A lot of electrons (and ink) have been spilled over whether we are being led by a brilliant businessman playing three dimensional chess or a complete ignoramus who played the role of a businessman on network television. His campaign speeches, for which he lauds his performance as “The Weave”, captivate his most ardent followers and drive away (or are simply ignored by) most others. The majority of us experience the Trump performance only after filtering and “sane-washing” by administration spokespeople and the media. That, I think, is a mistake. On some points, experiencing his performance without a filter is enlightening.
For example, as Mr. Trump’s capricious and shifting tariffs roil both global markets and global trust it is worth actually watching and listening to him justify his endgame in the hope of understanding why our lives are being turned upside down. On April 7 Heather Cox Richardson quoted the Trumpian chatter in the Oval Office on the occasion of a visit by Bibi Netanyahu. I recommend watching Trump in this YouTube video of the meeting, starting at about 32:00. Be sure to observe the expressionless faces of the listeners. No nods of agreement and no furrowed brows, no expressions at all. Most of the listeners understand that what Trump is saying is inane drivel, but, each for their own reasons, no one dares to let their face express their thoughts. Listen and watch.
From HCR’s transcript and comments:
Today [Monday, April 7], in a press conference convened in the Oval Office, Trump explained his thinking behind why he has begun a global tariff war. "You know, our country was the strongest, believe it or not, from 1870 to 1913. You know why? It was all tariff based. We had no income tax,” he said. “Then in 1913, some genius came up with the idea of let’s charge the people of our country, not foreign countries that are ripping off our country, and the country was never, relatively, was never that kind of wealth. We had so much wealth we didn’t know what to do with our money. We had meetings, we had committees, and these committees worked tirelessly to study one subject: we have so much money, what are going to do with it, who are we going to give it to? And I hope we’re going to be in that position again.”
Aside from this complete misreading of American history—Civil War income taxes lasted until 1875, for example, tariffs are paid by consumers, the Panics of 1873 and 1893 devastated the economy, few Americans at the time thought the Gilded Age was a golden age, and I have no clue what he’s referring to with the talk about committees—Trump’s larger motivation is clear: he wants to get rid of income taxes.
This is the historical reference of a man who is now roiling the world. It should come as no surprise that he despises the income tax (especially an income tax levied progressively, i.e. with higher tax rates for earnings that exceed certain threshold amounts). Despising progressive taxation has been a Republican plank for decades, but tariffs as a riches-producing alternative to income tax? That’s pure Trumpian inanity. Somewhere he picked up the idea that the tariff regime of 1870-1913 produced a country that was dramatically richer than the U.S.A. of today. The professors at the Wharton School who attempted to teach history and economics to this man child must be rolling in their graves.
Economically, 1870-1913 was the period in which the second phase of the industrial revolution combined with America’s westward expansion (as well as imperial expansion, think Spanish American War). Railroads were built to span the continent, mines opened, vast tracts of virgin timber harvested, and the Great Plains converted to farm land. All this expansion fueled the accumulation of wealth in the hands of a few unfettered industrialists, skilled manipulators of capital, people Donald Trump would love to emulate. The keys to this era were the combination of technological and spacial expansion and access to capital. At the time the U.S. was a relative financial backwater. Great Britain was the ascendant foreign power and the holder of that era’s reserve currency, the British pound. Investment in the expanding U.S. must have looked like a safe and lucrative bet. The idea that high tariffs were the singular thing that spurred all the growth of the period between 1870 and 1913—and that the income tax amendment to the U.S. Constitution in 1913 brought all that to an end is a product of arrogant ignorance.
Tariffs are ultimately paid by the consumers in the country receiving the goods, not the country shipping the goods, regardless Trump’s frequently voiced claim to the contrary. Trump’s assertion is so patently wrong that it is tempting to imagine that deep down inside he knows better and is slyly promoting his tariff lie to gaslight economists and fool his base. Based on his words in the Oval Office video linked above (and the similar speech referenced in the P.S. below) it is more likely that Trump is so profoundly ignorant of history and economics that he actually believes what he says.
Finally, let’s take a look at 1870-1913 in a broader context than the imagined financial magic of “being a tariff country”. In that period women were still relegated to second-class citizen status without the right to vote (until passage of the 19th Amendment in 1920). Former slaves were disenfranchised and effectively re-enslaved under Jim Crow. U.S. Senators were selected by often corrupt state legislatures rather than the popular vote (until passage of the 17th Amendment in 1913). In spite of the “second industrial revolution” fewer than half of Americans of this era lived in cities. The conditions under which industrial workers, miners, and children toiled, many of them exploited immigrants seeking perceived opportunity, were often appalling.
For Donald Trump to idealize the period 1870-1913 as an era of tariff-generated wealth is a striking display of historical and economic ignorance, all the more so for a man who claims the mantle of “leader of the free world”. Donald Trump is definitely not playing three dimension chess; instead, he is playing cards without a full deck. At least some of his sycophants know that cards are missing, but they do not dare tell him. Any other president would, by now, have been impeached and convicted.
Use 5Calls.org to lodge your opinion with the people who are supposed to represent you in the U.S. Congress.
Keep to the high ground,
Jerry
P.S. A few parallel opinions gathered in the New Republic:
Tahra Jirari, director of economic analysis at the Chamber of Progress, wrote on X Sunday that “a trade deficit isn’t a ‘loss,’ it just means we import more than we export. Countries run trade deficits for all kinds of healthy reasons (like strong consumer demand). ‘Breaking even’ isn’t how global trade works.”
Zeteo News’s editor in chief Mehdi Hasan wrote on X Sunday that Trump was “an ignoramus the like of which we have not seen in our lifetimes. Wharton must be so embarrassed.”
Jonah Goldberg, editor in chief of The Dispatch, wrote in a post on X Monday that “Trumpers slavishly defend one man unilaterally screwing up the economy and the America-led global order because he’s some kind of genius. And it turns out—as was apparent for decades—he just doesn’t know what he’s talking about.”
From Le Monde, April 10th:
Financial markets, foreign governments, business leaders and the press have understood nothing about what is unfolding before their eyes. Trump's grand strokes disrupt the world's order so profoundly that, ultimately, only his close circle is able to grasp the ins and outs and appreciate its full significance. Unfortunately, just listening and observing the behavior in the Oval Office is sufficient to understand that the script was written by ideologues ill-prepared for the exercise of power, plunging the world into an abyss of caution.
The justification for the reversal on tariffs is dizzying: "I was watching the bond market," Trump explained. "The bond market is very tricky. I was watching it. But if you look at it now, it's beautiful." Like a child fascinated by his own mischief, Trump tries to convince his country that he is working for the common good by instantly repairing the damage he has himself just caused.
P.P.S. Here is the transcript of Trump’s earlier and similar comments on tariffs from the Oval Office [the bold is mine]:
You see the power of the tariff. I mean, the tariff is good, and nobody can compete with us because we have by far the biggest piggy bank. And so that will take place very quickly. But also we'll be doing pharmaceuticals to bring our industry back. We want to bring pharmaceuticals back to the country.
And the way you bring it back to the country is by Putting up a wall, and the wall was a tariff wall. We were the richest country in the world. We were at our richest from 1870 to 1913. That's when we had, we were a tariff country.
Video (click here to watch on YouTube), and note that this appeared on Fox News on January 30 or February 1: