Game on. Finally thing are getting interesing. I’ve got a couple of thoughts I want to jot down before I forget them.

1-It seems like Trump is following Putin’s mistake. Putin misjudged Ukraine, invaded, got tremendous unexpected opposition from the Ukranians, and had no exit ramp and no fall back strategy. Supposedly he made this mistake because he had been too long in an echo chamber filled with synchophants and yes men.

Trump has effectively broken the global trade system. Even if he reversed the tariffs, the structure is crack. Who the hell is going to invest a billion dolars in a new factory without some stablity in where you can sell your products? So Trump has no exit strategy either. Whatever happens to the economy now, he owns it and it’s hard to see how they patch it up. Trump has been nursing trade grievances for years and the yes men surrounding him apparently convinced him to go for it on tariffs.

He is caught in a peculiar bind, although he doesn’t seem to realize it yet. There is a zero percent chance that Trump was motivated by a desire to help working Americans. First of all, he has no history of that and second, if that were his interest he would have proceeded differently. That said, some of the people around him may have a sincere, even if misguided, desire to help working Americans and they are convinced, rightly or wrongly, that tariffs are the way to accomplish this. Trump seems motoivated mostly by a desire to demonstrate his power by making other people hurt but the tariffs, which are certainly going to hurt a lot of people, may ultimately be his undoing as the monied interests on Wall Street are already abandonning him. Strange irony.

2-When the stock market crashes it feels like the world is ending. By this I mean that when the market actually crashes, not a ten or twenty percent draw down, but an actual panic–which may yet come– it feels like the world is ending because that is actually what is happening. For a real stock market crash to take place, the old order has to quit working. The market goes down, then, after a certain amount of pain has been inflicted, rich powerful people pervail on the government authorities to intervene, and they do. When the interventions, whatever they are, from routine to original, fail, that’s when the crash actually happens. When the government tries to prop up the market and fails, that’s when you know that the old system is broken. Then you get capitulation. The bottom is only found when the actual investors, the value investors, start seeing a margin of safety around 50% even factoring in for the new uncertainty. It’s not a real crash unless the system looks like it might actual crumble.

So this time is peculiar because the system was intentionally broken.

3-We had an empire, and American empire, the United States. For the first thirty years of the empire, roughyl 1940 to 1970, the benefits of the empire were shared with the avewrage citizens, not equally, but broadly shared. Since 1970, the benefits of running an empire have gone to the people on top, so it is small wonder that the citizens eventually elected someone on his promise of breaking the empire and eliminating its costs in blood and money which, for the last forty years, have increasingly been paid by citizens who saw very little gain for their sacrifices. I wonder how this would have worked out if the fruits of running an empire had been more broadly shared?