Thursday, April 26, 2018

GOODBYE PAUL, TAKE AYN WITH YOU


On April 11th., Speaker of the House of Representatives Paul Ryan announced that he will be resigning from political office, saying "I like to think I've done my part, my little part in history to set us on a better course."  The translation for this is that he foresees, like many others, a huge wave election for the Democrats coming in November  that would strip him of his status as majority speaker, and he'd rather avoid that humiliation.  Ryan has been a frustrating figure in the past two years:  during the 2016 presidential campaign, Ryan said Trump's statement that  Judge Gonzalo P. Curiel shouldn't be able to rule on a case involving Trump because of his Mexican heritage, was "the textbook definition of a racist comment", and he was reluctant to endorse Trump.  But once Trump was in office, Ryan's criticisms have grown more and more tepid, even as Trump has defended Klan and Nazi protestors and referred to African countries as "shit holes."  Ryan even called out Trump's "exquisite presidential leadership"(!) before the president signed the recent tax cut bill.
That tax bill says so much about Ryan; it's really his crowning achievement, a one and half trillion dollar change in the tax code that he feverishly worked on to get to the president's desk.  But it also shows his greatest flaws: it's heavily skewed towards the rich and increases the same national deficit that he used to be so worried about when Barack Obama was president.  It also continues his unshakeable belief in his Ayn Rand influenced world view that the federal government is always too big and intrusive in our country. Ever since he first entered politics, Ryan has expressed his admiration for twentieth century author Rand's books like THE FOUNTAINHEAD and ATLAS SHRUGGED. (Although the fact that Rand was a pro choice atheist has caused him to tone down his admiration recently.) 
The Russian  born, virulently anti Communist Rand has become the patron saint of the libertarianism movement, that outspoken fringe of people who  worship the free market, see taxes as theft and perceive every stop sign and streetlight as an affront to their freedom.  Although libertarians have some progressive views (they support gay marriage and drug legalization), their message of no big government and lower taxes has mostly found favor with people on the right like Ryan.
To me the individualistic beliefs of Libertarianism are the flip side of the collectivist beliefs of Karl Marx and his followers.  Look at what they have  in common: they both are based on strongly written, popular books written by charismatic authors.  They both have ideas that sound good on paper, or  when being discussed in dorm rooms or coffee shops, (everyone is equal!  everyone is completely free!) but that fail when tried on any large scale.  From the repressive Communist regimes of Russia and China, to the absurd, aborted attempts of billionaire libertarians like Peter Theil  to create some libertarian island utopia, they just aren't a realistic way to run a country.
When you think about it, the extreme individualistic beliefs of Ann Rand and the extreme collective beliefs of Karl Marx both fall short when you look at human evolution: human beings have clearly evolved to be tribal, not solitary animals.  And in a tribal situation, there are inevitably times when you do things out of your own self interest, and other times that you must make sacrifices for the good of the tribe overall.  Or to put it another way, the money I earn I should be able to keep most of  to spend on what I want, but any working society needs things like roads, bridges, schools, and so on, which can only be paid for by taxes.  A middle ground is essential, which is why extreme ideas like Marx's and Rand's are doomed to failure.
It would appear that the rise of Trump  and the resignation of Ryan, even though they agree on some issues, is closing down the libertarian wing of the Republican party for now, to be replaced by one that pushes for non libertarian ideas like   protectionist tariffs and hardline anti-immigration policies.   And while I certainly don't agree with Trump's positions, I am glad that Ayn Rand's beliefs are getting closer to being thrown into the dust bin of history.

Sunday, April 8, 2018

A POSSIBLE BREAK


During the presidential campaign, Donald Trump (in)famously said that his supporters were so faithful, he could shoot someone in the middle of Times Square, and they'd still support him.  Sadly, that appears to be true, given the fact that no amount of scandals (Porn star affairs! Russian collusion! Whatever the hell Jared Kushner is doing!) can lower his approval ratings among a certain segment of the population.  Putting it bluntly, as long as he rants about immigration and can blame Democrats for not paying for  his wall (that, it should be mentioned, he repeatedly said that Mexico would pay for), around 35% of the American public will support him, even if he burns a cross on the White House lawn while worshipping an idol of Vladimir Putin.
Or so it would seem.  A possible breaking point may have finally arrived: acting on a promise he made on the campaign trail, and against the advice of some of his own economic advisors, on March 8th. Trump announced a tariff on steel and aluminum imports targeted at China.  On March 18th.  45 U.S. trade associations representing some of the largest companies in the country, urged him not to  do this, saying it would be “particularly harmful” to the U.S. economy and consumers.   On April 1st., China responded in kind, announcing tariffs of their own; two days later Trump plowed forward, announcing 50 billion dollars more in tariffs.  A day later, China responded with tariffs on over 100 American products. Last Thursday, Trump  threatened further tariffs worth 100 billion dollars.  Somehow, in the middle of all this, the president tweeted out that trade wars are easy to win (!), meanwhile the stock market (which he has always taken credit for when it rises) tumbled sharply as investors were spooked at where this game of economic chicken would end.
The part that gets really interesting is that China, not being stupid, specifically targeted for tariffs products that are manufactured in the American heartland, that is, Trump country.   Almost immediately, soy bean, corn and wheat farmers in middle America have been hurt by the tariffs.  With midterm elections around the corner, a Republican party president carrying out policies that are hitting the very people who supported him the most could prove disastrous for the party.  Already, some leading Republicans are pleading with him to stop, but to no avail.  While it is true that China has often pushed for economic advantages  globally that have hurt American manufacturing, most analysts feel that it would be better for the president to build a coalition of other countries working against China's unfair practices rather than going it alone.  But Trump's lack of desire to negotiate with our allies (just listen to his rants about the UN and NATO) has been a hallmark of his administration.
Another question is, why is he doing this now?  The most recent data shows that the country's unemployment is at 4.1%; with our economy doing well, why start a trade war with a the world's second biggest economy?  It's because Trump is obsessed with the fact that America has a trade deficit with China; on the campaign trail, Trump repeatedly hammered China for "raping" the US economically, bringing up the trade deficit as an example.  While this over the top (and frankly racist) characterization played well with his xenophobic crowds, turning that angry rant into actual economic policy has proven to be a lot harder, no matter how easy he thinks trade wars are to win.  And in typical Trumpian fashion, he has repeatedly said that America runs a trade deficit with China of over 500 billion dollars; according to the New York Times, it's actually 375 billion, but given that this is a man who repeatedly says that millions of people voted illegally in the last election without a shred of proof, being off by over a hundred billion is closer to the truth than he usually is.
It appears that Trump, quite simply, has no real idea what the trade deficit is, since he often says that the money has been "stolen" by China and other countries.  Despite his boasts about his business genius and degree from business college Wharton, he somehow believes that there is a warehouse in China with an enormous pile of American trade deficit money!    But, as economist Paul Krugman has pointed out: "Except at times of mass unemployment, trade deficits aren’t a subtraction from the economies that run them, nor are trade surpluses an addition to the economies on the other side of the imbalance."  Or to put it more bluntly, is it really a surprise that we buy more things from China than they do from us?  They have a billion more people than we do, and a huge cheap labor pool to draw from (I would be more sympathetic to Trump's tariffs if they were somehow tied to China's human rights violations, but of course they aren't).
In the past year, as Trump has bounced from one chaotic mess to another, his loyal followers have stood behind him.  But now, when it appears that his impulsive, anger based temperament could result in real economic pain for them, they may finally have reached their breaking point.  I only wish that they had seen this coming sooner.