The Usual Bloggish Throat-clearing Which Can Be Skipped if You Think You’re Busy
Not once in the past week have I so much as looked at my Age of Spectacle manuscript. I’m stuck still in the middle of Chapter 2 in my final on-screen review. Why have I slacked off?
Mainly because it’s springtime: Fleeting and so precious natural beauty demands attention as the incubator of the moments of radical awe we all need to be fully human (whether we know it or not); and the older I get the more fleeting it seems to be for reasons limned in last week’s parting poem. Much mowing and weeding and planting and mulching and designing new gardens (veg and flower) call on my time, too, and plague my arthritic knees and basal joints but, as Uncle Bill said—remember from last week?—the compensatory benefit of it lies in deploying his good counsel to “just keep moving.” I do. I try. Taking a break from the computer screen also aids my eyes and muscle tone, such as it has become.
Speaking of muscle tone, I also simply could no longer delay painting the white picket fence here at Antebedlam, our wondrous 1844 house on the hill. For that job one ideally needs a chunk of time that provides days warm enough to paint (60 degrees or higher) but before plants grow in so thickly near the fence that you can’t readily access the surfaces to paint properly. That window is now. Painting this fence is an on-going chore sure to take another week to complete, depending on the chimerical meteorological vicissitudes of the season.
In any event, progress may be cited. The fence is coming along. Seeds are obediently sprouting all over the place. Yes, we have rabbits…..but we also have foxes who come to drink from the fish pond, and hunt rabbits, too. We’ll be returning later to other kinds of benign balances.
before, after power-washing
after…..as of Wednesday
Besides paying homage to nature by truly engaging it—I like to garden and paint fences barefoot when I can—our daughter turned 40 last week and partying takes some time and energy.
Also attention arresting is the fact that our youngest granddaughter, now just past 14 months old, is not just pretty suddenly walking but running—if you call flinging-yourself-forward-before-stumbling-and-falling-because-you-don’t-yet-know-how-not-to a form of running. I like to think that Joni is just following Douglas Adams’s advice on how one learns eventually to fly unaided: Practice throwing yourself at the ground and missing. She does this at home, at our house, at her Aunt Hannah’s house, and also at Gallaudet’s Parent Infant Program (PIP), an ASL-only zone for the children…..Joni’s doesn't wear her CIs at PIP. PIP for the younger-than-two crowd meets only on Tuesdays and Thursdays, and I’ve attended many sessions: It helps me improve my pathetic ASL skills and, besides, I seek engagement in and with the deaf community, people from whom have learned so much over the past year. But it spends out more than half a day every time I do it.
And if all that were not enough, there is this TRP Friday essay to prepare each week. I don’t like to disappoint however many regular readers there are, particularly the ones who pitch dollars toward me who don’t really have to—it strikes me as a breech of trust to miss or skirt a week’s essay.
So working on The Age of Spectacle manuscript will just have to wait a while longer. As it does, older labors are from time to time yielding a harvest: Note this essay just out: “The civilization of the book and deep literacy” Electra, Issue 28 (Spring 2025) [Fundação EDP, Lisbon] (Portuguese version, “A civilização do livro e da literacia profundo”)
Actual Introduction to Post-January 20 AoS Chronicle, No. 9
I consistently told my undergraduate students, when I had such students, that at their stage of life and learning good questions were more important than true but often trivial or uncontexted answers. In weekly writing exercises on assigned readings I ordered students to attach three questions to the conclusion of their summaries, not pro forma questions, but questions a student really wished to have answered one way or another, sooner or later. I did that to juice the Q&A hour before my lecture, but also because I was taught long ago that any answer one felt confident about having recently learned that did not lead to a new and more probing question was an answer that wasn’t worth very much. That is why I thrilled to stumble upon this wonderful quotation years later from Pablo Picasso: “Computers are worthless: All they can do is give answers.” (Not that it makes me like him or his art all that much more….)
Genuine learning—and more importantly a cultivated disposition to learn—is a process, and so is verb-like; rote or distracted learning is usually just a pile-up of information, and so is more noun-like. The former can eventually lead a person to humility, insight, and even perhaps wisdom; the latter more often leads a person to arrogance, error, and headaches.
In that spirit, this essay—now that it is finally about to actually begin….this is how we weed out the dilettantes….—is designed to ask a series of questions about recent events in the Trump 2.0 era, now post-100 days old. The questions are designed to prod TRP readers to think beyond the speeding and hence necessary superficiality of the news cycle, which in times of accelerated experience like these we all have trouble coping with—if, that is, we have any internal standards of adequacy in such matters to uphold. Some questions ask you to dig down and look back, others to reach up and try to see forward. Many will reference points and quotations from The Age of Spectacle project; some will refer back to the first eight “Post-January 20 AoS Chronicle” essays. The point of them all is to thrust you out of any cognitive comfort zone you may have constructed for yourself in the past hundred or so days, because if you are in a comfort zone of any quality you shouldn’t be.
I intend an essay of several parts. Today’s will cover only the themes of abundance and tariffs. Next week and the week after we will move on to subsidiarity, paranoia, disingenuousness, and finally, some speculation on post-Constitutional extinction America. Because that is a distinct possibility, so better to start thinking about it now.
Abundance
The new book by Ezra Klein and Derek Thompson titled Abundance has gotten more attention in recent weeks than any new book in a long, long time. Frank Fukuyama wrote about and endorsed the basic arguments in an April 10 Persuasion essay called “An Abundance Reading List.” Frank’s short piece is useful for three reasons: It cites a lot of literature that illustrates the diversity of ways that well-intentioned but ultimately misguided constraints fashioned by left-liberals on implementing new growth and new ideas have reduced the material standard of living of average Americans; it suggests that a carefully drawn pro-growth agenda could be something Democrats could successfully ally and rally around, so to displace the politically disastrous image of the party, fair or not, as being mainly “woke”; and it cites an essay (of which Frank is a co-author) disputing the contention that democratic backsliding within the electorate has had nothing to do with the failure of liberals to deliver material goods.
My view too is that, yes, it does have something to do with it, but maybe not as much as some suppose. As we have argued in The Age of Spectacle project, the erosion of deep literacy affecting by now well over half the adult American population makes conceiving and caring about any topic expressible as an abstraction a very hard political sell. Democracy is just one of several important cases in point. Have the abundance whisperers really taken on this aspect of a full analysis of the problem? Doubtful.
I have not yet read the Abundance book, only about half a dozen longish reviews and assessments. Nevertheless, several questions arise in my head, settling basically into three sets.
First, I wonder if the list of left-liberal sins suggested by Fukuyama and some others is even near complete. Frank’s list, which does not claim inclusivity, includes first off NIMBYist “vetocracy,” an apt term of Fukuyama’s invention some years ago, meaning the spreading of standing so far that unit vetoes can easily kill otherwise beneficial infrastructure and other projects. This is sort of the opposite of the logic of collective action in a curious way; it’s not a case of a determined minority knowing what it wants and getting it, but rather a case of a much more diffuse group knowing what it doesn’t want repeatedly winning the day. One wonders what the late Mancur Olson would make of that.
How to account for vetocracy? Well, a separate but related problem has been the rise of public interest law, for that meme has been a way to spread standing. Yet another is excessively brittle zoning ordinances, and here several hoary forms of petty—and I do mean petty—real estate fascism come into play. And still another concerns building codes so ornate and unreasonable that they suggest a keep-out ploy by large construction companies in league with government—that infamous local government-developers formula for payola corruption—to deny market entry to “wildcat” and starter construction companies. The point is that failing to get things done is not just a result of anti-growth environmentalism, and too stringent applications of the precautionary principle. Plenty of other things are going on, too, that have little to do with left-liberal doxies and other faith-based tics. A good stab at describing the whole picture is Peter H. Schuck’s 2014 Princeton University Press book Why Government Fails So Often: And How It Can Do Better. His Chapter 6, “Information, Inflexibility, Incredibility, and Mismanagement,” comes closest to the typological array of the abundance argument.
Frank then mentions what some have called procedural fetishism; obeying rules whether they make sense or not because bureaucracies need rules and narrower SOPs to function. Philip K. Howard’s abundant work has shown, among other things, how bureaucratic turf and budget-related ambitions lead to the irrational, anti-common sense writing of regs and rules that raise costs and cause delays is relevant here. (Frank doesn’t mention it.) Also related, and also not mentioned, is that the sheer scale of processes that get entwined in huge state and Federal bureaucracies inflict depredations that would not exist were a focus on subsidiarity to site decisions more locally, where they often belong. Here a good theoretical source would be Nicholas Georgescu-Roegen’s iconoclastic writing on the entropy theory of economics, way back in the early 1970s. He was very much concerned with the effects of scale on economic efficiency, and in that he had lots of variously oriented company—John von Neumann, David Landes, E.F. Schumacher, and others.
Also missing from Frank’s list—which, again, he doesn’t claim to be inclusive—and from most lists are several other equally or even more important factors: the wildly wasteful over-lawyering of nearly everything; the rentier extractions of large and even non-profit bureaucracies, which Scott Alexander has called “cost disease,” that affect costs for health care and education; artificial guild-like licensing barriers to semi-professional entry, for examples for barbers, hair stylists, manicurists, and many others, which Steve Teles examined a decade ago already in an important Fall 2015 National Affairs essay.
Several of these causes, or latter day exacerbations, of the abundance shortfall problem fall into my general The Age of Spectacle rubric I call the Net Effect: the tendency of digital technology to aggregate nearly everything into larger scales of operation that, while in some cases enabling greater efficiencies and lowering costs, usually does precisely the reverse by advantaging wealth—for only wealthy individuals and business partnerships can afford to deploy big data on their behalf to build and manage vast networks of discrete business exchanges. When huge scale surpasses the tipping point of ordinary corporate managerial control, it often generates unanticipated deleterious effects no one seems to know how to handle. The result is often a nasty combination of oligarchical behavior and all-but-designed employee helplessness. For one example, typical bank tellers these days can’t do hardly anything for customers without using “the system,” whose centralizing effects on management control costs for banks but usually leave both customers and underpaid service staff at sea.
I’ll see when I read the book if Klein and Thompson understand the autonomous role of the cyberlution in producing the generic problem they describe, which includes everything from enabling urban landlords using data analysis to collude to set rents about market levels to private equity investors being able to assemble market-niche oligopolies over, say, veterinary services that would be undoable without the data management capabilities afforded by cyber-information science.
So a lot of what Klein and Thompson have to say seems to be very not new, but it’s a good thing to have brought lots of different kinds of evidence together, even if not all of it, and to give it the prominence it deserves. That might make the problems and solutions for them more likely to become actionable politically. Lord knows a lot of very good ideas in academic and policy-oriented journals never make it to politicians’ and policymakers’ attention, for they seem to read less and less of anything serious with each passing year and month. Perhaps Klein and Thompson have found the magic timbre to get things done in the interest of getting things done, so to speak.
My second set of questions is about methodology and evidence. Have Klein and Thompson actually created and analyzed any relevant data? Books published these days by trade publishing houses like Simon & Schuster are usually pitched toward stories, not analysis as such. That’s what readers most like: stories. So that’s what publishers can sell. The evidence that story-based arguments produce is usually more anecdotal than data rich and, as every social science Ph.D. at least used to learn, anecdotes ain’t data. (I’m sure the morphology of this remark copies a famous quip by Fiorello LaGuardia: “Tickertape ain’t spaghetti.” Amusing maybe, but not important.)
No one should blame Klein and Thompson for using anecdotes in place of data, since imaging and generating data on a subject that is so typologically promiscuous as this one is notoriously difficult. Maybe it is even impossible for any practical purpose. I get it; after all, there is only so much hard data in The Age of Spectacle argument, for similar reasons. There is a fair bit of cognitive science in it, which I’d wager does not much grace Abundance. That may be a distinction with a difference. But still, just as process is policy—as noted in the April 11 TRP post—so methodology presupposes many a conclusion, for better and for worse.
My third set of questions is of a different nature. It is true that a wide range of different kinds of market distortions reduces abundance, and so reduces the standard of living that ordinary American might otherwise enjoy. But it is also true that greater material abundance is tantamount to human flourishing, to the deeper and genuine health of families and communities? Doubtful. Unprotected by the disciplines of moral reasoning and self-control—both virtues in general social arrears nowadays and on vivid political display where you’d most expect them to not be—greater abundance might just as well lead to greater decadence as lead to less inequality and wiser chosen lifestyles.
As many have noted over a very long time, affluence often creates ennui out of the vacuum of excessive leisure. Don Marquis was well ahead of his time, at least in an American context, when he wrote in the 1930s: “Fate often puts all the material for happiness and prosperity into a man’s hands just to see how miserable he can make himself with them.” So was John Steinbeck in 1952 when he dropped this sentence into East of Eden: “Maybe everyone is too rich. I have noticed that there is no dissatisfaction like that of the rich. Feed a man, clothe him, put him in a good house, and he will die of despair.” The point is that awareness of the negative consequences of unearned abundance, in particular, is not the least bit rare, yet somehow it nearly always seems to come as a surprise to the afflicted.[1] Do Klein and Thompson warn us about this downside possibility of unleashing greater abundance?
I hope so, because a conception of human flourishing defined by a materialist-only definition of abundance is to genuine flourishing what a Jackson Pollack painting is to genuine art. In a wider cultural milieu it would validate the faux-heroic realism expressed in a recent young adult film that “there are only molecules and empty space; all the rest is opinion” [the 2023 movie Popular Theory] and dismiss the far wiser view of Harvard University psychiatrist Dr. Barrie Sanford Greiff: “The world connects not by molecules. It connects through ideas, hopes, faces, dreams, action, stories, and memories.”
The materialist-heavy or -only form of analysis that seems to be on offer in Abundance reminds me a little of Cass Sunstein and Richard Thaler’s “nudge” thesis of a few years ago—2008, to be specific. The gist here was that a lot of perfectly normal ordinary people are unable to discern their own interests in the complex confusing swirl of modern life, and so need to be artificially incentivized from above through an architecture of clear rewards and punishments to get them to make genuinely self-interested decisions.
Never mind the obvious elitist tilt of the whole idea, as if a government—indeed, a large, bureaucratized Federal government like ours—can consistently do this sort of thing in a fair and non-ideological way. (Just to note, the whole idea of so-called hipster antitrust as a reorientation in law from the original understanding of antitrust has the same problem: how not to politicize, deliberately or not over time, decisions about who gets what, when, where, and how that rely on non-market mechanisms….but never mind that for now). Plato no doubt would have loved the nudge idea, but egalitarian-minded Jeffersonian democrats maybe not so much. The real issue here, however, is that the argument is utterly materialist, as if culture and subculture—not to mention sociological variables like family size and spatial array, whether people live alone or are divorced or are single parents, age-cohort influences, and so on—have nothing to do with people’s marketplace choices. (Some will recognize this question as bearing the ur-criticism that birthed the original neoconservatism in 1965 as a reaction against the Skinnerian positivist, operant-conditioning biases of the Great Society.) I wonder if the same criticism might apply, either a little or a lot, to Abundance? I guess I’ll eventually find out.
Tariffs
Speaking of getting a lot of attention, since April 2 much analysis has poured forth about “Liberation Day” in all its multitudinous and multifarious aspects. It’s a good thing by my reckoning that a basic lesson in trade economics has been sent far and wide, for not everyone who cares about Trump’s tariff adventures—which are not yet played out—took econ in college, or took it but can’t remember much of it, and so could stand to learn a little something about that from those who know the subject.
So by now everyone who can read should know that trade deficits are caused by many interlocking circumstances, and here are just eight in plain non-academic language.
First, wealthier consumers can buy more imports than poorer consumers, so Americans buy more stuff from foreigners than foreigners on the whole can afford to import from us.
Second, some of those “foreigners” sell us stuff made in factories owned by American corporations who have exported their capital to cheaper production platforms, so that it kind of is and kind of isn’t really foreign since profits from those sales may be repatriated to American citizens living actually right here in America.
Third, vice-versa in a way, a lot of stuff “made in America,” cars for example, use imported parts, so it’s not always as clear as pretended just who the casualties really are in trade wars.
Fourth, some stuff Americans buy can’t efficiently be produced here—coffee, for example.
Fifth, some stuff Americans buy as imports we buy because foreigners are sometimes better designers than American producers, so market choices are about quality as well as price.
Sixth, in normal life nearly all of us pay grocery stores more than they pay us, so it is likewise normal that we buy more stuff from some countries than they buy from us, but the places we work at pay us more for what we do than we pay them, and so we do also run surpluses with other countries—which simply means that not every bilateral exchange relationships needs to balance if the sum of those relationships is more or less in or close to balance.
Seventh, we can’t have no trade deficits and still have a capital accounts surplus at the same time when the U.S. dollar is the international reserve currency, and it is moronic to insist otherwise.
Eighth, relatedly, if our trade accounts are on the whole consistently in deficit it doesn’t much matter so long as the profits foreigners make return in the main to the U.S. economy in the form of capital investments and purchases of Treasury bonds. Being the holder of the global currency reserve brings lots of advantages, and these advantages far outweigh the reality than a lot of U.S. dollars will rest in foreign hands and accounts and so will always, pretty much, result in a net trade deficit. So what? Unless you have the brain of a petulant 9-year old.
None of this obvious stuff touches the more subtle fact that a lot of Americans, particularly sub-50% quintile earners, buy a lot of foreign junk, a lot of it made out of plastic, because psychologically it makes them feel more affluent even though they would be better off saving more and spending less on stuff they don’t need. This is a problem in my view—it’s definitely a problem that huge percentages of sub-50% quintile earners carry credit card debt from month to month, often paying off just the minimal balance because they are so far out financially over their skis. But it is a problem in the culture (and specifically with the warped incentives created by predatory, parasitic banking practices) that has only laterally to do with economics.
Getting Americans to stop buying junk is not wisely achieved by starting trade wars that hurt everyone, especially when the trade-warrior-in-chief can’t seem to make up his mind, such as it is, whether he’s trying to re-shore American manufacturing or negotiate down both tariff and non-tariff barriers to American exports. This matters if, for example, decision-makers actually want to effectively devalue the U.S. dollar: That’s one thing to do—as the Carter-Blumenthal team back in 1977 did to gain an edge over U.S. trading partners—if you want to help American exporters; but it’s something you don’t want to do if building up the U.S. manufacturing sector is the main goal, since, to put it simply, dollar devaluations always produce inflationary pressures that destabilize the investment climate.
As noted in April 11’s post, “Medium is Message, and Process is Policy,” I am partial to reinvigorating the U.S. manufacturing sector, and some of the reasons are given there and so need not be repeated here. But as noted there, to do this right takes time and improvements up the value-added chain in human capital as well as in adjusted human-scale production techniques, it should be based on a broader definition of human flourishing and not just narrow macroeconomic metrics, and it must accommodate a fair share and shake to organized trade unions if newly hewn capital-labor ratios in manufacturing are not to produce more rather than less social and status inequality that would render the entire effort unstable. As a sound goal that must be approached in a deliberate, patient, and fair-minded way, it might require doing things, like having something like a national industrial policy, that we as a nation have shied away from in the past. It might even, Lord help me, admit of some very limited and selected “nudging.” But left to the devices of Net Effect-inflected economic trends as we have seen them develop in recent years, the alternative spells more economic fragility, greater inequality, less social stability, and an unending political incapacity to cope no matter which major party is in office. It may also spell, hard as it is for most Americans to imagine, real declines in both productivity and standards of living not despite but because of technological innovations that degrade human capital.
Back to more contemporary matters, we have learned recently that other countries are not helpless in the face of U.S. threats to wage trade wars against them. One response last month of some countries, Canada as well as China and several others, was to dump U.S. Treasury notes, forcing bond market interest rates to rise. Why? Because we need incoming foreign capital to finance our budget—not just trade—deficits, and the way we typically attract that capital when the kitty is low is to pay more for it. If you’re the Chinese Central Bank, think what this means: You cash in bonds at X% interest and then use the dollars, or some of them in due course, to buy more bonds at X+n% interest, which means you end up with a more valuable position. Who wouldn’t do this if the opportunity presented itself? Or you dump Treasuries but very deliberately do not reinvest them in the same kind of paper; that puts pressure on and can essentially result in devaluing the dollar in ways U.S. authorities may not seek. That’s one consequence playing out now, it seems, as stocks and bonds move atypically in the same rather than in opposite directions.
The Chinese seem to be at that game for now for reasons of prestige and pride, but how defenestrating the U.S. dollar as the global reserve currency would help China is an open question. No country has benefitted more over the past four-plus decades from the U.S.-designed liberal trading order than China, and of course it would matter what alternative system would replace the present one. But no one really knows what that would look like and how it would actually work once all the major players got done poking, prodding, pushing, and pulling it.
For the time being, both sides of what has been the largest bilateral trade relationship in history are facing disaster, each trying to hurt the other without hurting itself even more. As of last week, as Jonathan Last reported at The Bulwark on April 28, only 17 vessels with 85,486 20-foot-equivalents (TEUs) of goods are scheduled to dock in Los Angeles, down 28.6 percent from the week before. This week that number has dropped to 16 vessels with 74,925 TEUs. Same story more or less in Seattle and Long Beach, meaning fewer longshoreman jobs and pressures against the unions, fewer truck routes to drive and fewer truckers needed. That means, too, supply-chain disruptions for both wholesale and retail commodities, selected shortages, and higher prices. China is not buying U.S. soybeans, pork, and other foodstuffs because their own retaliatory tariffs on U.S. imports make them price-prohibitive. Brilliant. In one of Gene Sheppard’s great comedy sketches—I forget which one at he moment—Ralphie’s mom adjures him to be careful with a new BB-gun he just got for Christmas, warning: “Be careful; you’ll shoot your eye out.” Ralphie shoots his eye out. I can’t help thinking of Ralphie and his mom when I think of the Chinese and the American governments engaged today in such childish nonsense. Of course, in their own minds they are deadly serious, but then that’s how children are, too.
Anyway, this is COVID-scale recessionary or worse. In the United States first quarter 2025 data now in show an absolute decline of 0.3%, nearly all of it caused during Trump’s one hundred days in office. Again Jonathan Last reporting two days ago: The contraction began only in mid-February, so “Trump caused enough damage in just six weeks to implode the entire quarter.” Now, barely five weeks into Q2, the numbers are even worse. If a recession is defined by two consecutive quarters of negative GDP growth—and it is—maybe we should start naming them like we do tropical storms: How does Recession Donnie sound to you? Pretty good, huh?
As for China, it had counted on exporting about $439 billion worth of goods to the United States in 2025. Now it won’t. Some of those goods may be salable elsewhere, though not necessarily at the same price points; some will cost the Chinese money as inventory. Planning investments and marketing for 2026 and beyond is now strewn with uncertainty. A serious recession in China could have dramatic social and political effects. If you’re trying to handicap which country will suffer more, and not just in narrow economic terms, well, you can’t. No one can. That includes what we’ll generously call the protagonists.
But back to the question so few seem willing or able to ask: So are trade deficits really important or not important as cases go largely as a function of budget deficits? Put a bit differently, if the Federal budget deficit year to year and the accumulated national debt were not as large as they are, would a net trade deficit matter much so long as the United States functions, in essence, as the world’s savings bank? I doubt it: So can we really separate trade issues from the fallout of a domestic budget process and circumstance that is the result of serial irresponsibility now for decades accumulated? I doubt it. So trade deficits are not entirely separable from budget deficits which are not separable from the status of the U.S. dollar and the role of the Treasury Department as a kind of global bank which affect how the bond market functions and can be used by others as leverage against us in crises and so on, and on, and on. What does this economic hokey-pokey dance mean?
Well, for one thing it means that, here again, the Trump 2.0 Administration’s instinct to deal decisively with the budget deficits and accumulated debt is not misplaced; but the methods chosen are little short of insane. Empowering Elon Musk to cut entire departments and programs, as if a hostile takeover of a business had just occurred and the drill is to strip the organization of all non-profitable parts, will accomplish almost nothing. The $1 trillion DOD budget Trump has lately crowed about will likely overwhelm any savings Musk has achieved, and of course efficiency has anyway never really been the point of his antics. And so we come to…….cutting taxes so as to reduce revenue—and the Federal government’s inherent ability to regulate and tax economic activity—is even crazier, as if supply-side economics ever really worked to scale. That will make the debt larger, not smaller. Crypto kings like Musk don’t care; indeed, if the dollar tanks their crypto hoards, they think, will make them instant trillionaires.
Let me come on like Chauncy Gardiner for a moment here. If you are not a cybergarch looter and you have a plum tree, say, and it has become overgrown and is not producing fruit efficiently, you would be wise to prune it carefully. You would remove selected rubbing and crossing branches to allow better airflow, excise all diseased-bark areas, reshape the crown to encourage lateral growth, spray it lightly with a sulfur-based insecticide to protect against curculio beetles, and so on. You would not douse the tree with kerosene and then light it afire….at least not if you actually cared about the tree.
Here is another question not often asked in recent weeks. Does it matter if trade deficits—in the U.S. case anyway—amount to a small percentage, a middling percentage, or a large percentage of the whole economy? The United States had, and still has, a huge domestic market compared even to most other large and wealthy democratic countries, including Germany and Japan. Those and many other countries are far more dependent on export earnings as a percentage of their whole economies than the United States has typically been. Yes, certain sectors of the U.S. economy are more export dependent than others, but the economy as a whole—though more dependent on trade than before since we’ve accustomed ourselves to a greater share of it in recent decades—is not comparably dependent on exports to the degree that most of our trading partners are.
In Cold War times U.S. policy acknowledged this reality and, in the interest of growth and both economic and political stability, willingly sacrificed some domestic production and imported more than we had to from allies—besides which growing wealth among U.S. allies and partners would result, we expected, in wealthier consumers who would eventually want to buy more American goods. Sacrificing a little temporarily in narrow domestic economic terms to gain compensatory strategic advantage overall made sense to most U.S. policymakers.
Does it still? Some of the legacies of that Cold war-era trading-partner unevenness persist, and since the end of the Cold War that unevenness has over time become more politically visible and hence salient. But it was not as if—before this past February anyway—NATO and other U.S. alliance arrangements no longer served any important purpose. Maybe U.S. officials should have pushed harder earlier to adjust to new circumstances; then maybe Trump would have a harder time persuading himself, or being persuaded, that we faced some kind of “national emergency” over what isn’t remotely a national emergency. (We’ll return to the paranoid style in American politics next week.) Michael B. Froman, now head of the Council on Foreign Relations but formerly Chief U.S. Trade Negotiator, is the right person to ask if one wants a learned and experienced reply. Certainly it is and has always been above my pay grade.
We should perhaps thank President Trump for goading us into learning all these basic—and a few maybe not-so-basic--lessons, and to asking some different sorts of questions, as well. What a useful twit he can be when he least intends it, huh?
[1] A recent on-point study was organized by Tulane University Professor Douglas Harris. For a brief summary see David Leonhardt, “Wealthy and Unhappy,” New York Times, February 4, 2025.