Despite all the flakiness and back and forth Trump’s actions have a unified purpose. Like the Democrats, but even more so, they disproportionately benefit the rich. (We’ll leave aside the pandemic response, which is complicated and an emergency.)
This table is older, and based on the House version of Trump’s budget and tariffs, but should be substantially correct:
Tariffs effect the rich less, because they spend less of their income on goods. The biggest companies often get exceptions to the tariffs as well. Currently that includes Apple, Coca-Cola, Stellantis and GM.
We are also seeing signs of “Greedflation”, using the tariffs as an excuse to raise prices faster than costs. This was huge during the pandemic,and it will be huge this time. Overall the really reach will benefit from tariffs, not be hurt by them. Trump talked a good game about making sure companies wouldn’t use tariffs as an excuse to raise prices, but that’s all it was, talk. For tariffs to improve the lives of the working and middle class, they would have to translate into well paid jobs, and there is no effective mechanism for that in America.
Let us turn then to the “NATO nations must spend 5% of GDP on their military.” That’s a lot, and it means that either taxes must be raised (they won’t be except for consumption taxes on the poor) or other priorities must be slashed. So the poor and middle class in those countries will get it in the neck.
Now, if that 5% was spent on domestically produced weapons and on hiring more soldiers and support staff, at least it would get back into recirculation. Indeed, there’ll be some of it, but most countries have agreed to buy Americans weapons and equipment.
And who will that benefit the most? The American rich.
In some cases buying American is so foolish it boggles the mind. Canada’s only real active military threat is America, and American weapon systems these days are mostly online and can’t be used if America doesn’t want them to be, even leaving aside the possibility of simply bricking them with an update.
But in general, increased military spending was an opportunity for industrial policy and to cut the aprons to the US, and actual statesmen would smile at Trump, make the promises and use the 5% in ways that would benefit their own country. Instead most of the benefits will flow to America.
As for the idea that America is a reliable security partner, well, they couped Ukraine, built its army up massively, encouraged it not make peace when easy and favorable terms were offered and is now cutting a deal with Russia after extorting mineral concessions from Ukraine.
Never ally with America if there is any other option.
But the core point here is simply that the “does it make the rich even richer” metric, which works for American politicians as a group, is even more predictive of Trump. Oh sure, he’ll throw the hoi polloi some social policy red meat, and yes, some of the moderately rich are being hurt by his policies, but the real rich, they’ll mostly make out like bandits.
Until China eats their lunch, which they are and will.
Right now America’s policies appear to be “loot the satrapies and form a non-Chinese bloc which is smaller, weaker and poorer than the China bloc.”
Smells like the USSR to me, except the USSR started out very strong and with higher economic growth than the West. America is trying the strategy as its in terminal decline.
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Purple Library Guy
It’s going to be interesting to see just what Canada in fact spends the military budget on. There’s a fair amount of talk as if we won’t in fact buy American, along with a certain amount of quiet institutional inertia suggesting we will, plus there’s Carney claiming that building mines for things like rare earths counts as military spending and will represent quite a bit of it, which is . . . weird, but probably better than most actual military spending. Really doesn’t seem like anyone knows what’s actually going to happen (or whether we will genuinely spend all that money at all).
What worries me most about the whole massive military spending schtick is his insistence that he’s going to make up for it with huge spending cuts.
ibaien
one of the strangest things about this very nice blog is that it perpetually advocates for maximalist russian and chinese foreign and domestic policy more or less on the thesis that “well, it’s not america; whatever they do must be nice”. and yet, most of the readership clearly skews to a more decentralized, direct democracy worldview. the ownership excuses grozny and tiananmen as simply the price of progress, i guess.
mago
As long as we’re ruled by demons with their demonic agendas we’ll see war and destruction.
It’s so simple and obvious as to
defy comment yet I can’t help myself.
Ian Welsh
Ah yes, Ibaien with the “I don’t actually read the blog” take.
1) I’ve said Putin is evil, and gotten massive pushback on that from many of my commenters. (I’ve also complimented him on many things, like massively increasing Russia’s prosperity.) Grozny and the Chechen war is specifically what I was referring to, by the way.
2) When was Tiannamen, exactly? How many people were killed and imprisoned?
3) If you add up all deaths due to Chinese and Russian foreign policy over the last 40 years, and do the same for Western foreign policy, which one do you think will be higher?
4) I note the weird tying of foreign policy to Tiannamen, which was a domestic issue.
5) Largely off topic. And no Putin debate in this thread going forward. Let’s talk about Trump and NATO 5%.
NR
Not standing up for Chinese billionaires here, as I’m sure most of them are corrupt and terrible people just like our billionaires, but it seems to me that a big difference between powerful people in America and China is that powerful people in America think that their power comes from their own wealth, while the powerful in China realize that their power is solidified by the overall wealth of their society.
It seems that American billionaires have chosen to forego being dukes in a prosperous utopia in favor of being god emperors over their very own dumpster fire.
Not that the rest of us get a pass on helping them do that, of course.
Ian Welsh
The number of Chinese billionaires is decreasing. Only major economy I know that to be true of. Since China’s economy is still growing fast, this is clearly a policy choice, and one that’s been discussed here a few times.
Daniil Adamov
Did the USSR loot its “satrapies”? We certainly looted Germany after winning (vae victis). Afterwards it gets more contentious – in Russia it is widely asserted that the RSFSR was looted to benefit the other SSRs, though in the other former SSRs the opposite is a similarly popular view. As for the People’s Democracies of Eastern Europe, we certainly exercised considerable political and economic control, but I’m not sure what looting there was. (Perhaps there simply wasn’t much to take, though.)
Then again, we also didn’t have the same incentives as American elites. The Soviet society was certainly highly stratified in practice, but true economic power was about access more than money. Not much point in looting for individual benefit under that system (other than to accumulate various precious and useful items, but that’s much smaller-scale than money hoarding).
“Never ally with America if there is any other option.”
Of course, but I’m still not sure the lesson sank in. (There are still some in the Russian political and intellectual elite who openly daydream about a Russian-American Northern Alliance against China, once the current “misunderstanding” is resolved.)
StewartM
Daniil Adamov
Did the USSR loot its “satrapies”?
What I’ve read is that the USSR’s “satrapies” were an economic drain on them (i.e. they spent more money on helping them than they got back in revenue).
Of course, our wise economic men say that truly helping someone else is foolish; like Trump, you must “win” in everything. Maybe that’s why our developing world satrapies always say poor?
https://www.youtube.com/shorts/00K4OzfBZf4
StewartM
Ian Welsh
and yes, some of the moderately rich are being hurt by his policies, but the real rich, they’ll mostly make out like bandits.
As predicted, once the poors have been robbed over everything they, and now they’re scraping the bottle of the barrel on middle income folks, they’ll start going to rob the moderately well off. Because our capitalist etites, unlike the inventor industrialists of the 19th and early 20th century, don’t really know how to create material value or wealth themselves. They only know how to rob people legally.
Mark Level
Not too off topic; I’ve been traveling across the country the last 3 days, a few hours out of my destination today, and in a nice hotel with time to catch up a bit. Listening to yesterday’s Due Dissidence podcast and they cite some evidence of massive ship and sub buildup by Trump off the Venezuelan coast. See also the link here– https://meaninginhistory.substack.com/p/will-trump-invade-venezuela-during
The map is very telling. It is timed for Congress’ recess, not that those toothless eunuchs would raise a finger to stop another invasion totally outside of the War Powers Act, and on completely fraudulent and bizarre claims that Maduro heads a massive “Drug Cartel” trafficking into the US. Maduro has been indicted because in this country they can indict a ham sandwich. Mexican President Claudia Sheinbaum has expressed alarm, in Venezuela local militias are being activated.
Keep your eyes peeled!! This could be the first real new quagmire by our “Peace President.” In a previous election cycle, Trump dangled invading the country to steal all the oil. I don’t think it’d be easy, I do wonder what dead ‘Muricans coming back in body bags would do to further erode our King’s popularity? The Dimmies will do nothing beyond demand “Support Our Troops”, I will guess.
Feral Finster
“Now, if that 5% was spent on domestically produced weapons and on hiring more soldiers and support staff, at least it would get back into recirculation. Indeed, there’ll be some of it, but most countries have agreed to buy Americans weapons and equipment.
And who will that benefit the most? The American rich.”
Europe has no priority other than the War On Russia and getting the United States to fight on europe’s behalf.
All these concessions are offered, because they can just as easily be snatched away if the United States does not deliver.