September 7, 2019
According to the great military thinker, Maj. Gen. J.F.C. Fuller, ‘the object of war is not victory. It is to achieve political goals.’
Too bad President Donald Trump does not read books. He has started economic wars against China, Russia, Iran, Cuba and Venezuela without any clear strategic objective beyond inflating his ego as the world’s premier warlord and punishing them for disobedience.
Trump’s wars are economic. They deploy the huge economic and financial might of the United States to steamroll other nations that fail to comply with orders from Washington. Washington’s motto is ‘obey me or else!’ Economic wars are not bloodless. Imperial Germany and the Central Powers were starved into surrender in 1918 by a crushing British naval blockade.
Trade sanctions are not making America great, as Trump claims. They are making America detested around the globe as a crude bully. Trump’s efforts to undermine the European Union and intimidate Canada add to this ugly, brutal image.
Worse, Trump’s tariff war against China has damaged the economy of both nations, the world’s leading economic powers, and raised tensions in Asia. The world is facing recession in large part due to Trump’s ill-advised wars. All to prove Trump’s power and glory.
Trump and his advisors are right about China’s often questionable trade practices. I did 15 years of business in China and saw a kaleidoscope of chicanery, double-dealing, and corruption. A favorite Chinese trick was to leave imports baking in the sun on the docks, or long delaying them by ‘losing’ paperwork.
I saw every kind of craziness in the Wild East Chinese market. But remember that it’s a ‘new’ market in which western-style capitalism is only one generation old. Besides, China learned many of its fishy trade practices from France, that mother of mercantilism.
China indeed steals technical and military information on a mass scale. But so does the US, whose spy agencies suck up information across the world. America’s claims to be a victim are pretty rich.
What Trump & Co don’t understand is that China was allowed into America’s Greater Asia Co-Prosperity Sphere by the clever President Nixon to bring it under US influence – just as Japan and South Korea were in the 1950’s. China’s trade surplus with the US is its dividend for playing by Washington’s rules. If China’s trade bonus is stripped away, so will China’s half-hearted acceptance of US policies. Military tensions will rise sharply.
In China’s view, the US is repeating what Great Britain did in the 19th century by declaring war to force opium grown in British-ruled Burma onto China’s increasingly addicted people. Today the trade crop is soya beans and wretched pigs.
Trump’s ultimate objective, as China clearly knows, is to whip up a world crisis over trade, then dramatically end it – of course, before next year’s elections. Trump has become a master dictator of US financial markets, rising or lowering them by surprise tweets. No president should ever have such power, but Trump has seized it.
There is no telling how much money his minions have made in short or long selling on the stock market thanks to insider information. America’s trillion dollar markets have come to depend on how Trump feels when he wakes up in the morning and watches Fox news, the Mother of Misinformation.
It staggers the imagination to believe that Trump and his minions actually believe that they can intimidate China into bending the knee. China withstood mass devastation and at least 14 million deaths in World War II in order to fight off Japanese domination. Does the White House really think Beijing will cave in over soya beans and semi-conductors in a daft war directed by a former beauty contest and casino operator? China’s new emperor, Xi Jinping, is highly unlikely to lose face in a trade war with the US. Dictators cannot afford to retreat. Xi can wait it out until more balanced minds again occupy the White House.
Trade wars rarely produce any benefits for either side. They are the equivalent of sending tens of thousands of soldiers to be mowed down by machine guns on the blood-soaked Somme battlefield in WWI. Glory for the stupid generals; death and misery for the common soldiers
This fool’s war of big egos will inevitably end in a face-saving compromise between Washington and Beijing. Get on with it.
Copyright Eric S. Margolis 2019
I highly doubt if the Chinese administration is in any way interested in dealing with the Trump administration any time soon…
Simple Accounting Explains the Trade Deficit
American ownership over the world’s international reserve currency means that every other country NEEDS US dollars. There are only two ways for foreign countries to get hold of US dollars:
1. trade goods and/or services
2. borrow US dollars
Not surprisingly, most countries prefer to trade for US dollars. But for every trade surplus, there is an equal and opposite trade deficit.
TAKE HOME MESSAGE: American CANNOT have both the world’s international reserve currency AND have a trade surplus.
There is a good article from the St. Louis Fed on this.
Understanding the Roots of the U.S. Trade Deficit (October 9, 2018)
https://www.stlouisfed.org/publications/regional-economist/third-quarter-2018/understanding-roots-trade-deficit
What you should write about is how heavily the CIA is involved in the American staged protests in Hong Kong.
At long last Eric and i disagree. Bringing manufacturing back into the US and other developed countries is a very good and necessary thing. Real wages are going up regardless of the impacts on “the economy”.
Commercial globalism has been a disaster for the middle class of the west with many of our most productive and highest paying jobs shipped overseas. Many communities withered and municipal tax bases eroded. Families and lives were wrecked.
Environmentally, globalism is powered by Chinese coal and the lower environmental standards of the Far East have led to higher ghg emission levels and massive injections of plastic into the oceans.
So give Trump his due. He said he’d raise wage rate and bring back manufacturing and he has done so. For him though, any environmental benefits will be strictly collateral benefits.
Commercial globalism and its race to the bottom is dead – long live cooperative development!
“Real wages are going up regardless of the impacts on “the economy”.
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Commercial globalism has been a disaster for the middle class”
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I would disagree with your first statement… real wages have been decreasing for decades. You can work at 2 or 3 jobs and still not afford a house or education. The population is largely underemployed.
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For the second statement, you should have included the lower class, too.
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Dik
“Real wages are going up regardless of the impacts on “the economy”.
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Commercial globalism has been a disaster for the middle class”
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I would disagree with your first statement… real wages have been decreasing for decades. You can work at 2 or 3 jobs and still not afford a house or education. The population is largely underemployed.
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For the second statement, you should have included the lower class, too.
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“Environmentally, globalism is powered by Chinese coal and the lower environmental standards of the Far East have led to higher ghg emission levels and massive injections of plastic into the oceans.”
I don’t think that Chinese coal and lower environmental standards are the issue. Globalism is driven by boardrooms looking for maximum profits at any costs… it goes far beyond the Chinese. They are struggling with pollution, on a real life threatening level, but they are addressing the issue. This is unlike the Americans who are unraveling any of the environmental improvements put in place by prior presidents. The Chinese are doing massive investments in wind and solar energy. They are actively promoting and government subsidising electric automobiles. Unlike the US. If you look at GHG’s on a ‘per capita’ basis there’s a whole different story. Other than some small Middle East countries, the US is #1 by a large margin. China is #7 and India is #13, and China is trying to fix the problem. For climate change, the US is putting the rest of the world at risk.
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Dik
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Dik
To clarify my point, yes, real wages stagnated for decades but they have gone up since Trump started cutting back on trade. So boosting tariffs has been good for the American worker and health of “the economy” can fall where it may.
If it weren’t for cheap energy, China would not have been able to launch its industrial sector. Ditto England and the industrial revolution and Germany a little later on. Coal also underwrote the early industrial development of the USA and oil further extended this run. The USA had abundant oil early on whereas the other three did not.
China is a world leader in renewables but it is highly unlikely they will be able to maintain their industrial output beyond the life of their coal reserves ~35 years.
Not according to the numbers… you still have a huge underemployment problem, and, it’s not improving. The real heartburn caused by Trump will not be felt until January or February, just after the Christmas rush.
Dik
A few thoughts…
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Trump has the potential to bring about a world recession/depression depending on how bad it can get. This has the added potential of plunging the world into World War III. Food shortages and drought, caused by climate change, will help bring this about.
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Trump has delayed many of the tariffs to mid December so the impact will not be felt during the Christmas season. Many businesses ‘fold’ early in the New Year, after their annual peak sales at Christmas time. It will be interesting to see how this plays out.
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It was a crippling embargo that precipitated the Japanese attack at Pearl Harbor. This, ultimately, led to Hiroshima and Nagasaki. Embargoes are one of the tools of the American government business model. The world has not learned the lessons. It’s difficult to ‘put a bell’ on the bully.
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I used to be a strong advocate of the American 2nd Amendment. With the actions of Trump and McConnell, it’s pretty clear that it’s not worth the paper to print it on. It has allowed the rise of the GOP to function in a very non-democratic manner; they are not doing their job and the American government has failed. I’m pretty sure the framers of the Constitution are ‘rolling in their graves’. Time to ‘scrap’ the 2nd Amendment and start working on a means of stopping the mass shootings.
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Dik
‘This fool’s war of big egos will inevitably end in a face-saving compromise between Washington and Beijing.’
I agree with much of what Eric Margolis says, but unfortunately I do not share his optimism about compromise. The pattern of history suggests it is very unlikely war between the US and China can be avoided. And it will be world war.
https://www.ghostsofhistory.wordpress.com/
Dear Sir:
This comes from one of your most dedicated supporters. I remember your article of May 2016 welcoming Trump overturning a corrupt Republican Party.
He did overthrow, all right. He systematically overthrew most government department heads in order to install cronies who hated that department, or saw profit in it.
I wondered, and wrote a comment, in those days, that more attention to the positive, hopeful message of Bernie Sanders might be worthy of your presentation.
Three years later, America is lead by a fascist. Just see the poster in the Holocaust Museum for the signs.
The kind, avuncular society that this kid admired back in the Norman Rockwell era is long overshadowed by meanness.
Two candidates are trying to restore kindness and civility with genuine messages of hope for America’s downtrodden and its neighbours.
It would be wonderful of more writers took up the cause of explaining the folly of climate denial, and endless wars in favour of the wisdom of the plans, both foreign and international of Sanders and Warren.
There is hope.
Let it spread.
Trump has changed the expression, ‘the ugly American’, to ‘the ugly America.’
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Dik