Although the risk of frogboiling human rights abuses won’t go away anytime soon, it’s also important to keep in mind that Trump got popular by doing whatever makes the left condemn him because right-wingers seem to interpret that as a costly credible signal of commitment to them/the right/opposing the left, and his administration has spent a decade following this strategy as consistently as can reasonably be considered possible for a sitting president, most of the time landing on strategies to provoke condemnation from liberals in non-costly or ambiguously costly ways (see Jan 6th).
See Scott Alexander’s classic post It’s Bad On Purpose To Make You Click; engagement bait has been the soul of Trump’s political persona since it emerged in the mid-2010s, and it will be interesting going forward to see whether the recent tariff designs will end up as serious policy and be added as a new centerpiece of the tax and spending regime (which had taken a stable form since the Vietnam War and the end of the Gold Standard[1]).
The case could also be made that the computerization of Wall Street during the late 70s and 80s transformed the economy sufficiently radically that the current tax and spending paradigm could be condered more like 30-40 years old, or you could pin it to the 1950s when the tariff paradigm ended; either way, the modern emergence of massive recessions, predictive analytics, pandemic risk, and international military emphasis on trade geopolitics, all indicate potential for elite consensus around unusually large macroeconomic paradigm shifts.
It seems the recent tariff designs already are serious policy. What do you mean by “added as a new centerpiece of the tax and spending regime”? What are the alternative futures?
It seems the recent tariff designs already are serious policy
If the tariffs are revoked, reversed, unenforced, or blocked in some way, that strongly points towards possibility that they were understood to be unenforceable all along, and their imposition and failure was just a kayfabe set up by the president to look like he tried and juxtaposing himself against his enemies, depicting them as at fault for making the shiny new policy impossible. This is not unique to Trump, it has been very prevalent practice among presidents and congress since most of the Cold War and possibly long before that (I don’t have the energy to determine the exact age, only that it’s an old old practice and very widespread).
What do you mean by “added as a new centerpiece of the tax and spending regime”?
Sorry if I wasn’t clear here. Tariffs were a very large portion of government revenue, and therefore spending, until the 1950s when income tax grew (largely because workers were pretty risk-intolerant and mass literacy made them more willing and able to file paperwork than other avenues of taxation) and government as we know it pivoted to revolving around income taxes instead. Tariff-based taxation governments and income-based taxation governments are pretty different government/civilizational paradigms, similar to the distinctiveness of the “dark forest” government paradigm in Africa centuries ago where villages built near roads were more likely to be enslaved or conscripted or have forced labor quotas imposed on them, resulting in villages largely being distant from roads.
What are the alternative futures?
In the high-tariff scenario, governments and militaries (in Europe and Asia too, not just the US) have probably predicted that international trade is sufficiently robust, and the participants sufficiently risk-averse, that imports can be milked, at least relative to risks from continuing to depend so heavily on income taxation (e.g. maybe tax evasion advice gets popular on tiktok or something). This would not surprise me as many of the best minds in the US and Chinese militaries have spent more than a decade thinking very hard about economics and international trade as warfare, and it seems to me like they at least believe they’ve developed a solid understanding of what economic collapse contingencies look like and how much stress their economies and trade networks can take. This means international trade will be much more expensive as it is basically heavily taxed and those tax rates can change on a dime which greatly increases everyone’s risk premiums, but also might cause governments to focus on prioritizing the robustness of international trade if it becomes the main revenue source, in addition to forcing prioritization on the domestic economy because the ground has been burned behind them (investing in industries that depend on imports or exports is riskier and less viable due to the deadweight loss and risk premiums added to international trade). Generally it means broader government control as well as less stability, as income taxes can’t really change on a dime in response to a nation’s actions or target specific industries, and tariffs can.
If the tariffs are revoked, reversed, unenforced, or blocked in some way, that strongly points towards possibility that they were understood to be unenforceable all along, and their imposition and failure was just a kayfabe set up by the president to look like he tried and juxtaposing himself against his enemies, depicting them as at fault for making the shiny new policy impossible. This is not unique to Trump, it has been very prevalent practice among presidents and congress since most of the Cold War and possibly long before that (I don’t have the energy to determine the exact age, only that it’s an old old practice and very widespread).
Sorry, I don’t really understand your idea here. In the passive form of “they were understood to be unenforceable all along”, I do not understand who you think might have understood them to be unenforceable. The markets seem to understand them as enforceable to a relevant extent: “The S&P 500 sank nearly 6%, the Dow plunged 2,230 points, and the Nasdaq lost 5.8%, hitting their lowest levels since last May.” (https://tradingeconomics.com/united-states/stock-market) The movements on the markets have already had massive effects on who owns what, they have affected geopolitical relations and expectations about the future of these relations.
Tariff-based taxation governments and income-based taxation governments are pretty different government/civilizational paradigms, similar to the distinctiveness of the “dark forest” government paradigm in Africa centuries ago where villages built near roads were more likely to be enslaved or conscripted or have forced labor quotas imposed on them, resulting in villages largely being distant from roads.
Yes, tariff-based taxation governments and income-based taxation governments are different. However, I don’t understand the comparison to the dark-forest government paradigm.
Although the risk of frogboiling human rights abuses won’t go away anytime soon, it’s also important to keep in mind that Trump got popular by doing whatever makes the left condemn him because right-wingers seem to interpret that as a costly credible signal of commitment to them/the right/opposing the left, and his administration has spent a decade following this strategy as consistently as can reasonably be considered possible for a sitting president, most of the time landing on strategies to provoke condemnation from liberals in non-costly or ambiguously costly ways (see Jan 6th).
See Scott Alexander’s classic post It’s Bad On Purpose To Make You Click; engagement bait has been the soul of Trump’s political persona since it emerged in the mid-2010s, and it will be interesting going forward to see whether the recent tariff designs will end up as serious policy and be added as a new centerpiece of the tax and spending regime (which had taken a stable form since the Vietnam War and the end of the Gold Standard[1]).
The case could also be made that the computerization of Wall Street during the late 70s and 80s transformed the economy sufficiently radically that the current tax and spending paradigm could be condered more like 30-40 years old, or you could pin it to the 1950s when the tariff paradigm ended; either way, the modern emergence of massive recessions, predictive analytics, pandemic risk, and international military emphasis on trade geopolitics, all indicate potential for elite consensus around unusually large macroeconomic paradigm shifts.
It seems the recent tariff designs already are serious policy. What do you mean by “added as a new centerpiece of the tax and spending regime”? What are the alternative futures?
If the tariffs are revoked, reversed, unenforced, or blocked in some way, that strongly points towards possibility that they were understood to be unenforceable all along, and their imposition and failure was just a kayfabe set up by the president to look like he tried and juxtaposing himself against his enemies, depicting them as at fault for making the shiny new policy impossible. This is not unique to Trump, it has been very prevalent practice among presidents and congress since most of the Cold War and possibly long before that (I don’t have the energy to determine the exact age, only that it’s an old old practice and very widespread).
Sorry if I wasn’t clear here. Tariffs were a very large portion of government revenue, and therefore spending, until the 1950s when income tax grew (largely because workers were pretty risk-intolerant and mass literacy made them more willing and able to file paperwork than other avenues of taxation) and government as we know it pivoted to revolving around income taxes instead. Tariff-based taxation governments and income-based taxation governments are pretty different government/civilizational paradigms, similar to the distinctiveness of the “dark forest” government paradigm in Africa centuries ago where villages built near roads were more likely to be enslaved or conscripted or have forced labor quotas imposed on them, resulting in villages largely being distant from roads.
In the high-tariff scenario, governments and militaries (in Europe and Asia too, not just the US) have probably predicted that international trade is sufficiently robust, and the participants sufficiently risk-averse, that imports can be milked, at least relative to risks from continuing to depend so heavily on income taxation (e.g. maybe tax evasion advice gets popular on tiktok or something). This would not surprise me as many of the best minds in the US and Chinese militaries have spent more than a decade thinking very hard about economics and international trade as warfare, and it seems to me like they at least believe they’ve developed a solid understanding of what economic collapse contingencies look like and how much stress their economies and trade networks can take. This means international trade will be much more expensive as it is basically heavily taxed and those tax rates can change on a dime which greatly increases everyone’s risk premiums, but also might cause governments to focus on prioritizing the robustness of international trade if it becomes the main revenue source, in addition to forcing prioritization on the domestic economy because the ground has been burned behind them (investing in industries that depend on imports or exports is riskier and less viable due to the deadweight loss and risk premiums added to international trade). Generally it means broader government control as well as less stability, as income taxes can’t really change on a dime in response to a nation’s actions or target specific industries, and tariffs can.
Sorry, I don’t really understand your idea here. In the passive form of “they were understood to be unenforceable all along”, I do not understand who you think might have understood them to be unenforceable. The markets seem to understand them as enforceable to a relevant extent: “The S&P 500 sank nearly 6%, the Dow plunged 2,230 points, and the Nasdaq lost 5.8%, hitting their lowest levels since last May.” (https://tradingeconomics.com/united-states/stock-market) The movements on the markets have already had massive effects on who owns what, they have affected geopolitical relations and expectations about the future of these relations.
Yes, tariff-based taxation governments and income-based taxation governments are different. However, I don’t understand the comparison to the dark-forest government paradigm.