President Trump has not been the flamethrower to the establishment that some hoped for but this is an issue of expectations. Remember when you thought Jeff Sessions was a competent good guy? A lot of mistakes were made with the transition team, staffing and Jarvanka, but there are two bright spots that stand out considering the last twenty five years of DC. The first is Trump’s reluctance to jump into a conflict for whatever media created urgent issue there is in the Middle East. The second is Trump’s complete change to American trade policy. The trade policy zigs and zags but for the first time in ages, makes moves to reward the American worker.
It is not much. Trump has simply added a few tariffs on some goods. If you look at the long view of tariffs, it breaks the trend line. This is documented. Please review the buck in the trend below. This takes tariffs to levels not seen in fifty years.
It is a miracle that one man now has both parties shifting the economic policy of America. The reorientation might just be to secure America’s supply chain for the military industrial complex in case of war. This makes sense if you consider the left’s obsession with eliminating nukes and the bipartisan love of proxy warfare. These policies place more stress on conventional forces, therefore any nation that can choke our supply of components or rare earth minerals is a threat. All of the talk of Cold War 2.0 with China should alert readers to this. They will be the USG establishment’s proxy opponent, likely in Africa, so we need to limit our vulnerabilities to their economic power.
How did this happen though? Why did this happen? Why did we give away trade left and right? Spandrell wrote on what happened with China. The misguided trade deals are explained away in Robert Rubin’s autobiography with hand waving and an aw shucks it didn’t work attitude. A twenty five year view of foreign direct investment shows what happened with Turkey. America built the very competitor it is fearful of now. America and its allies built up Turkey to the point where Erdogan has carved out a quasi-sovereign state. America cannot get rid of him, he has a lock on the electoral politics, and he is buying Russian weapons system now. Seymour Hersh reported on Turkey being a big instigator and thorn in America’s side with Syria. It is all because we made them stronger.
For what cause? Domestic politics answers this. The left was in control of the federal bureaucracy and our Deep State was very strong fifty years ago. Compare their job on Nixon versus their attempt at a job on Trump. Decay is everywhere and not just in liberal cities. The system that the communists infiltrated to win power on the left was built on a massive depression and the old Democrat machine of cities, unions and the Solid South. The academics, intellectuals and bankers that funded them did different moves to disassemble these pieces through the decades. Anti-mob judicial work destroyed city machines. The cities themselves saw the white ethnics (old low) replaced by urban black voters (new low). Immigration was the never-ending river of voters and labor to destroy the unions.
The unions and labor represented the voting muscle for the left prior to the McGovern coalition that we see today. The Solid South caught onto the act, albeit a bit delayed, but they did switch parties as they saw the federal government send the tanks in against them and attempt to destroy whatever local power they thought they had. How did labor not see it? How are they still foggy on it?
It was right there for them to see in the changes within the Democrats from ’68 to ’76. The AFL-CIO’s Al Barkan was quoted once as saying, “We aren’t going to let these Harvard-Berkeley Camelots take over our party“. This is exactly what happened. White liberals straight out of academia and some in their early 20s rewrote the rules for conventions, delegates, primaries, etc. They took away the veto labor had on the Democrat nominee. While their rank and file broke from leadership to vote Nixon in ’72 and become Reagan Democrats in the ’80s, leadership still believed they had a future in the Democrat party. Nixon’s White House made explicit policy moves for the blue collar strategy and to maintain the economic situation for the common man. Leadership just did not get the memo.
The biography of Democrat fundraiser, leader and wheeler-dealer Robert Strauss, is enough to show the abandonment of the American worker and the alliance between Big Business and identity politics in plain language. Strauss was a millionaire Texas lawyer who formed a law firm that redefined lobbying and used government to print money. Banks love international trade. They lend to foreign governments, they lend to multinationals, and they take their cut as consultants, underwriters or issuers or they hold the bonds and collect higher interest for the risk.
With individuals like Strauss in charge of the party, any victory that put the left in the White House meant preeminence of policies that help those big business types and their low allies. Labor could not block McGovern’s nomination in ’72, and the symbolism should have been enough to change their direction. The commissions after that convention became a fight, which labor lost. Strauss lied to labor and abandoned them just as he would later lie to all of Congress for a trade act in 1979 that accelerated the decline in our productive economy. Who replaced labor’s muscle though? Minorities, women and reformers took up more space. Another issue that labor was blind to was that LBJ’s welfare programs were not rolled back by Nixon or Ford. They grew.
What began to happen was rather than manufacturing taking the prime spot and helping the voting muscle that labor provided, a new high-low pairing was rewarded. The welfare system put into place allowed for a greater centralization of power and a more direct patronage system for the left’s new high-low alliance. Welfare meant there was no private side middle man taking a cut. The political power could pay off the low directly with welfare, and in return, they had to change economic policy for the benefit of the new donors that the likes of Strauss represented. Fast forward a generation and in the Clinton White House every single economic policy debate was won by the banker Rubin rather than the pro-labor economist Robert Reich.
Every free trade agreement really meant that capital was free to cross borders, fund production elsewhere and sell to the American market without penalties. It was pitched as reaching new markets, but America was the market. Chinese workers making $1,000 a year in 1990 were not going to buy our products. The same with the variety of low paid workers across the Third World. It was all about reducing costs for American capital. That this may empower foreign leaders to turn into enemies was never a consideration. The elite thought China would not climb the economic ladder without that class wanting voting rights despite China not having a history of voting. America’s deep state felt with Gulen in the Poconos earning millions that they could topple Erdogan like they had dealt with Turkish politicians before.
There were other developments that prevented going back by the left, and likely will destroy any attempt at a real bipartisan return to protectionism or even fair trade. Some states instituted right to work. Other blue states worked the blue state model of FIRE, education and health care to build their economies as manufacturing fled. Blue states also have a much higher cost of living due to the coastal RE bubbles. Any return of manufacturing will likely go to red states and right to work states in lower cost of living areas. This would reward the opponents of our overlords. This would reward the voting muscle of the other side and eliminate welfare recipients or potential recipients. The left will not allow this.
Labor was not dumb. They just did not believe the leadership class in America would sell out Americans as thoroughly as they did. How could labor foresee the immigration tidal wave after 1965 when America had repeatedly had deportation sweeps by the millions at different points of the 20th century? How could anyone foresee a situation where our China does not even have enough imports from America to even slap tariffs on our goods in retaliation? George Meany was chomping on cigars never thinking that tens of millions of Mexicans would destroy California with the American left and some of the quisling right applauding the whole time.
Turning our economic ship will likely not happen without an external shock. It is a closed loop of Wall Street financial wizards lubing the political machinery to keep the new low happy so Harvard-Berkeley trained bureaucrats in DC can play imperial overlords. The empire does look wobbly and the chess board does not look at favorable as it once did. Looking around the geopolitical chess board, Turkey wants to restart the Ottoman Empire and China wants its place in the sun and every American wondering what happened should look for the signs over there that say Made In America.