Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 16
I try hard to avoid discussing the whirlwind, but the last news site I checked now has a section "Tariffs Live Updates", presumably the only way to keep up. Specifically, proposed blanket 50% tariff on US imports from the EU on a week's notice.
Quite aside from the discussions of expense and futility of this for the US, and how utterly meaningless bilateral trade balances are, I wonder if the person proposing this even knows that the US has no trade deficit with Europe as a whole? Trade has been roughly in balance for years.
US tariffs on cars entering the US are particularly droll if the goal is protectionism, as US car companies import considerably more cars to the US than do Europe- or Japan-based car companies.
Jim
No. of Recommendations: 13
I admit to never reading the legendary "Art of the Deal" where Trump explains his techniques, so the following may or may not be obvious.
That said, I'm going to quote a couple of paragraphs from "Influence - The Psychology of Persuasion" by Robert Cialdini (a book I recommend everyone should read)
"Much of the compliance process (wherein one person is spurred to comply with another person's request) can be understood in terms of a human tendency for automatic, shortcut responding. Most of us have developed a set of trigger features for compliance -that is, specific pieces of information that normally tell us when compliance with a request is likely to be correct and beneficial.
Each of these trigger features for compliance can be used like a lever (of influence) to move people to agree with requests.
Perceptual contrast-the tendency to see two things that are different from one another as being more different than they actually are-is a lever of influence used by some compliance practitioners. For example, real-estate agents may show prospective home buyers one or two unattractive options before showing them a more attractive home, which then seems more attractive than it would have if shown first. An advantage of employing this lever of influence is that its tactical use typically goes unrecognized."
I'm going to say that Trump is using this process. He first announces ludicrously onerous terms (but plausible for someone as apparently erratic - obviously artificial as they might be) and then when he "relents" to merely 3X what they were before the process started, everyone sighs with relief.
It is my opinion that Trump is enjoying the experience of being able to get away with the most outrageous behavior - especially as it puts him on TV multiple times each day. Our attention is being usurped by "The Trump Show" which frequently obscures, for many, the process being carried out in the background.
There are many in the US who did not advance academically beyond high school and resent the way that those who went to college tend to earn more money and live at a higher standard of living. Especially if those college graduates are foreigners - and even more so if they are "people of color". If it was pointed out that the majority of the founders and executives of the US IT industry, one of the jewels in the crown of US elitism, are from this cadre, they would simply respond that those "jobs" should be held by Americans. I won't go down that rabbit hole by pointing out how poorly native Americans do academically compared to other demographics. It is also true that relatively few Americans from those who never advanced through the academic system have even a rudimentary understanding of economics from either an historical or a pragmatic basis (and suspect I can safely say few would be hanging out on this board).
Jim is correct that Europe has not been a trade threat to the US, but in this case, it does not matter a bit. This is all about showing how powerful we are and proving how important we are to the world. There was a time, a bit over a century ago, when the US needed Europe more than the reverse. Europe figured out how to destroy much of its asset accumulation during the first half of the 20th century which, on a relative basis, pushed the US ahead of the crowd. We now have a second hyper-power developing in China and, rather than creating a united front, we seem to be determined to prove to everyone (except for Russia) that we don't need them nearly as much as they need us - at the same time as we dramatically change the priorities of what we spend our national fortune on and how we divide up the pie.
Jeff
No. of Recommendations: 4
never reading the legendary "Art of the Deal" where Trump explains his techniques
Also never read it--and no intent to do so. Spankee has a vague idea of what he wants done. However, he does not have a clue how to actually do it. He hires others to do the real work. He claims success if it sort-of gets done and blames everyone else when it fails. Thus, based on the Spankee-scale, his book is a failure--as is he.
No. of Recommendations: 25
Jim is correct that Europe has not been a trade threat to the US, but in this case, it does not matter a bit. This is all about showing how powerful we are and proving how important we are to the world.
I presume you're right. But even if that were the goal, it's more of an "own goal" to whatever extent any of the intended audience is outside the US.
Latest Democracy Perception Index survey figures:
Share of countries with positive view of the US last year: 76%
Share of countries with positive view of the US latest: 45%
It's not winning any personal popularity contests, either.
Percent of countries with net negative view of Mr Trump: 82%
Percent of countries with net negative view of Mr Putin: 61%
Percent of countries with net negative view of Chairman Xi: 44%
Quite the accomplishment : )
Jim
No. of Recommendations: 2
Quite aside from the discussions of expense and futility of this for the US, and how utterly meaningless bilateral trade balances are, I wonder if the person proposing this even knows that the US has no trade deficit with Europe as a whole? Trade has been roughly in balance for years.
We may have to resign to the new reality where facts and common sense don’t count anymore as long as some odd narrative can be fed to an enthusiastic, if not naiveand forgiving fan base.
No. of Recommendations: 0
It's not winning any personal popularity contests
For men who need to prove to themselves and others how powerful and superior they are it´s not about popularity. Dschingis Khan didn't crave to be liked, but to be feared. "The world is scared of me, so I am". Goal accomplished.
