@LuFins-Dad said in Trumpenomics:
@Doctor-Phibes said in Trumpenomics:
@kluurs said in Trumpenomics:
[image: 1743745556439-2a94b6a5-a023-4d73-86a6-1ec577aca12b-image.png]
It's a Communist c0n5p1r4cy!
Communist? As in the government trying to control the means of production in a country? Sounds about right.
The actual effect of the tariffs will be to halt the American economic juggernaut, discredit the anti-woke movement, pave the way for a left-wing populist like Alexandria Ocasio-Cortez, stop the right’s momentum in other countries, and bring an end to Pax Americana, which is the masking tape holding the pieces of the world together.
MAGA Communism and the End of America
The right’s stupidity has reached a tipping point
Nathan Cofnas
April 4
Batya Ungar-Sargon is a self-identified Marxist who supports Trump because he is waging “class warfare” and “tell[ing] Wall Street to screw itself.” She looks forward to Trump’s tariffs taking us back to the 70s because:
“Back in the 70s...the majority of the GDP in America was in the middle class. That’s kind of like the golden era...when the economy was really healthy, and working-class people felt that they could afford a middle-class life. 25% of our economy was in manufacturing.”
The idea that the economy was better in ye olden days was a message of Oliver Anthony’s viral song from a couple years ago, “Rich Men North of Richmond.” According to Anthony, “your dollar ain’t shit and it’s taxed to no end.” He also complained (somewhat paradoxically) about “folks in the street [who] ain’t got nothin’ to eat” while “the obese [are] milkin’ welfare.”
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Two days ago, Trump’s tariffs came into effect. He called this “liberation day” because (as I understand it) he believes the tariffs will restore manufacturing in America and free us from the rest of the world that is “ripping us off.”
The actual effect of the tariffs will be to halt the American economic juggernaut, discredit the anti-woke movement, pave the way for a left-wing populist like Alexandria Ocasio-Cortez, stop the right’s momentum in other countries, and bring an end to Pax Americana, which is the masking tape holding the pieces of the world together.
Historically, the American right was better than the left on economics. But as the Republican Party degenerated into a low-IQ cult of personality, this was unsustainable. The benefits of free trade are counterintuitive, and require a certain degree of intelligence to understand. On average, people who believe in capitalism have higher IQs. If you chase all the smart people away from your movement, your economic policies will come to reflect the intuitions of below average people who think that trade is inherently exploitative and only workers who make physical objects add value. The base will demand that we return to a simpler time when Americans worked in factories, life was easier to understand, and we didn’t have so many vaccines.
Trump was elected largely because he was the anti-woke candidate. His executive orders on DEI were a cause for celebration. But the point of fighting DEI is to pave the way for something better—not merely to attack leftists for its own sake. If we destroy America and go back to living in caves, then we will have “won” the war on woke, but that’s not the kind of victory that we should aspire to. The goal is to bring about a better world.
Here I will explain how MAGA communism is based on lies and delusions, and everything is about to blow up in our faces. A reality-based movement needs to accept the following facts:
until Trump came back the American economy was better than ever
income inequality has not increased since the 1970s
taxes are paid mostly by the rich
people deny the aforementioned facts out of ignorance and/or for political gain
mob rule by ignoramuses is not an effective long-term strategy to fight wokism
American Is Rich
A hundred years ago, Charlie Chaplin made films where he plays an industrious hobo who frantically runs around looking for work so he can afford to buy a piece of bread. Many people are under the impression that millions of Charlie Chaplins are running around America unable to catch a break, but that there was a “golden age” in the 70s when the average factory worker could afford a house, family, and car on just his own income. In reality, there has been an explosion in wealth since the 1970s. The kind of poverty that existed in the 70s—not to mention Charlie Chaplin’s time—doesn’t exist anymore. If people feel poor, in most cases it’s because their desires have become inflated along with their standard of living. If you’re an able-bodied person and think you can’t afford to live the lifestyle of a Detroit autoworker in 1975, it’s because you don’t want to live like him, not because you can’t buy whatever he had and more.
There are a few methods to compare economic conditions across time. Consider GDP per capita.
GDP measures the sum of goods and services produced by an economy. It is equal to the sum of consumption spending (spending on new goods and services), business investment, government spending, and exports minus imports. (Imports are subtracted because GDP is a measure what is produced by an economy.) To measure the strength of the economy relative to population size, we can divide GDP by the number of people to get GDP per capita.
How do we compare GDP across time, say, in 1975 (the height of the supposed golden age) vs. 2024 (the end of Biden’s presidency when eggs became more expensive)? We could just run the calculation mentioned above. But, due to inflation, this would overestimate growth. Suppose the economy didn’t grow at all, but a dollar in 2024 was worth a tenth of what it was in 1975. GDP (or “nominal” GDP) will be ten times higher, although nothing important actually happened.
How do you control for inflation? You compare how much it cost to buy a basket of goods—e.g., an apple and a banana—in 1974 vs. 2024. Suppose an apple and banana cost 20¢ each in 1974 and $1 each in 2024. To adjust for inflation, you could multiply 1974 nominal GDP by 5 (to express it in 2024 dollars) or divide 2024 GDP by 5 (to express it in 1974 dollars). In practice, this can be misleading. Suppose there was a banana blight in 2022 that made the price of bananas jump to $2, so many banana eaters switched to buying pears for $1. Your formula says people have gotten poorer after adjusting for inflation, but they are still getting comparable fruits for what is effectively the same amount of money. If you compare the price of many goods, this should largely cancel out.
Real GDP per capita in 2017 dollars in the first quarter of 1975 and 2024 was, respectively, $27,690 and $67,981. That’s an increase of 146%.
This statistic, however, seriously underestimates how much the economy has improved since 1975, in part because it doesn’t account for differences in what you can buy. It’s not only iPhones, Wi-Fi, and temperature-controlled water kettles. Apples are bigger and juicier. Cars and airplanes are safer and cleaner. We have an unimaginable amount of choice, and almost anything we want can be delivered overnight. Most of that isn’t captured by comparing GDP.
When it comes to individual well-being, consumption is more relevant than GDP. For the past 50 years consumption has been going up in a straight line. In the first quarters of 1975 and 2024, real personal consumption expenditures per capita (in 2017 dollars) were, respectively, $4,820 and $9,951—an increase of more than twofold. This measures how much money people actually spend on goods and services, adjusted for inflation.
We can look at another metric: “time price.” Human Progress reports how many hours the typical blue-collar worker has to put in to earn enough to afford 75 finished goods ranging from a vacuum cleaner to gloves to jogging shoes in 1979 vs. 2019. (This doesn’t account for the fact that the amount of choice and quality of all these things is far superior today.) The time price of everything fell by an average of 72.3%. So if a typical blue-collar worker in 1979 had to work 1 hour to buy something, on average his counterpart in 2019 had to work 16 minutes 37 seconds. The only item whose time price increased was a gold necklace, which rose by 3.1%.
Source: Human Progress
Economic progress isn’t driven primarily by Charlie Chaplin screwing in bolts in an assembly line faster than before. It’s driven by technological progress and greater efficiency. Efficiency is a matter of the distribution of effort and resources. The Wall Street fat cats who extend credit, manage risk, and provide other financial services were instrumental in that. A philosophy of “tell[ing] Wall Street to screw itself” so Americans can return to factories is not going to lead to more wealth creation.
Across borders, people are more efficient at producing different kinds of goods. Countries with cheaper labor have an advantage in producing labor-intensive products like fabric. More educated countries can produce advanced technology like cell phones. Then they trade fabric for cell phones, and everyone gets something they want. Tariffs prevent free trade, which will reduce wealth.
Recently, a video came out of a man on the sidewalk in New York City eating a rat. The replies were full of people blaming the cameraman for not buying the man a hot meal, as if he had resorted to eating rats because there was no other food available. This shows how delusional some people are about the nature of poverty in the United States. I grew up in New York in the 90s and 2000s. High school students needed to do community service for their college applications, so there was an army of young people looking to do good deeds. Because everyone wanted to work in the soup kitchens, only kids from the most politically well-connected families were able to obtain one of these cushy spots. There simply weren’t enough poor people to meet the demand of the do-gooders. And America has become a lot richer since then. If the man eating a rat so desired, he could find rich college-bound high school students to give him a bath in soup whenever he wants. (That would make a great college application essay.) In reality, the homeless problem in America (not just New York) is almost entirely a problem of drugs and mental illness, which has little to do with the economy.
Rob Henderson was raised in foster homes, enlisted in the military at age 17, went to Yale on the GI Bill, got a Ph.D. from Cambridge, and became a successful writer. He tells an anecdote about his friend who worked part-time at Burgher King, and complained about not getting enough hours. One day they were at Applebee’s, and Henderson noticed a help wanted sign:
I told my friend to ask for an application. He replied in a mocking tone, “You ask for an application.” I got one and together we filled it out for him. He got hired. Then, when he was scheduled to start his first day on the job, he simply didn’t show up.
He quotes comedian Adam Carolla, who grew up in poverty: “Everyone I tried to help from my old neighborhood has told me to fuck myself.”
My point isn’t that the world is fair or some people don’t have real disadvantages. But if you show up on time and pass a drug test, you can get a decent-paying blue-collar job in the US. There are currently 6.8 million unemployed Americans and 8 million job openings. If you talk to anyone who hires blue-collar workers, they’ll tell you that the problem is getting people to show up. Even if your only concern were providing jobs, we don’t need manufacturing jobs when there are plenty of other opportunities right now.
Did the Greedy 1% Rake in All the Gains?
If Elon Musk spends a trillion dollars to build a pyramid for himself, this could increase GDP per capita without reflecting a significant increase in the condition of the median person. According to a popular view, GDP has gone up only because the rich got richer while leaving everyone else behind.
This is a false. The top 1% share of income after taxes, transfers, and benefits hasn’t changed since 1960. (See the bottom line of the graph below.) The myth that wealth inequality is exploding comes from studies of tax returns. But people at the bottom of the income scale are less likely to get married relative to 20 years ago, which means they file taxes separately—so average income per tax return goes down while household income does not. Also, more of their income is not taxable or picked up by tax returns relative to the past. When corrections are made, the result disappears.
Source: “Recent Research on Income Distribution”
Income is not the same as wealth, and therefore income inequality doesn’t always track (whatever we mean by) wealth inequality. Wealth is a much more slippery concept than income. You might think wealth is “whatever is in your bank account plus how much you could sell all your stuff for.” This formula sounds reasonable if you’re a student with a debit account and a footlocker full of books and clothes, but it doesn’t work so well when we apply it to more complex cases. Take a Harvard Law School graduate with $5,000 in the bank, $100,000 in student loans, and a $150,000/year job at a law firm in New York. Is his “wealth” negative $95,000? Every time the stock market goes up, Elizabeth Warren tweets that Elon Musk “made” X-billion dollars and he should pay a wealth tax on it. (She doesn’t say anything when the stock market goes down.) But Musk can’t actually sell his stock or it would crash. Taylor Swift could sell her underwear for tens of millions of dollars. Does that count toward her “wealth”?
This isn’t to say that wealth isn’t a real phenomenon (obviously it is, even if you can’t clearly define it). But it’s separate from income, and insofar as there is wealth inequality, this doesn’t say much about how the economy is distributing resources. After-transfers income inequality has not increased since the alleged “golden age.”
Poor People Don’t Pay Federal Income Taxes in America
Semi-employed Oliver Anthony complains about the dollar being “taxed to no end.” But he probably doesn’t pay a lot of taxes—at least not federal income taxes. The graph below shows the total percentage of income earned and federal income taxes paid by income bracket. Most taxes are paid by Americans earning more than $500,000/year. On average, people making less than $100,000 get money back.
Millionaires earn around 15% of the total income and pay 39% of federal income taxes. Their average tax rate is 3.5 times higher than it is for the rest of the population.
There is nothing for Oliver Anthony to worry about, unless he became a millionaire from the lucrative conservative grifting circuit.
Why Does No One Say This?
The myths that I just discussed are easily debunked. Why do they persist?
Our political system doesn’t incentivize people to acknowledge when things are okay. Everyone needs to present himself as the solution to a crisis. If a politician says that we just need to stay the course, he sounds like he doesn’t care about your problems, and he’ll lose to the guy who sounds more hysterical.
In 2022, there was an outbreak of bird flu, which caused an increase in the price of eggs. The US economy was doing well in other respects. Although covid triggered inflation across the world, the inflation rate was relatively low in America. Nevertheless, Trump got people to be fixated on the price of eggs, as if this represented some massive failure of Biden’s economic policies. For some reason the Democrats were unable to explain that eggs are not the be all and end all of the economy, and this may have contributed to their loss in the presidential race. (Trump promised to lower egg prices on day one of his presidency, which of course didn’t happen. You can’t make bird flu go away by talking tough to it.)
I know from personal experience that people get very angry if you point out that America isn’t the third-world hellhole that they want to believe it is. For example, in 2023, after I pointed out the absurdity of Oliver Anthony’s song, there was a mass pile-on by conservatives calling me an out-of-touch elitist for sharing facts. Political commentator Ryan Girdusky replied (in a tweet that was retweeted by Ann Coulter): “How dare the working-class feels screwed!!! Don’t they know how much worse it is in Uganda or back in 1870?” According to Girdusky and Ann Coulter, what matters is how conservatives feel, not objective reality. J. D. Vance responded: “Never mind that food prices have risen substantially over the last two years and life expectancy has dropped.” But even if covid caused inflation to rise and life expectancy went down, this doesn’t make Oliver Anthony’s false claims true. Vance would never admit this because there can be nothing good about America as long as his political opponent is in power. Then Mike Cernovich of “Pizzagate” fame went full communist and declared that “The vast majority of the rich don’t add value” and “your neck is 13 inches.” (This was followed by a totally non-gay discussion by hundreds of Trumpists about the details of my neck.) Most people in public life don’t want to face the mob, so they just go along with people’s delusions.
The Consequences of Stupidity
I have been sounding the alarm that the anti-woke right needs to appeal to elites. Mob-rule by morons is not going to be successful in the long run. We need to ask why most smart people lean woke, and come up with a message that can draw them away from the left. I have discussed elsewhere exactly how we can do this.
Trumpists think that wokism triumphed because it had power on its side. The way to defeat it is simply to take power for ourselves and smash everything that leftists have built. Curtis Yarvin says we just need a king who will impose his point of view on society. (Yarvin thinks the king should be J. D. Vance.) Christopher Rufo also calls for a power-first strategy.
I say that this is backwards. Wokism has power mainly because smart people were attracted to the ideology in the first place. Important institutions are staffed by cognitive elites, and, because they lean woke, the elites use their positions of influence to advocate for wokism. There’s a limit to how much you can accomplish via pure bullying. Yes, you can fire government bureaucrats and strongarm universities to axe their DEI staff, but you’re not going to change anyone’s views that way. You can’t build effective alternative institutions with a bunch of Twitter trolls.
The term “fascist” is used as a generic insult, but Trumpism has essentially become 1920s-style fascism. The original point of fascism was to combine nationalism with socialism under the leadership of an authoritarian state. Toward these ends, Mussolini ordered job-making public-works projects and nationalist economic policies. Although it wasn’t an explicit part of the ideology, fascism was also associated with thuggery, which is increasingly the MO of the Trump administration.
If Trump goes through with his tariffs and isolationism, this will have many effects, but probably not the one effect that he intends, namely, bringing back manufacturing jobs. Tariff policy has been changing on a weekly basis, and all of the tariffs could well be rescinded after Trump leaves office. No one is going to start building factories in the US when they don’t know what policies will be in place when the factory is ready to operate.
As for the negative effects: The tariffs have already crashed the stock market, and they will raise inflation. There is a high probability of stagflation (stagnation plus inflation). Trump’s economic warfare and nationalist rhetoric has discredited the MAGA movement in the eyes of the vast majority of non-Americans, thus weakening the MAGA-adjacent anti-woke right in other countries. For example, the conservatives in Canada were on track for an easy victory in the next election, but are now losing after Trump kept threatening to annex their country.
Trump’s impending failure may set the stage for a left-wing backlash. If the next president is a Democratic, he or she (I wouldn’t rule out AOC or someone like her) is going to use Trumpian means to undo what Trump did. This is one of the problems with Yarvin’s king idea. What happens when the other side’s king takes power?
The past few decades have been the era of Pax Americana. Uncle Sam runs around the world putting out fires, making everyone play nice, stamping out pandemics, and preventing less enlightened countries from bringing back slavery or biological warfare. Uncle Sam also presides over the rules-based order that makes cooperation and free-trade possible, and has enabled the “Long Peace.” America Firsters see us spending a small amount of money on other countries, and demand that we cut off the freeloaders. But the consequences of the collapse of the international system will penetrate the borders of America. Pandemics in Haiti can’t be kept out by a wall. If China decides to gobble up all of Asia—and maybe Africa, too—it will eventually pose a threat to us, even given the false assumption that America can achieve autarky. Trump’s plan to alienate our allies and abandon our historic role will create a poorer, more chaotic, and more dangerous world for everyone.
