A whole pile of invaluable trust just went up in smoke

A bit of tariff war news, then on to something else. After a rebound yesterday the stock markets dropped today. The nasty guy had hit China with tariffs of 125%, China responded to that so the nasty guy boosted tariffs on them again. I think they’re up to 145%. In today’s pundit roundup for Daily Kos Chitown Kev quoted Annie Lowrey of The Atlantic:

Step one: Start a pointless, globe-encompassing trade war, rationalized solely by your own boneheaded innumeracy. Step two: Tank the markets. Step three: Pare the war back to a hot conflict with one of the United States’ most important trading partners and a warm conflict with every other country on Earth. Step four: Watch the market rebound and declare victory. That’s the art of the deal, when it comes to President Donald Trump’s tariffs and trade policies. This afternoon, Trump announced that the U.S. will pause the imposition of its “Liberation Day” tariff rates for 90 days. The markets surged in response; the president’s supporters cheered. But there’s no victory here, whatever the Dow Jones does and the Trump administration claims. The White House has risked everything, ruined plenty, and gotten nothing. The country’s economy is weakening, and the possibility of a recession remains.

Thomas L. Friedman of The New York Times:

Trump won’t back off on these tariffs because — take your choice — he needs them to keep fentanyl from killing our kids, he needs them to raise revenue to pay for future tax cuts, and he needs them to pressure the world to buy more stuff from us. And he couldn’t care less what his rich pals on Wall Street say about their stock market losses. After creating havoc in the markets standing on these steadfast “principles” — undoubtedly prompting many Americans to sell low out of fear — Trump reversed much of it on Wednesday, announcing a 90-day pause on certain tariffs to most countries, excluding China. Message to the world — and to the Chinese: “I couldn’t take the heat.” If it were a book it would be called “The Art of the Squeal.” But don’t think for a second that all that’s been lost is money. A whole pile of invaluable trust just went up in smoke as well. In the last few weeks, we have told our closest friends in the world — countries that stood shoulder to shoulder with us after Sept. 11, in Iraq and in Afghanistan — that none of them were any different from China or Russia. They were all going to get tariffed under the same formula — no friends-and-family discounts allowed.

In the comments exlrrp posted a meme by Tristan Snell, former New York Assistant Attorney General:

Why did Trump just cave? Because when the U.S. borrows money it does so by selling Treasury bonds. Mostly to China, Japan, Europe. Overnight there was a sudden spike in holders dumping their bonds. Trump picked a fight with our creditors, and or creditors won!

In Wednesday’s roundup, this one by Greg Dworkin, quotes Matthew Yglesias of Slow Boring:

A distinguishing characteristic of the policy course Trump has set us on is that people in his orbit keep offering justifications for it that are not only distinct but mutually contradictory, and then getting peeved if critics don’t accept their account of the real strategy.

In the comments is a cartoon by Joe Heller. A couple are in a bar. Behind them the nasty guy is on TV and the caption says “Pain and uncertainty ahead.” The couple react as the bartender looks elsewhere.

Man: Sure, it’s going to be inconvenient and hard... But in the long run this sacrifice will benefit everyone! Woman: Oh, please! That argument couldn’t even get you to wear a mask five years ago!

LJ Slater posted a meme:

Help the penguins pay their tariff. Send your fish to 1600 Pennsylvania Ave.

In Tuesday’s roundup Kev quoted Paul Krugman writing for his own Substack:

But less-engaged voters weren’t the only people who missed the warning signs and supported Donald Trump. Trump also had a number of ultra-wealthy backers, both on Wall Street and in Silicon Valley, who are now shocked, shocked to discover that he is who he always was. [...] To be honest, I’m actually glad that Trump II is proving to be such a disaster for the economy. If he had exercised some restraint, if he had simply claimed credit for the very good economy Joe Biden left him, many wealthy people would have cheered him on while he destroyed democracy. Now they may turn on him.

Way down in the comments Flood Zone posted a comic showing Robert Kennedy Jr. at an exercise gym sitting backwards on an exercise bike. Geier (I don’t know who this is) stops to talk to him.

Geier: RFK JR, you know you’re riding the bike backwards, right? RFK: Yeah, Geier, (puff, puff) about to recommend people get the MMR vaccine. The bike: Your back pedaling is looking great, sir! Keep up the endurance for when the raw milk retraction comes up!

Paulpro posted a cartoon by Chelo showing the nasty guy and Melania ready to eat while the pot burns in the kitchen. Outside the window ICE is arresting the chef, server, and maid. Last Sunday the NPR show Freakonomics, hosted by Stephen Dubner, talked to Jessica Riedl. She is transgender but that has nothing to do with the topic of the episode. The topic is the political dishonesty about the national debt and taxes. The episode is dated April 4, 2025. However, there is a link to a Freakonomics podcast dated March 14, 2025, which has the transcript. I’ll get back to the broadcast episode later for some of the comments. Riedl is a senior fellow in budget, tax, and economic policy at the Manhattan Institute. She says she is center-right, though politicians of both parties don’t want to hear what she has to say. She recently stirred a hornets nest in a pair of op-eds in the Boston Globe, one titled “What Conservatives Get Wrong About Taxes” and the other “What Liberals…” She didn’t like Biden because he “added $4 trillion in new spending, enacted some tariffs, pushed up budget deficits, and overheated the economy to inflation.” She thinks less of the nasty guy because of his $8 trillion in new spending and tax cuts in the first term with likely much more in the second. She listens to the chatter around Washington and in social media and mutters that what she hears is just not true. So before the Globe articles she wrote Correcting the Top Ten Tax Myths. The myths (the transcript has the discussion to disprove them): 1. Tax cuts pay for themselves. 2. Tax cuts starve the beast and cut spending. 3. The middle class pays a higher tax rate than the rich. 4. The 91% tax rates of the 1950s produced all the revenue. 5. Europe taxes the rich more. 6. Tax cuts for the rich are why we have huge budget deficits. 7. Taxing the rich more can eliminate the deficit. 8. Most of the 2017 tax cuts went to the wealthy. Myths 9 and 10 to me look like duplicates. The national debt is now so high the interest paid on the debt has tripled since 2021, from $350 billion to nearly $1 trillion and will be up to $2 trillion in a decade. That cost has passed Medicaid, defense, and Medicare. Before 2000 a politician could talk about fiscal responsibility and get elected. Now politicians believe they can’t get elected without promising tax cuts and spending increases. They hope the consequences fall to their successor. DOGE is focused on symbolic things like DEI and culture war things. They say they’re doing it to save money, but that will be “not even a rounding error.” The national debt is “projected to rise from about $30 trillion today to $200 trillion in 30 years” (a link provided). Yet, politicians are locked into making promises that are bad for the country but get them elected. Changing that is not easy. I want to hear how that fiscal responsibility was sabotaged, but that’s beyond the scope of this article. Medicare and Social Security do not pay for themselves in taxes, and the belief they can’t run deficits is false. Riedl says the two will run a cash deficit of $124 trillion (another link provided). The rest of the budget is balanced during that time. Social Security is a pay-as-you-go system and there aren’t enough taxpayers to cover all the retirees. Seniors said they paid into the system and want their money, but overall they’re getting triple what they paid in. I get the impression that those who get more than they put in are the wealthy whose payroll taxes are capped much lower than the maximum benefit they get. And, as millionaires, why do they need Social Security at all? Yes, that is means-testing, which is now a toxic topic in Washington. But if benefits are to be cut isn’t it better to cut the benefits to the rich rather than to the poor? Social Security is supposed to be a poverty-prevention program, not a universal, get-rich benefit. But changing that would be electoral suicide, because the public doesn’t understand how the system works. This can be solved – as long as both parties are equally involved so it doesn’t look like a partisan effort to hurt opponents and the negotiations are done privately. But it has to be everything, not the budget, Social Security, and Medicare in isolation. Riedl says such meeting are happening, but she can’t give names. The participants are scared of going public. Riedl computed that if we seized the entire wealth of every American billionaire it would pay for eight months of government spending and do it only once. In contrast she says the middle class is undertaxed. I read through the comments of both the podcast and radio episode. Some of them say Riedl’s center-right viewpoint is showing and fact-checking should have been stronger. A couple commenters say that the money taken from the rich should not be compared to total government spending, but to the budget deficit – and that their wealth could cover that for a couple decades. Another calls her a “good capitalist propagandist.” In the comments for the radio episode Robert Bristow-Johnson has suggestions to make the tax system and federal budget more fair. Tax capital gains the same as earned income. Apply Social Security and Medicare taxes to all income, not just earned income. Prevent the rich from living off loans against their wealth (to be repaid when they die) by taxing the loan as income. Tax inherited estates over $1 million. Remove the limit of how much income is taxed for Social Security. Lower the maximum Social Security benefit to a comfortable middle class income and don’t bother means-testing. In exchange for these reforms, lower the taxes on Type C corporations (I don’t know the definition of this type). And give us single-payer health care. While listening to Riedl and her comments that billionaires are taxed enough and the middle class should be taxed more, I got to thinking about another aspect of taxes. Since the Reagan tax cuts in 1981: The number of billionaires has increased by quite a bit to the point they have enough money to significantly meddle in politics. The pay of the lower levels of workers has stagnated because the rich could keep the money for themselves rather than pay their workers more. Income inequality has increased tremendously. I think we would do better taxing the rich more, not because it would do much about the federal deficit, but because we would do better as a society with fewer billionaires and wealth more evenly distributed.