Trump II, the digital Caligula's pursuit of third world economic strategies is having an impact. Bloomberg headlines show concerns of economic breakage.
Pablum (my recent nickname for Trump) became a fan of tariffs in the late 70's and early 80's when Japanese cars were cheaper and of higher quality. Trump thought import taxes would be a way to protect U.S. car makers from "unfair competition."
Those of us who lived through that period were grateful to buy gas efficient, well made and affordable Hondas or Toyotas. Their high quality came from the teachings of an American, Dr. W. Edwards Deming. He helped Japanese industry rebuild after World War II. He taught a comprehensive system of management based on "profound knowledge." His quotes include:
"Management of a system therefore requires knowledge of the interrelationships between all the components within the system. And of the people that work in it."
"Learning is not compulsory; it’s voluntary. Improvement is not compulsory; it’s voluntary. But to survive, we must learn."
"Management is prediction."Trump's savage whims go against system thinking, learning and hinder prediction. That is why corporate CEOs have blown back mightily.
Trump's staff of "yes men" and "demure women" puckered up in their latest cabinet meeting. "Adulation is Job One" in Pablum's White House.
The Donarch wants to take us back to a time when management ignorance/arrogance was widespread and needed protection. Is he running a protection racket?
"Shakedown" may be his essential truth (very small "t").
Update: Warren Buffett denied endorsing Trump's tariffs. Blackstone's Jon Gray warned:
"fluctuating markets could expose the unintended consequences of counterparty risks and leverage in the financial system"
Sounds like spring 2008 when Carlyle Capital Corporation collapsed under the weight of heavy leverage and Bear Stearns imploded due to high leverage and lack of liquidity (when short term loans used to finance operations completely dried up).
Credit and lots of it is required for companies to build new high tech, automated factories in the U.S. Company stock is one possible funding source. Volatility hurts the predictability of equity to add manufacturing capacity.
When the big money boys no longer trust each other to honor their debts, things seize up. Are high tariffs the equivalent of an economic pussy grab? They are both shocking and appalling.
Update 4-12-25: Canadian Prime Minister Mark Carney noted:
“The system of global trade anchored on the United States … is over. The 80-year period when the United States embraced the mantle of global economic leadership … is over. While this is a tragedy, it is also the new reality.''Update 4-14-25: Trump's byzantine tariff plan/non-plan shocked the economic world into shambles, after which Trump said "I know what I'm doing" when he clearly does not. Even The Apprentice staff had to reverse engineer Donald's inaccurate decisions.
