The Spinning Heads

Sick of winning yet? This week there has been quite a few articles about the tariff war we’re heading towards. I am no economist but my understanding of history in regards to protectionist trade wars is that such wars hurt the economy. We suffered such protectionist trade wars during the ‘30s which might have prolonged the Great Depression and maybe have given Hitler the impetus to power. Most economists, if not all of them, agree that this trade war that Trump is starting will harm American businesses and consumers. Even some internal government staff did some research that alluded to the harm such wars will incur; and still, the Trump administration doubles down on the tariffs and the belligerent talk.

Farmers out in the Midwest have recently acknowledged that these trade wars will harm their business and they are starting to see the impact. Other businesses, again in the Midwest, are saying the same thing. And still, and still, these voters support him, even while they are seeing price increases.

And these are trade wars with our allies, such as Mexico, Canada and Europe, never mind out enemies. And now our allies are hitting back with their own tariffs, but these are more strategic tariffs, rather than blanket knee jerk reactions. If I read between the lines, it is almost as if they are hitting back at the Midwest specifically…maybe in the hopes of convincing them to stop supporting Trump. Maybe to get the Trump supporters to howl and get Trump to back off. Even this article seem to be alluding to this strategic selection but it never really says so outright, so I may be misreading the lines.

On top of these tariff wars, we have business executives declaring that pay raises will not be coming, even though businesses received generous tax cuts and have given their shareholders generous payouts ($20 billion dollars anyone?) and wait… there’s more… layoffs will be coming. Those who will be receiving pay raises will be those in the technical fields initially but those will be laid off too as businesses get more automated. The rest of the non-technical folks will just have to upgrade their skills and apply them in a new industry (until such time where everything will be automated.)

This kind of thinking (automating everything instead of spreading the benefits all around) illustrates a special kind of stupidity where there is neither empathy nor wisdom. The chief executives may be book smart but they are really stupid in the big picture and how the market environment is interconnected. Poor or no customers means a failing business.

And yet, the Trump supporters are digging down deep in their support of Trump. I don’t understand this. Do they hate so much that they are willing to hurt themselves? This tribalism is inducing a kind of stupidity of the crowd where reason and facts be damned. They are going to be loyal to their tribal leader, no matter what, even if it kills them.

And it may well come to that: their loyal may kill them.

So, are you happy with all of that winning?