Somewhere in the universe is a man known as Donald Trump. He has residences in New York, Palm Beach, Florida, and a white columned house at 1600 Pennsylvania Avenue, Washington, D.C. From these well-furnished bungalows, where supplicants meet to greet, monarch butterfly Trump governs his territory ─ planet earth. When the monarch desires a change in scenery and craves another mansion, he sends his henchman to the selected area, has them arrange an offer that cannot be refused, and gives the area the glitz his personality favors. Donald Trump imagines he is everywhere. He does not realize he is nowhere. Donald Trump is a walking manic- depressive, bringing America to international isolation and national depression — economic and public.
Trump professes a smooth and clever operator, a master of the art of the deal, which is a business term for international diplomacy. He is a frenetic wheeler-dealer, which is a business term for gunboat diplomacy. Before Ukraine’s rare earth minerals begged to be mined by U.S. corporations, there was nothing Donald Trump relished from Ukraine President Zelensky; nice to end the war, but the war is not harming the United States. The war is harming Russia, and there is much the United States can gain from Russia, including rare earth minerals, by having Putin believe the U.S. is not siding with the Kremlin, which includes a truce. Trump has done nothing for the United States and all for Putin by siding with the Russian leader. He could have done much for the United States by pretending to side with Zelensky and eschewing his art of the deal for legitimate international diplomacy
Entrance of the rare earth minerals to the discussion is baffling and contradictory. An agreement by Zelensky to having American construction crews drilling close to the Russian border and American industrialists investing in a nation that Putin wanted neutral would end “peace negotiations.” Russian troops would press on to capture the cherished rocks and align so that citizens from a NATO nation do not operate close to its territory. If Trump coveted the materials, why did he antagonize its owner?Doubts exist of the extent of Ukraine’s possession of the minerals within its non-occupied territory, and if it is physically and economically viable to access and use them. What is this all about? Was Trump setting a trap for Zelensky?
Trump’s response to Zelensky’s statement that “a deal to end the war with Russia was very far away and the war may not end soon, “is strange and alarming. Trump said, “He better not be right about that.” This is not advice from a sympathetic soul. Sounds as if America is in the war and he wants Ukraine to surrender. Trump’s overzealous support of Russia will harvest more than a truce. It allows a sterner position and more severe demands from Russia ─ a Russian proposal that requests Odessa, Kharkiv, and Kyiv incorporated into Bear country. Zelensky wants guarantees that his nation will be protected. That makes sense. Once there is a peace treaty, Ukraine territory is lost, never to be regained. What stops a superior Russia from restarting the conflict and seeing more territory? Not complying with Zelensky’s request is not being sincere about an agreeable peace. The militant charge for peace has no relation with the war, with Putin, and with making America great again. Donald Trump is eager to win the Nobel peace prize and scoundrel, Volodymyr Oleksandrovych Zelensky, is preventing it.
International Isolation
War, as an instrument of U.S. foreign policy, is the U.S. preferred method to advance its hegemony ─ economic warfare against those who can contend the U.S., and military warfare against weaker foes. It is welcoming to learn that war will no longer be the vanguard of U.S. foreign policy. Is it true? Will Trump learn that the U.S military-industrial complex only knows war, that it is a permanent feature of the U.S. psyche? Without war, the constituted U.S. is not a global leader.
Europeans won’t readily invite nation executives who do not listen to others and demand everyone listen to them. The inexperience of those who occupy Trump’s cabinet is anathema to the mostly well-groomed European counterparts. The executives and legislators operate at different levels and correspond at no level. Future communications and relations between the disUnited States and semi-unitedEuropean nations will be difficult.
Trump believes he has sympathetic recognition from Putin and Xi. He has that posture toward them; doubtful he has that posture from them. These leaders are professional statespersons. They exercise care in their relations with leaders who behave erratically, are petulant, not diplomatic, have inconsistent policies, and uncertain direction. They want to be sure they understand with whom they are dealing. The Russian and Chinese leaders may pay lip service to Trump, but will act with caution.
Economic depression
Some of the rash moves by Trump and his official “bull in the China shop,” the Musk ox, have merit and national support. America’s president failed to learn how and why we got here from there before he started making here no more. His knowledge of issues is nil and those advising him reinforce his nilness. Decisions from whims and meager knowledge are coin tossing and not careful decisions. His policies date back to the 1920’s and the result will be same as occurred in the 1920’s ─ depression.
Trump adores private debt and abhors government debt.
Government debt is not the problem. A system that exists by debt is the problem. Government deficit is one of several methods to increase the money supply (debt) and create demand. In times of economic stress, government borrowing exhibits advantages.
(1) Government borrows at lower interest rates than consumers and its debt is easily rolled over.
(2) The government can always pay its debt and cannot go bankrupt. Artful debtors (such as Trump), receiving funds from careless creditors, have gone bankrupt and spiraled the economy into declines.
During the seven years between 1924 and 1930, federal government debt slowly decreased from $395B to $304B. Herbert Hoover eschewed debt and coveted balanced budgets. In 1930, the low debt U.S. began its Great Depression.
Trump wants low taxes
Taxes transfer money between the government and the taxpayers; neither method adds or subtracts money in the economy nor allows more or less available spending to the economy; the purchasing power stays the same; the total purchases of goods and services remain the same; and the GDP remains the same.
Lowering taxes assists the already employed, and that is not the major priority. Who pays taxes ─ the employed. Who receives tax breaks ─ those who pay taxes. In effect, lowering taxes redistributes federal assistance from needy persons to the employed. Which is preferable, redistributing income so the employed have more to spend or redistributing the income so the underemployed have something to spend?
Stimulating the economy by tax breaks is a psychological phenomenon. The talk, exaggerations, promises, and general optimism of tax breaks fashion a more optimistic public, which supposedly stimulates spending, investment, and courage to carry more debt. Creeping in to the debate is another assumption ─ those who have excess funds will invest and stimulate growth. Not considered is they invest in speculative ventures that only churn money or they might purchase imports, which decreases purchasing power in the domestic economy.
GDP has steadily grown, with a few bumps, in the last 70 years, and no relation to lowering of taxes is proven. A government report: Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, Thomas L. Hungerford Specialist in Public Finance, September 14, 2012, concludes:
… results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.
Trump‘s economic plans are guided by “achieving increasing concentration of income at the top of the income distribution.”
Tax rates fell from 60 percent for top earners in 1920 to 25 percent in 1924 and slightly lower to 23 percent in 1929. Did the lower taxes help the economy? The Hungerford report indicates otherwise. For sure, the lower taxes did not prevent the Depression and might have contributed to its extension.
Trump craves low interest rates
Optimum interest rates are not arbitrary, they are a calculated tool for the Federal Reserve to delicately regulate the money supply and the economy; lowering rates (increasing money supply) when the economy is heading downward and raising rates (limiting increases in money supply) when the economy is overheated, inflation is rising, and speculation is rampant. Several economists offer a leading factor in the Great Depression as “differences of opinion contributed to the Federal Reserve’s most serious sin of omission: failure to stem the decline in the supply of money. From the fall of 1930 through the winter of 1933, the money supply fell by nearly 30 percent. The declining supply of funds reduced average prices by an equivalent amount. This deflation increased debt burdens; distorted economic decision-making; reduced consumption; increased unemployment; and forced banks, firms, and individuals into bankruptcy.”
Trump wants low interest rates to achieve a short-term gain in the economy and make his record look good; after him, the deluge. He will have speculation, more uncertain private debt, and money leaving the country to seek higher interest rates; all followed by potential economic collapse.
Immigration
The word immigrant irks the pure white American, Donald Trump. A highly industrialized nation with upward mobility requires an increasing work force and consuming population to grow. When encountering a low population growth, immigration is the avenue for revitalizing the economy. Arguing past immigration and not preparing for future immigration is setting the doomsday clock on a capitalist system. Trump is headed for a pyrrhic victory.
Tariffs
In the Trump world, tariffs obtain revenue for the government, which might enable a decrease in income taxes, and give an added opportunity for American industry to compete. The first proposition is obviously false; tariffs raise the price of imported goods and shift the relief of the income tax burden to an equal import tax burden. It is a wash. Stimulating production facilities to discard their mothballs and become alive again is speculation. Tax the imports of one nation and another nation steps in with low price goods.
Canadian and Mexican exports to the United States are highly valued added products. The U.S. ships unfinished products to those nations. They add their labor and resources and ship finished products to the United States. Keeping Canadian and Mexican added value to a minimum is mandatory for U.S. manufacturers. Tariffs augment prices of the imported goods, which, from producer perspective, is equivalent to augmenting the added value. American producers cannot look inward for relief. They must look outward and find labor from other nations that can fabricate the finished products.
And there is always retaliation. Looming in the tariff debate is the spectra of the1930 Smoot-Hawley tariff, “that raised tariffs on over 20,000 imported goods to protect American businesses and farmers during the Great Depression. However, it led to retaliatory tariffs from other countries and significantly decreased international trade, worsening the economic situation.”
Government downsizing
Another bugaboo, from those who rail against inefficiency and free riders, is the swollen government bureaucracy. Government and bureaucracy are one word; always swollen, the government absorbs unemployed whose paychecks circulate in the economy. Their lack of productive activities does little harm. Yes, there are workers who get a free ride. This is bothersome and not resolved by the stampede of a Musk ox.
The government is not a business with a profit and loss sheet. It can downsize but not without consideration that inefficiency it is not an employee fault; at the day of hire, the government owed the hire person proper training, proper supervision, and proper tasks. The correct way to downsize is for departments to submit and defend budgets. After that, attrition and incentives are used to streamline the departments so that all seats are warm and office temperature rises from the heat of the more energetic civil servants.
Depressing to observe the disUnited States thump its chest, while trending into a thinning of its constitution. The heralded phrase of U.S. foreign policy experts, “We had to destroy them in order to save them is mirrored, “We had to destroy ourselves to save ourselves.” Might be just what Americans and the world needs. The Trump era has sputtered before Tesla is able to pass Nissan in U.S. automobile market share. Antagonizing the entire world, especially those who share borders, is the ultimate constraint to a successful America. Replaying 1930 brings back the events of 1930. Trump’s mania, expressed in his outbursts, has been visited upon the American public. Bring back the Prozac, manic depression is now a standard U.S. disease. Trump will soon be seen as another Nicolae Ceausescu, integrated into the disintegrating American dream.