Sunday, March 04, 2018

An Orange Idiot

For awhile, it looked like Donald Trump was going to declare war on North Korea. Now it's beginning to look like he's declaring war on . . . the world. Paul Krugman writes:

We’ve known all along that Donald Trump is belligerently ignorant about economics (and many other things). But up to this point that hasn’t mattered much. He took office amid a sustained recovery that began under his predecessor, and that recovery had already lifted the U.S. economy to the point where “normal” policy rules apply: interest rates are above zero, monetary policy is effective again, so short-term economic management is in the fairly reliable hands of the Federal Reserve, not the chaotic Trump White House. What the president didn’t know couldn’t hurt us.

It's now abundantly clear that his ignorance could hurt all of us. He simply doesn't understand trade:

Trump has always had a thing about trade, which he sees the way he sees everything: as a test of power and masculinity. It’s all about who sells more: if we run a trade surplus we win, if we run a trade deficit, we lose.
This is, of course, nonsense. Trade isn’t a zero-sum game: it raises the productivity and wealth of the world economy. To take a not at all random example, it makes a lot of sense to produce aluminum, a process that uses vast amounts of electricity, in countries like Canada, which have abundant hydropower. So the U.S. gains from importing Canadian aluminum, whether or not we run a trade deficit with Canada. (As it happens, we don’t, but that’s pretty much beside the point.)

He has no idea how closely integrated the world economy has become:

We live in an era of global supply chains: just about everything produced in America (and everywhere else) uses inputs produced in other countries. Your new car may well have a chassis assembled in the U.S., an engine and wiring system made in Mexico, electronics from Korea and China, and, of course, steel and aluminum from Canada.

So, when he raises tariffs on products from other countries, he sets off a tit for tat cycle:

So we can’t “win” a trade war. What we can do is start a cycle of tit-for-tat, and when it comes to trade, America — which accounts for 9 percent of world exports and 14 percent of world imports — is by no means a dominant superpower.
A cycle of retaliation would shrink overall world trade, making the world as a whole, America very much included, poorer. Perhaps even more important in the near term, it would be highly disruptive.

Put simply, Krugman writes, Trump's actions are "surpassingly stupid." With each passing day, it becomes clearer that the president of the United States is an Orange Idiot.

Image: TRUMP


The Mound of Sound said...

This reminds us that Trump is a grifter. His fortune, whatever that may be, is built on guile and avarice, not intelligence and vision. His great business ventures failed, one by one, but in a manner that shifted the losses to contractors, workers, investors but not Trump who made sure the cash was in the trunk when he fled the scene. 'The Art of the Deal' should have been titled 'How to Fleece Those Foolish Enough to Trust You.'

When it comes to almost anything complex and nuanced Trump is a simpleton. He's not naive as much as willfully ignorant. And that is the malignant part of his narcissism. When his decisions falter he relies on a powerful instinct to blame others.

Someday I hope someone will explain how Americans chose to go from either years of drama-free, scandal-free, and sober governance to Sideshow Alibaba and his 40 thieves.

Owen Gray said...

From No Drama Obama To Know Nothing Trump has been quite a journey, Mound. Explaining the trip will take some effort.

Lorne said...

Add to that, Owen, the fact that Trump has this view of the United States as 'the greatest country in the world," and you have the arrogant assumption, I think, that no one would dare cross them in a trade war. As the twit said in a recent Tweet, "trade wars are good and easy to win."

Such manifest ignorance is maybe not that hard to fathom in the current incarnation of the Benighted States of America.

Owen Gray said...

Trump is the latest incarnation of The Ugly American, Lorne. There is a long history of this kind of behaviour in the United States.

The Mound of Sound said...

I have wondered if Trump could be the president to push the world into a new reserve currency regime. A basket of major currencies in stead of the US greenback, a fitting end to Breton Woods. It would likely require at least Europe and China to rewrite the currency rules, something of a de facto coup de main. America with its obsessive "everyday low taxes" mentality is going to rely on massive foreign borrowings to keep going and that's a long range need. Imagine being told they'll have to borrow in a "basket" currency that includes the yuan, the Euro and the yen alongside the USD. That would detach world trade and finance from Washington's monetary policy, a powerful and misused advantage that has been exploited to manipulate America's debt to others. The drawback is the inability to gauge how badly that would destabilize the American economy and, through it, the state itself.

Owen Gray said...

I suspect the messsage Trump is sending is that the United States is now unreliable, Mound. He presonifies that message. Lots of countries will seek to put distance between themselves and a country whose whims are as mercurial as its president.

the salamander said...

.. at what point does the world truly begin to see or recognize Donald Trump as an abberation? Kind of a fluky crude dangerous & venemous version of Chauncy Gardener in Being There..

Then we get he and his progeny pontificating to the world.. or as trophy hunting Ernest Hemingway wannabes.. or shoe designers to worldly women.. or former fashion model sex worker granted green card for Olymian prowess.. in just what? Mathematics? A son in law will save the middle east.. or Palestine or his father's real estate empire..

Its gone beyond laughable.. into farcicle.. to deplorable.. to insanity.. what next? Meanwhile we have American senators musing along with Trumpo et al on how a nuclear strike on North Korea 'could be good in the long run' - never mind that the prevailing winds of North Korea flip towards Russia or China depending on the season. Do we really think Russia or China are good with seasonal nuclear irradiation of people, crops, land, water or livestock? Where do they find these American lunatics? In daycare centers?

Trump is the twitter king.. venting speculating commenting hallucinating from country clubs or golf carts.. Air Force One.. or the inferno of The White House.. Congress and Senate are like fleas and ticks riding him for all their worth... and trying to increase their net worth.. meanwhile the rats are leaping from the Trump plague ship in droves or being picked off by Robert Mueller and his special councel forces, one by one.

Who shall be the next? Jerod Kushner? Ivanka? Or the twin dolts Eric The Slower and especially Donald jr The Loud.. Its a race to Infamy & the bottom of the swamp.. Mueller will move at dawn on a Monday.. another precision strike & letting mainstream media feed on the foibles of the fools.. It will not be pretty. One is left wondering if April 21 will be Dolt Day for Donald et al

Owen Gray said...

I'm not sure of the date, sal. But I'm sure a reckoning is coming.

the salamander said...

.. April 21 will will follow April 20
the day high school students walk out
protesting guns & school shootings..

What comes from the lips of the orange buffoon
will be fuel for the fire ..
Mueller has the match ..

It will not be pretty..
it will not be winning..

Owen Gray said...

You're absolutely right, sal. It will not be pretty. The Trump Saga will not end well.

Unknown said...

I am an average American,and I voted Republican the last go-round, Democrat straight ticket next time !!!

Owen Gray said...

If more Americans agree with you, Unknown, Trump will be a onee term president.