Trade Wars

Wouldn’t a corporate income tax system be better than tariffs?

This post is a response to a question posed in its complete format: “Wouldn’t a better option than tariffs be to have a corporate income tax system that would create incentives for companies that hire domestically and penalize them for hiring in other countries?”

A “better option” is an alternative strategy for accomplishing what tariffs are intended to achieve. Tariffs protect local businesses and industries that can be overwhelmed out of business by foreign exports, which would otherwise dominate market niches to evolve into monopolies without constraints.

Tariffs are not helpful for much of anything else. The way Trump is using tariffs as a negotiating strategy would be the equivalent of using a scalpel to carve up a side of beef. Inevitably, that scalpel becomes dull and easily broken. People unfamiliar with scalpels would at first marvel at how clean it would cut, then become frustrated with scalpels altogether from misuse.

That’s what’s happened with tariffs.

Trump has misused tariffs as a club for negotiations and, consequently, has created a misperception of their function in a reasonable trade deal that would otherwise be used to protect local industry. He has lied about tariffs stimulating manufacturing, or is so incompetent that he sincerely believes his nonsense.

What this question suggests was already in play during the Eisenhower years, when corporate taxes were high. See the chart below:

The tax rates highlighted by the red outline comprise the years in which the economy was most stable and grew steadily, while the middle class flourished.

The higher tax rates on the upper end incentivized corporations to reinvest in their operations by increasing their hiring to reduce their tax burden. (Other laws were also in place to support this economic growth, such as prohibiting stock buybacks to increase dividends, which were eliminated along with several protections throughout these last decades.)

This stable dynamic changed because the wealthy class wasn’t satisfied with being the richest. They wanted more and continue to want more, such that we have repeated the economic disparity that has repeatedly destroyed stable societies throughout history.

The problems we are struggling with are made incredibly easy to understand once one adjusts their perceptions to realize our struggles are the consequence of a centuries-long class warfare against the people by those who seek dominion in this world.

We will experience a correction in one of two ways:

1. Through a reasonable form of relenting by the wealthy class, who collectively restrain the twenty percent of them who comprise a psychopathic psychological dysfunctionality, and re-establish the rich and influential among us as ethical leaders for humanity, or

2. By continuing to allow the corruption to influence public policy in the way that has encouraged fascism to grow out of control and repress economies while stripping people of their rights, until a tipping point occurs and societies collapse upon themselves in such a dramatic fashion that chaos rules the day. At which point, the people will reassert their power over the powerful in the traditional manner established throughout history by violently deposing the corrupt among us.

We are very close to widespread chaos ruling the day around the globe, while the Canadian election has provided us with a slim glimmer of hope. Meanwhile, the corruption that has fueled this fascist resurgence continues to corrupt the best of humanity.

MAGA is the public face of organizations like the IDU, the Heritage Foundation, ALEC, and an ideological movement self-described as a “Dark Enlightenment” which feed the economic distortions that threaten the integrity of democratic societies worldwide by favouring corporate power and fascist governance through targeted disinformation to manipulate election outcomes based on negative campaigning.

Our best option today is to mitigate the corruptive power of these hatemongering groups and of the psychopaths within the one percent who seek to reestablish a two-class society of rulers and serfs.

Corporations are allowed to exist to serve the people, not rule them. We have eliminated kingdoms from our societies because they are toxic and destructive, limiting our potential as a species. We can restructure corporations into democratic institutions, and we must because the trajectory they are taking us all on is inviting us to repeat a blood-soaked history.

We are again at a crossroads that we have repeatedly visited throughout history because the corrupt among us have little to no respect for humanity. We now have the benefits of a long history and an established pattern, while the changes we need to make to rid society of this corruptive scourge once and for all are within our grasp. This will be our last time at this crossroads if we unite as a people and assert our power as individuals within a shared community that refuses to bend our knees to incompetent and cruel rulers.

How long will tariffs take for the US to create good jobs?

This post is a response to a question posed in its complete format: “How long will it take for new companies to build in the US creating good jobs and bringing America back from foreign dependent markets after the tariffs take effect?”

There is no detangling from foreign suppliers in almost literally every market.

For instance, you may have a homegrown bakery that you want to grow into a nationwide franchise that employs several hundred, but can’t without relying on foreign markets for product ingredients, equipment, or supplies to allow your operation to grow.

International interdependence is how to streamline costs through the same economic principle of economies of scale that would solve the corrupt American healthcare scam.

For example, you may be able to source grain from American farmers, but there’s an upper limit to how much you could buy locally. That would create an upper limit on your franchise growth. You may not be able to source much or any of your yeast from local markets, and you’ll be stuck having to import it at exorbitant prices due to Trump’s tariffs.

As you retool your nation’s supply chains to meet the needs of thriving businesses, you would still have to rely on foreign markets until you’ve made the hard choices of pushing out some business activities to make way for the successful or chosen industries to grow. While your nation adjusts to rely on tea production, you would shut down coffee bean plantations to provide enough land to grow your tea.

In the long run, as the U.S. adjusts to an entirely different lifestyle, you would change your expectations for the luxuries you currently take for granted. You would lose some major industries to make way for others.

You would no longer have any Starbucks, or you’d have to pay $20.00 for a cup of coffee, which would dramatically reduce the availability of Starbucks in your nation. Instead of walking down the street for a cup of joe, you’d find yourself driving to another town.

The transitions implied by your question involve a radical reshaping of your economic landscape that will not be a smooth change into lifestyles you’ve grown used to. You must prepare yourself to experience a painfully jarring and volatile rush of disappointments and escalating costs that would guarantee you having to endure a decades-long depression while losing almost everything you now take for granted.

Assuming you can succeed in transitioning to a self-contained economy, your nation would more closely resemble North Korea than whatever it is today. You won’t live long enough to experience the “New America,” but your grandchildren might have fond memories of the last Ben and Jerry’s Ice Cream sold at an auction for $10,000.00.

It seems too many MAGAts are utterly oblivious to how badly they’ve been conned by a con artist who should be rotting behind bars like every other convicted felon.

It’s heartbreaking that you’ll have to suffer so incredibly intensely to take back your nation and return it to a stable state of interdependent membership in a global community. You can forget global leadership, though. That’s gone forever.

Why are counter tariffs a good idea?

This post is a response to a question posed in its complete format: “If tariffs make things more expensive for the other party, why is putting counter tariffs a good idea?”

Let’s first begin by dropping the notion that throwing counter-punches is a “good thing.”

A vast difference exists between a “good thing” and a “necessary thing.”

“Good things” result in mutual progress and shared benefit of growth.

A “necessary thing” is a strategy for mitigating loss and facilitating the reversal of destruction.

Punching someone back after they have punched you isn’t a “good thing,” but a “necessary thing” because they will continue to beat on you until you can do nothing but submit like a broken animal to their assaults until they decide to stop or until you’re dead.

Tariffs are often used in negotiations to achieve balanced results between two parties.

Tariffs can be a means of securing a stable trade relationship.

Tariffs can also be used punitively to attack a negotiating partner, precisely how bullies like Trump approach their negotiations. He championed this strategy of overwhelming negotiating partners with force in his “Art of the Deal” piece of provocative garbage. Bullying is his life pattern.

Trump has always been a bully and his behaviours have destroyed people’s lives.

The only way to deal with a bully that tries to overpower you is to debilitate them.

This approach is precisely how Putin has resolved his conflicts. He has never stopped at just pushing someone back. He has always taken his conflicts to an extreme resolution to eliminate any shred of threat as a message to anyone else who might threaten him. None of his political opponents were beaten to live their lives in a reclusive or marginalized state. They were all murdered to ensure they could no longer pose a threat against him.

Being assaulted by someone like Trump with a long history of behaving in a consistently bullying manner and whose commitments aren’t worth the paper they’re printed on — and who is backed by a psychopath like Putin whose goal is the total eradication of resistance means the necessary option of overpowering Trump and his strategy to such a degree that he is beaten to the ground like a rabid dog is a survival necessity.

Until he has been so broken and defanged that he can do nothing more than gum his way through future assaults, he will always be an existential threat to human civilization. Preventing him from throwing punches isn’t enough. He must have every single weapon of his broken beyond repair so that he lives in a state of total impotence like the swamp slug he is.

This is not a “good thing” by any stretch of the imagination. This is a horrifyingly “necessary thing,” if we want to see something resembling sanity return to society that can allow some form of stability to emerge.