Tariffs, Treasuries, and Turncoats
Despite going to great lengths to keep politics out of my feed, blocking and muting related accounts and words, I still keep hearing about Musk and Trump and DOGE nonstop.
Since the latest obsession seems to be the pros and cons of Trump’s tariffs, and whether or not Elon and his ilk should have access to the US Treasury systems, and since I actually know a few things about this topic, I figured what the fuck, might as well poke the bear.
1. Are Tariffs a Good Idea?
Depends on what you’re actually trying to accomplish.
For starters, I don’t for one second believe the whole “punishing those who fail to block fentanyl” angle; that’s the “feel good” story wrapped around the real (very likely greedy) reason to make it more palatable to the gullible masses. Sure, we often claim to be using tariffs to punish countries, but really it’s just applying leverage for other reasons.
The question is, what IS the real reason?
I’m not psychic, so I don’t truly know, but I’m pretty good at spotting incentive stacks, so I’m willing to make a few educated guesses as to possibilities:
The US imports 20-25% of vehicles sold from Canada and Mexico, instantly making those vehicles 25% more expensive, which in turn devalues those auto makers, and makes Tesla vehicles (made in the USA) relatively cheaper and Tesla’s value go up. This could easily be a direct gift to Elon, who more than likely has a pile of Tesla shares (or offshore accounts) set aside for Trump.
The US can weather tariffs from countries like Canada and Mexico FAR longer than they can weather our tariffs. Tariffs are often just a bullying tactic to secure concessions. For example, the US gets the bulk of its lumber from Canada, and lumber prices directly impact housing prices…maybe Trump wants a better deal on lumber imports? (But we’ve raised tariffs on lumber in the last few years, which actually drove an increase in US lumber production, so, maybe not.) Maybe it’s just an arbitrage play of some sort, buying the dip. ¯\_(ツ)_/¯
Speaking of bullying, in the business world it is not unusual to take steps to bully a competitor until they are the dumps, so you can acquire them during a fire sale…I buy the line that Trump wants to make Canada a part of the US, he’s been vocal about the 51st state. Seems pretty unlikely to ever happen, but when has that ever stopped Trump from trying some bullshit…
If you can get a manufactured widget from China for $5, and the same widget in the US costs $10 to make, and the quality is roughly equal, it makes more sense for the consumer to secure the cheaper item…but by doing this, you both pump money into that other country, while also becoming partially reliant on them. There is an argument to be made that, in order to become less reliant on foreign goods, and to reinvigorate our own domestic manufacturing, we need to forcibly adjust the incentive stack to make it economically necessary to reshore production. This is a sound argument, and long-term probably not a bad idea, but it’s the consumer who suffers most in this scenario.
That last point I think is the strongest argument, and China for example has been working HARD for quite a while to A. become less dependent on other countries, and B. to make more countries dependent on them.
And yes, our desire for cheap goods has in large part funded the rise of China as a superpower. We made them strong, and made ourselves weaker in the process.
Sort of.
The thing is, when goods are more expensive, people tend to buy less, and less often. Our own GDP would likely not have grown as quickly if we didn’t take advantage of geo-arbitrage in the way we have, so really it’s a double-edged sword.
So, whether or not these particular tariffs are a “good” idea very much depends on the real reasons underlying them, and the stated reason is clearly bullshit.
But no matter how you slice it, at the very least these tariffs are NOT good for the people short-term.
The real problem is that the very idea of a “free market” is a farce. The government has their thumb on the scales in SOOO many ways it isn’t funny: tariffs, interest rates, subsidies, regulations, tax codes, licensing requirements, bailouts, government contracts, monetary policy, zoning laws, lobbying influence, patent and IP laws, price controls, trade agreements, capital controls, state-owned enterprises, corporate welfare, financial regulations, agricultural quotas, and hidden inflation metrics to name a few 🤦♂️
While making the gov more efficient in terms of money in/money out is needed, there are MANY other levers that would be easier, and likely more impactful, to pull.
Will this help inflation? Again, likely not short-term, but it’s possible.
2. Should Elon and Ilk Have Treasury Access?
Ehhh.
While I detest Elon as a person, I do have to give him credit as a systems engineer. He absolutely knows how to enter an inefficient industry, and make it vastly more efficient. The dude knows systems.
If Elon and DOGE were playing the role of a turnaround CEO, called in to fix up a company in the dumps, one of the first orders of business would be to go over the books (financials) with a fine-toothed comb. Examine all inputs and outputs.
So, from the perspective that you can’t fix leaks you don’t know about, then yes, access to the US Treasury seems necessary to find all the ways in which the US is wasting money.
BUT, a country is not a company, and certainly not a for profit company.
The US in particular is vastly, by many orders of magnitude, more complicated than a company. The scope of this project is far, far beyond Elon’s capabilities. And the youngsters he’s getting involved in the steaming pile of DOGE shit don’t remotely have the knowledge and experience to properly debug and reengineer a system this complicated.
That said, I *really* hope I’m wrong. The USG is a clusterfuck of epic proportions, with SO many grifters and leeches draining it dry.
Add to that that, between the military, and federal/state/local governments, that’s 20-25% of the employed people in this country. That’s not a small thing, and that really shouldn’t be the case.
There IS vast room for improved efficiency here, so I really do hope they pull it off.
But I doubt it. I think they’re more likely to just break the system, because they don’t understand it, don’t understand the people within it, because it works very differently than a startup does, and because they don’t actually have the same level of control a CEO does.
And again, this likely isn’t the most critical lever to pull.
3. Turncoats
Last but not least, I’m surely not the only one who has noticed a flood of elites bending the knee to Trump and Musk and their motley crew of shit heels. While I can understand the incentives underlying those decisions, I can’t forgive or condone them. The worst sort of people are those whose scruples shift with the tide.
Fucking greedy cowards.
Neither Trump nor Musk are acting for the good of humanity. They are acting for their own benefit only. This has been obvious for a long time (though longer for Trump than Musk). The right thing to do is to stand up to them, call them on their bullshit, and not lick their assholes because you think it’s in your best interest.
I don’t care if you’re a king, a president, a billionaire, or a celebrity. If you’re a fuckwit or a douche, I’ll call you a fuckwit or a douche both to your face and behind your back.
Fuck those people.
I am, and will ever be, a heretic. I’ll call bullshit when I see it. I’ll tell you to fuck off if I think it’s warranted. I just don’t give a single solitary flying flappy fuck about hierarchy or status.
If it bites me in the ass, meh.
🖕🖕
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