The Tariff Trap
When economists first started talking about Trump’s decision to impose tariffs on international trade, most said it was ill-advised. If his intention was really about creating more wealth domestically, then yes – this was an absurdly stupid decision. However, Trump’s intentions have little to do with helping Americans. This tariff trap is designed to instigate WWIII.
How do I know this? Because it has been done before.
What we don’t learn about the world wars in our American History classes is that they had less to do with spreading democracy and more to do with gaining economic supremacy.
In my post “Keynesian Economics”, I mention what led to the stock market crash of 1929. Short selling played a key role. What I’ve discovered upon further research is how orchestrated the whole affair was and who benefitted financially.
A handful of investors made a fortune off of the 1929 stock market crash, thanks to the short sell. Joseph Kennedy, Percy Rockefeller and William Danforth are names that most of us will recognize. What is most concerning are the two moguls who flourished financially during those early years of the Great Depression, when the majority of Americans were suffering. Walter Chrysler, founder of the Chrysler Corporation, and William Boeing, founder of the Pacific Airplane Company.
Though their fame nowadays is attributed to their contributions to the automotive and airline industries, they both played a major role in the supplying of military equipment (including weapons, tanks and planes, of course) used in WWII.
One of the main reasons why WWII really happened is not something that gets discussed much, if at all. After the 1929 crash, the Smoot-Hawley Tariff Act was introduced in 1930, signed into law by president Herbert Hoover. The act raised US tariffs on over 20,000 imported goods. While this played a major role in worsening the Depression in the U.S., it also caused severe economic instability globally.
This was designed to bring the world economy to its knees and make another major world war inevitable. The United States had gained its superpower status because of WWI, and only because of WWI. Masterminding the next world war wouldn’t be so difficult if the blame for the ailing U.S. economy could be placed on the international markets.
Prior to the Smoot-Hawley Tariff Act getting signed into law, a petition was signed by over 1000 U.S. economists to urge President Hoover to veto the legislation, calling it “an economic stupidity”. Even Hoover objected to it initially. He was forced to relent because the motivation was actually to force the U.S. GDP into a major decline. It was a tactic that ensured short term suffering for the potential of long term gains.
The Smoot-Hawley Tariff Act was incitement, pure and simple. It pummeled an already economically fragile Germany, who was still reeling from WWI debts owed to the U.S. and from The Treaty of Versailles.
What the U.S. demanded from Germany caused their banks to fail and unemployment to rise, paving the way for Nazism to get its foothold. That’s not the story we are told in school. The story we were told over and over again was that the U.S. saved the world from Nazism.
What doesn’t get told is that the Nazis were directly influenced by America’s racist Jim Crow laws. The U.S. had taught the world the ways of genocide. It was not only the enslavement of African people in America, but also the large-scale slaughter of North American indigenous peoples.
We have to look deeply into this moral argument. For example, when Henry Kissinger commanded the bombing of Cambodia in the 1970s, the Khmer Rouge regime was a reactive response, which was a Cambodian-led Communist takeover that murdered millions of their own people. Of course the Khmer Rouge were the ones with blood on their hands, but so was the United States. Isn’t that obvious? A simple example would be like someone throwing a full beer can into a crowd of people. A riot ensues and several people end up dead. Is this not involuntary manslaughter?
Trump’s entire presidential campaign about making America great again had little to do with actually bringing back manufacturing jobs, or resurrecting the middle class for that matter. If what he intends to do were to miraculously succeed (which it won’t), then the dollar would remain the reserve currency. There would be no manufacturing jobs returning to America. We are beyond the point of returning to the 1950s because the world has irrevocably changed. China has become the economic superpower because it has proven its economic prowess. That’s not at all debatable. China does not use war and sanctions to strong arm other countries into economic submission, like the U.S. has done for the past 100 years.
Of course the U.S. didn’t invent this strategy. However, it is not a tactic that ensures longevity or international popularity. I don’t think the United States will cease to exist in the next decade. It will still be here, but greatly modified.
One of the reasons for the strength of China’s workforce is the health of its people. Americans, by and large, are the unhealthiest people in the world, suffering from major health problems. That has certainly not helped the labor force. The jobs that are supposedly being taken by immigrants are jobs that most Americans are not physically equipped to do.
Trump’s tariff ploy will push the United States into a very deep recession. He will be the one to blame – remember this when war begins to escalate. President Hoover will always be remembered for his failure to resurrect the U.S. economy, and for his poor handling of the 1929 crash. No one remembers his moral quandary – only his failure.