receiving country). Exhaustively pointing these out would miss the big picture, namely that economics is not what is at stake here, for the Orange Tyrant has no understanding of macroeconomics at all. We see this in the destructive cost-cutting measures he applies to the federal government, as if this were analogous to a household economy or private business. Again, in his private business he would have “cheap attacks” (see Cohen, Disloyal, pp. 154-163, where he bought cheap paint against the vendor’s suggestion and then blamed the vendor) to reduce cost by sacrificing quality. He does not comprehend that “efficiency” means doing more with less, not less with less. Much less does he care that his first term tax cuts were among the biggest drivers of deficit expansion this past decade. This hypocrisy is not unique to the Orange One, for Republicans have long driven up deficits with tax cuts for the rich, only to later develop a “conscience” about the debt and make noble sacrifices of programs that help the less fortunate.
As with the tariffs, we must go back to pre-Keynesian notions, in this case that thrift is a virtue for the national government. On the contrary, deficit spending with bond issuance is a means of increasing the money supply and stimulating growth, with a particularly profitable multiplier effect when spending is related to productivity, as in the funding of scientific research, or adding spending power to the working class, as with various social programs. As long as the growth in money supply is kept proportionate to productivity, i.e., debt is manageable as a percentage of GDP, then deficit spending is not only tolerable but beneficial.
The dumb cuts made to programmatic spending and personnel, without regard for actual productivity of these persons and programs, are economically harmful. We have seen that DOGE assesses “waste” simply in terms of programs they do not like, for political or ideological reasons. In some cases, such as the cutting of foreign aid and biomedical research, they are hopelessly short-sighted. The draconian measures are made necessary by an a priori commitment to cut spending by a predetermined amount, say $1T or $2T per year, in order to finance tax cuts for the rich. Their “fiscal responsibility” has them be generous toward the wealthy and frugal toward the poor, even to the point of making false accusations of waste and fraud in the programs that sustain them at much lower cost per person than the proposed tax cuts that chiefly benefit a few. Again, this is motivated by an economically illiterate view of the national budget as a household budget that must be balanced, without regard for the monetary policy role of government. It is made especially perverse by identifying the national interest with personal interest, namely of the billionare class that has the Tyrant’s ear. It should be obvious that thrift is an insincerely held virtue; the banks in 1990 imposed a humiliating constraint on his extravagant spending to a mere $450K per month in exchange for bankruptcy-avoiding loans. He subsequently claimed losses in 1995 that would exempt him from income tax for 18 years, even though he only paid half the debt.
In both the tariffs and the thrift measures, the Orange Tyrant enjoys the exercise of arbitrary power. He can bring large institutions and constituencies to heel by the mere threat of exercising such power, and extract concessions from them in exchange for exceptions to his tariffs or budget cuts. The love of power and its exercise may take precedence even over the ostensible motivations of grievance and thrift. The grievances, after all, are often directed at those who have slighted him or opposed his rise to power, while the desire for thrift often disguises a desire to punish ideological opponents, such as academia, NGOs, and the media.
It would be a mistake to search for a master plan behind any of this. The ever-shifting targets are reflections of an unfocused, impulsive, reptilian mind. There is no deeper personality to be found. Hurt whatever has hurt you. Strike quickly. Threaten the weak. Make them beg. These visceral impulses have led the egomaniac throughout his business career. The so-called “deals” he makes are not the result of negotiation, at which he is hopelessly inept, due to his unwillingness to learn about anything, but are simple acts of extortion. We see this in all of his so-called foreign policy dealings, which is why he sides with the stronger party (Israel, Russia) against the weaker (Gaza, Ukraine), since only the latter can be extorted. This is also why he attacks long-time allies, but only those he perceives as weak. Gangsters don’t believe they should have to pay full price for anything. The desire for power, not thrift, is the prime motive.