Tariffs: We Must Be Better
I recently posted on LinkedIn criticizing the new tariffs as lazily developed, and wondering why the admin tried to run cover and make them seem more sophisticated. This aligns with my critique of DOGE, an organization that does sloppy work, regardless of your alignment with their stated goals. But I want to be more clear, these tariffs are dumb. They are a blunt instrument used poorly by people who think trade deficits mean someone's winning. I assume most of the people reading this understand the economic reasons why broad tariffs are a bad idea, and I assume that most of you also understand that there are some decent arguments for targeted tariffs. These tariffs are not targeted and are crippling for the economy. There will be no manufacturing renaissance. There will be hats, slogans, and bankruptcies.
Perhaps Trump will reverse and try to strike deals, and perhaps that works in the short term. I do not think this will happen without Congressional intervention, or before the serious damage to the economy becomes undeniable, because every public statement he makes hammers home the fact that he does not understand what a trade deficit is. But it could happen, he could reverse. And perhaps markets rebound. Even in that case, I still believe there are strong odds that this is the last gasp for the US as the leading power in the world going forward. There are lots of technical economic reasons that the US emerged as the leading power in the post-war world, but the foundation of that leadership was, ultimately, the fact that the US was trustworthy, and would play by the rules in a new rules-based order. We are no longer trustworthy.
In the long term, given that we can’t be trusted, I think that businesses that have optionality for their operations would be wise to consider operating somewhere outside the US. In good times, there’s not a much better place to be a large multinational corporation, but businesses need to be able to forecast with confidence in order to make strategic decisions. Trumpism is a forecaster's nightmare, and there’s little hope it will get better with him gone. The nation is in the grips of directionless populism, unmoored from foundational ideas, and unmoored from virtue. Put simply, we, collectively, have no idea what we want to be, we only have the ability to perform low-accuracy enemy identification. We were handed global preeminence on a silver platter and traded it in for grievance politics and memes. The citizenry has become so intellectually disengaged — across the political spectrum — that it cannot distinguish a tantrum from a strategy.
Right now, it’s easy to point fingers at the Right—they brought us Trump, author of our latest failures. But if you're on the Left, look inward. The years 2020-2022 were full of intellectual dishonesty: slogans masquerading as "science" or "criminal justice reform." "Follow the science" often wasn't scientific or rigorous; nor were "community policing" or "antiracism." I know, because I jumped on the criminal justice train and now regret it. COVID policy illustrated this perfectly: masks were effectively useless, vaccines very useful, but most people claimed both were either necessary or worthless, because tribalism overwhelmed independent thought. Inflation was not "transitory" and the economic rules about the effects of government stimulus on inflation did not change.
Grievance defines the Right, while the Left is captive to technocratic thinking—both sides ignore foundational ideas. One side trades understanding for misdirected anger; the other substitutes spreadsheets for serious reflection, and the spreadsheets are often wrong. Lists of numbers used incorrectly but providing an air of scientific rigor that strengthens the argument in less discerning circles. Neither asks what we ought to do, on a personal level, only who has the proper vibe alignment to tell us what to do. And the vibes are repulsive, literally, the vibes of the right repel the left.
A democracy’s effectiveness is essentially a function of, and bounded by, the quality of its citizens’ thinking. In other words, our collective judgment directly limits the quality of government decisions, and right now, we are failing. Yet we can still change course. A friend’s recent essay, "Book Guilt," reminded me that many no longer even feel guilty for neglecting genuine intellectual engagement. Once, the elite valued wrestling seriously with foundational ideas; today, even that standard is slipping away. The world no longer resembles the one our parents knew, it doesn't even match the world we grew up in. To navigate this change, we must reconnect with foundational ideas. Doing so is our best chance to regain the world's trust, to show again that we are worthy of leadership.