Why is Trump Destroying the Economy?

gwb-trading · May 11, 2025 at 10:48 AM

Simple economics and reality.

A business owner tested if customers would pay more for American-made. The results were 'sobering.'
https://www.businessinsider.com/afina-shower-head-founder-tests-paying-more-american-made-2025-5

Afina founder Ramon van Meer wanted to see if people would buy a Made-in-USA version of his specialty shower head.

He found it would cost three times as much to produce — and raised the sale price by 85%.

After several days of testing, a total of zero customers bought the USA model.

(More at above url)

newwurldmn · May 11, 2025 at 11:27 AM

gwb-trading said:
Simple economics and reality.

A business owner tested if customers would pay more for American-made. The results were 'sobering.'
https://www.businessinsider.com/afina-shower-head-founder-tests-paying-more-american-made-2025-5

Afina founder Ramon van Meer wanted to see if people would buy a Made-in-USA version of his specialty shower head.

He found it would cost three times as much to produce — and raised the sale price by 85%.

After several days of testing, a total of zero customers bought the USA model.

(More at above url)
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irrelevant when all shower heads are 85percent more expensive.

gwb-trading · May 11, 2025 at 11:29 AM

newwurldmn said:
irrelevant when all shower heads are 85percent more expensive.
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Few people will pay 85 percent more. Demand destruction will commence leading to severe recession. Coupled with significant inflation due to the tariffs.

mervyn · May 11, 2025 at 11:34 AM

newwurldmn said:
irrelevant when all shower heads are 85percent more expensive.
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people will buy the cheapest plastic one in ikea, rather than delta type of triple or quadruple head fancy ones.

$3.49
https://www.ikea.com/us/en/cat/shower-heads-40692/

vs

$$$$
https://phylrich.com/collections/shower-heads

newwurldmn · May 11, 2025 at 11:38 AM

mervyn said:
people will buy the cheapest plastic one in ikea, rather than delta type of triple or quadruple head fancy ones.

$3.49
https://www.ikea.com/us/en/cat/shower-heads-40692/

vs

$$$$
https://phylrich.com/collections/shower-heads
More...

those will be tarrifed too

people will shower less. We’ll be as smelly as Frenchmen.

mervyn · May 11, 2025 at 11:39 AM

newwurldmn said:
those will be tarrifed too
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sure, 3.49x3 is still cheaper than $$$x3. when demand is destroyed, premium shops go under first.

echopulse · May 11, 2025 at 11:17 PM

schizo said:
The real reason Trump is destroying the economy

Trump is imposing ruinous tariffs because American democracy is no longer strong enough to stop him.

https://www.vox.com/politics/407053/trump-tariff-expensive-democracy-authoritarianism-breakdown

The Trump administration’s tariffs are, by every reasonable account, an economic catastrophe in the making. So why are they happening?

One explanation is that this is simply democracy at work. President Donald Trump campaigned on doing more or less exactly what he’s just done, and the voting public elected him. So here we are.

That’s at best a partial story. In fact, it’s probably more accurate to see Trump’s tariffs as a symptom of democratic decay — of America transitioning into a kind of strange hybrid system that combines both authoritarian and democratic features.

Were America’s democracy functioning properly, Trump wouldn’t have the power to impose such broad tariffs unilaterally. Congress, not the presidency, has the constitutional authority to raise taxes — and tariffs are, of course, a tax on imports.

Yet the basic design of the American system has broken down, allowing the president to usurp far more authority than is healthy. In many policy areas, the presidency functions less like a democratic chief executive who operates under constraint and more like an elected dictatorship.

And historically, dictatorships — elected or otherwise — suffer from a fatal flaw: they have no ability to stop the people at the top from acting on their policy whims and, in the process, producing national disasters. This tendency is why democracy tends to produce superior policy outcomes over the long run; why America, and not Nazi Germany or the Soviet Union, won the 20th century.

The tariffs, in short, show the true stakes of democratic decline. It’s not just a matter of abstract principle, but the difference between stability and disaster.

America’s democratic decline caused the tariffs
When Donald Trump and Elon Musk began laying waste to the federal government in February, the political scientist Adam Przeworski declared himself “at a loss.” Though Przeworski is one of the world’s most eminent scholars of comparative democracy, author of many defining pieces in the field, he could not find the right vocabulary to describe what was happening in the United States.

Though “Trump was elected in fair elections,” his subsequent policy agenda amounted to “revolutionary change of the relation between the state and society” — one that attempts to replace the rules and norms that define democratic politics with something very different.

Understanding America in this more textured sense, as a country under a new and confusing regime that is both democratic and not, helps us make better sense out of the Trump tariff debacle.

On the one hand, an electorate that picked Trump is getting one of Trump’s signature policies. Sometimes, in democracies, demagogues win elections — a problem so old that you can find a discussion of it in Plato’s Republic.

On the other hand, democracies rely on legal rules constraining the executive to prevent any such demagogue from becoming a dictator. In the American system, that means a complex system of constitutional checks and balances — one of which is the Constitution granting taxation powers to Congress and Congress alone. Yet instead of asking for statutory authorization to raise tariffs, Trump is exploiting broadly worded emergency legislation to do an end-run around the legislative branch.

This is what a hybrid political system looks like in practice. The United States still has free and fair elections at all levels of government, and is in that sense democratic. But elections don’t matter in the way that they’re supposed to, because the people’s representatives in Congress are not playing their constitutionally assigned policymaking role. This is the autocratic component of the current American system, one that enables the president to sabotage the global economy if he so wishes.

The transformation of America, from democracy to Frankensteinian amalgam, has been in the works for decades.

The primary culprit is Congress, which has — due to a combination of partisanship and political cowardice — become both unable and unwilling to act as the supreme lawmaking body. Instead, it began delegating significant amounts of its own authority to the executive.

Sometimes, this was intentional — authorizing the president to make policy through executive agencies, creating the “administrative state” conservatives decry. Sometimes, it was unintentional: Congress giving the president vague emergency powers that were supposed to function in narrow circumstances, but in practice allowed the president to act unilaterally in all sorts of “normal” policy debates. And sometimes, Congress simply did nothing on crucial policy issues — forcing the president to try to address them with dubiously broad interpretations of their own powers.

The judicial branch deserves some blame too. While the Supreme Court has occasionally stepped in to address presidential overreach, it has done so in a haphazard and partisan way. Moreover, it has long deferred to the president on key issues like immigration, trade, and war.

Observers on both the liberal left and the libertarian right warned for decades that growing executive power posed a problem for democracy and good policymaking. Obviously, they were right to do so in hindsight. Yet part of the reason that they were ignored is that there were other checks on the president that seemed to keep the executive in line.

Some of these were internal executive branch checks. The White House relied on the Office of Legal Counsel — a group of senior executive branch attorneys — to provide independent opinions on the legality of various policy options. Internal policy shops like the Council of Economic Advisers provided informed expert opinions that would steer presidents toward more evidence-based policymaking. In dire cases, the Justice Department would probe potentially criminal activity by executive branch staff.

Other checks were more informal. Fear of losing the war for public opinion might prevent a president from taking a particularly radical stance. The president’s own moral code, a sense that there are just certain things one shouldn’t do even if you can, also provided a kind of soft check on the abuse of power.

But what’s clear now is that all of these internal mechanisms were voluntary. Trump has neutered executive branch checks on his authority and (clearly!) does not possess the judgment we expect from people in the highest office.

It turns out that the rest of the political system — and especially Congress — had created the conditions for our descent into a hybrid political system. The only barriers remaining were norms about how the executive branch should work, ones that a determined president like Trump could smash through with ease.

The tariffs show why our hybrid system is so dangerous
Sometimes, the stakes in this kind of conversation can feel a little fuzzy. Why does it matter if we are living in a hybrid system rather than a full democracy? Sure, the president may be powerful, but if we’ve still got elections, then isn’t everything going to be fine in the end?

The tariffs provide one of the clearest examples of why this matters for everyone: without democracy, the quality of our policymaking gets dangerously worse.

Political scientists have long found that, on average, democracies produce better outcomes for citizens than authoritarian states. They produce higher rates of economic growth, superior technological innovation, better public health services, and are even more likely to win wars.

One of the key reasons for democracy’s success has been its formalized policymaking process. Because laws are changed through legal and transparent processes, ones subject to public debate and legal oversight, they are more likely to both be well-informed by the best available evidence and corrected if something goes badly.

Authoritarian and hybrid regimes ditch these constraints, which allows them to make policy changes a lot faster. But it also enables one person, or a small group of people, to make radical decisions on a whim with disastrous consequences.

Think about Mao’s Great Leap Forward in China, a direct product of the leader’s adherence to a Communist ideology that was out of touch with reality. While Trump’s tariffs are nowhere near as evil — the Great Leap Forward killed somewhere between 18 and 32 million people — the same formal problem contributed to both mistakes.

For a more recent example, look at Russia’s invasion of Ukraine. The disaster began with Putin’s personal obsession with the idea that Ukrainian nationhood was fake and that the territory was rightfully Russian. This notion went from Putin’s personal obsession to actual war because no one could stop him.

Trump’s tariffs will, if fully implemented, be remembered as their own cautionary tale. While he campaigned on them, he wouldn’t have been able to implement the entire tariff package had he gone through the normal constitutionally prescribed procedure for raising taxes. The fact that America isn’t functioning like a normal democracy, with public deliberation and multiple checks on executive authority, is what allowed Trump to act on his idiosyncratic ideas in the manner of a Mao or Putin.

Now, it’s still possible that Trump steps back from the brink. But even if he does, and the worst outcome is avoided, the lesson should be clear: the long decay of America’s democratic system means that we are all living under an axe.

And if this isn’t the moment it falls, there will surely be another.
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Total nonsense.