Great white hope of EU capital market plans is a bust, think tank says
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www.theatlantic.com › politics › archive › 2024 › 10 › trump-tariffs-economic-uncertainty › 680427
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Perhaps the most levelheaded defense of Donald Trump’s misguided plan for steep global tariffs is that they’ll never be imposed. Trump surrogates have lately been assuring the business world that the former president will, if elected, use merely the threat of across-the-board import taxes of 10 to 20 percent to pressure other countries to lower their own barriers to American goods. The result: freer trade among participating nations, and more revenue for American companies, without ever firing anything more than a warning shot.
Howard Lutnick, a billionaire co-chair of the Trump transition, recently made a version of this argument on CNBC, using the auto industry as an example. “If we said, ‘We’re going to tariff you the way you tariff us,’ do you think they’re going to allow Mercedes and all these Japanese companies and Porsches and BMWs to all of a sudden have 100 percent tariffs in America?” he said. “Of course not. They’re going to come and negotiate, and their tariffs are going to come down, and finally Ford and General Motors are going to be able to sell in these places.”
The idea that the White House can use import restrictions to affect foreign governments’ policies is not entirely without precedent. Research shows that from the 1970s through the early 1990s, various administrations sometimes succeeded in prying open foreign markets by threatening tariffs or other protectionist measures. A reasonable case can even be made that Trump’s 2019 promise to slap 10 percent tariffs on Mexican imports helped push our southern neighbor to cooperate more fully on restricting illegal immigration.
Trump’s new global tariff threat, however, would likely be far less successful, and would impose significant costs even if the tariffs were never applied. The “just a threat” strategy sounds nice in the abstract but in reality suffers from fatal flaws: It ignores not only America’s checkered history of such gambits but also the economic damage that threats alone can inflict on the American and global economies.
[David Frum: Trump’s plan to raise your taxes]
The occasional tariff-threat success stories are exceptions to a broader negative trend. In a comprehensive analysis of every U.S. unfair-trade investigation from 1975 to 1993—91 cases targeting foreign discrimination against U.S. goods, services, and intellectual property—Kimberly Ann Elliott and Thomas O. Bayard found that American efforts to pressure foreign countries to open up their markets were successful less than half of the time. The authors’ definition of “success” was generous to U.S. officials: It could include just the partial achievement of U.S. objectives and result in no actual trade liberalization. Even then, the wins occurred mostly when a single country was dependent on the U.S. market—a situation that applies to only a few countries today—and during a short period in the mid-1980s, when the U.S. had far more economic heft in global markets than it has now. (China in 1991, for example, shipped almost one-third of its exports to the United States; today, the number is about 15 percent.) When the U.S. government actually applied trade restrictions, moreover, the strategy worked only twice in 12 tries. In the other 10 cases, foreign governments did not acquiesce to American demands; despite new U.S. protectionism, they kept in place the policies and practices to which Washington objected.
Trump-era trade actions have encountered similar difficulties. No nation lowered its tariffs on U.S. goods in response to tariffs imposed, or merely threatened, during the Trump administration, and most of those U.S. tariffs remain in force today. Even worse, several foreign governments—in China, the European Union, India, Turkey, Canada, Mexico, and Russia—retaliated against U.S. exports, which in some cases remain depressed. Since then, Trump’s “Phase One” deal with Beijing, signed in early 2020 and hailed as proof that the tariffs were working, because China had agreed to buy American farm goods and open certain domestic markets, has fizzled out; China has largely failed to follow through. And, as the current U.S. Trade Representative Katherine Tai just confirmed, the China tariffs have not changed Chinese government policies or behavior.
Overall, a recent analysis of the Trump-era retaliation shows that “a one percentage point increase in foreign tariffs was associated with a 3.9 percent reduction in U.S. exports.” So Trump’s previous strategic tariff experiment resulted in less trade, not more, and America is still paying for it.
Just the threat of a tariff also can inflict considerable economic costs, because it increases uncertainty for business, which has been found to reduce U.S. investment, output, and hiring. An unpredictable policy environment gives private companies an incentive to stay out of the U.S. market until policy is clarified, resulting in a lower level of current economic activity overall. Numerous studies have confirmed these effects, but they’re really just common sense: Who would want to wager millions of dollars on a new U.S. facility that might soon face higher production costs, or be unable to sell products abroad, thanks to possible tariffs?
Various measures of what economists refer to as “trade policy uncertainty,” or TPU, spiked during Trump’s time in office as he routinely announced or teased radical changes to U.S. tariff policy on Twitter. According to one index, average TPU during the Trump administration was the highest recorded under any president since 1960, when the series began. A study in the Journal of Monetary Economics estimated that the increase in Trump-era uncertainty reduced aggregate U.S. investment by $23 to $47 billion in 2018 alone.
American trade law compounds this uncertainty by giving the president broad and ambiguous power to quickly impose new tariffs without congressional input or approval. As my Cato Institute colleague Clark Packard and I detail in a new paper, following the Smoot-Hawley tariff debacle of the 1930s—in which Congress dramatically increased U.S. protectionism and thereby set off a global trade war that deepened the Great Depression—the legislative branch delegated much of its constitutional trade authority to the executive. Congress assumed that the president, with national constituency and foreign-affairs responsibilities under Article II, was less likely to repeat Smoot-Hawley. This approach to U.S. trade policy making worked reasonably well for 80-plus years, but Trump (and, to a lesser degree, Joe Biden) exposed a key flaw: The laws at issue are so broad and ambiguous as to allow a president to unilaterally impose or maintain damaging tariffs on dubious grounds.
[Rogé Karma: Reaganomics is on its last legs]
Over the past seven years, moreover, U.S. courts have rejected every challenge to the Trump-era tariffs on steel, aluminum, and Chinese imports, and to the laws under which the tariffs were imposed. Judges have proved to be particularly deferential to the executive branch in cases alleged to involve “national security,” a term so broad and undefined that one Trump-administration lawyer famously refused to concede that it couldn’t apply to imported peanut butter.
Given this precedent, the next president will effectively have a green light to impose new tariffs—and dictate U.S. trade policy—with little concern that the other branches of government will stand in the way. Any such tariffs, as well as their size and scope, will thus come down to the whims of one person in the Oval Office, who might be Trump. Future courts might find global, across-the-board tariffs to be fundamentally different from past actions and thus beyond the bounds of whatever law was used to justify them, but that outcome is far from guaranteed. Until Congress changes the law, trade policy will be vulnerable to abuse and will therefore continue to thicken the fog surrounding trillions of dollars in annual U.S. trade.
That fog is, unfortunately, again building up as trade-policy uncertainty has climbed back to levels not seen since Trump’s time in office. His victory next week would likely boost uncertainty even more, with inevitable collateral damage to the U.S. investment climate and economy. Indeed, with reports of corporate angst and delayed investment already proliferating, the damage appears to have already begun.
www.theatlantic.com › ideas › archive › 2024 › 10 › youth-democracy-united-states-unique › 680344
The prevalence of positive illusions is one of the most well-established findings in psychology. Most people have an exaggerated view of their own abilities and expect that more good things—and fewer bad things—will happen to them than is likely.
Despite being unrealistic, such beliefs have benefits: Overly positive people are happier, cope better with adversity, and think they have more control over their life. Believing that things are a little better than they actually are may be necessary for robust mental health.
In a similar way, many citizens hold overly positive, but possibly necessary, beliefs about their country. A sense of national pride can foster community and bring people together, and it’s often a sign of a thriving democracy. In the United States, one source of patriotism is American exceptionalism—the idea that the U.S. is a unique, and uniquely superior, nation. With its origin as a democracy in a world of kingdoms and its emphasis on freedom and opportunity, this narrative goes, the American system is out of the ordinary.
Among the young, that belief is rapidly dying. Since 1976, a large nationally representative survey has asked U.S. high-school seniors, 17 and 18 years old, whether they agree that “Despite its many faults, our system of doing things is still the best in the world”: a fairly succinct summary of American exceptionalism. In the early 1980s, 67 percent of high-school seniors agreed that the U.S. system was the best. By 2022, only 27 percent did. Thus, only one out of four American teens now agrees that their country is exceptional.
[Read: 20-somethings are in trouble]
The decline appears to be mostly untethered to national events. Belief in American exceptionalism went down during the Great Recession of the late 2000s, and also during the economically prosperous years of the 2010s. It declined when the U.S. was at war and also when it was at peace. It declined as income inequality grew rapidly, from 1980 to 2000, and also as inequality moderated after 2000.
Support for the idea is now particularly unpopular among liberal teens. As recently as the late 1990s, a majority had agreed that the U.S. system was the best. By 2021–22, that had shrunk to 14 percent—only one out of seven. (Belief in American exceptionalism has declined among conservative teens as well, but much less so: 47 percent of conservative teens believed in the idea in 2021–22.)
Even the belief that the founding of the United States was a positive development seems to be on the way out: A recent poll conducted by the Democracy Fund asked Americans if the Founders are “better described as villains” or “as heroes.” Four out of 10 Gen Zers chose “villains,” compared with only one in 10 Boomers. If your country’s Founders are the bad guys instead of the good guys, it becomes much harder to believe that its system is the best in the world—or even worth defending. (Ideas about America are hardly the only beliefs that have bent toward pessimism among American youth in the past two decades. In early 2002, for instance, 23 percent of high-school seniors agreed with the statement “When I think about all the terrible things that have been happening, it is hard for me to hold out much hope for the world.” In early 2019, 40 percent agreed.)
Dour views of the nation’s status and possibilities may shape its future. Gen Z may be disillusioned, but it is not, by and large, nihilistic: Today’s young adults are also more interested in taking action than previous generations. From 2014 to 2021–22, an increasing number of high-school seniors agreed that protesting and voting could have “a major impact on how things are run in this country.” Voter turnout among young adults has been higher among Gen Z than previous generations at the same age, and political protests appear to have become more frequent in the eight or so years since Gen Z arrived on college campuses.
That, of course, could yield positive changes. One of the most important American ideals, arguably, is that the American project is unfinished, and that society can be made better, generation by generation. Throughout U.S. history, discontent and even righteous anger have often been important correctives to overly broad or unthinking sentiments about the country’s goodness, which, when unchallenged, can perpetuate injustices.
But many of Gen Z’s members seem convinced that radical change is necessary—to the model of government, to the economy, to the culture. In a 2020 poll I analyzed for my book Generations, three out of four American Gen Zers—more than any other generation—agreed that “significant changes” were needed to the government’s “fundamental design and structure.” Nearly two-thirds believed that America was not “a fair society,” again a higher rate than older adults. In a 2018 Gallup poll, more 18-to-29-year-olds had a positive view of socialism (51 percent) than of capitalism (45 percent). Some of the ideals, and idealism, that were commonly accepted in previous generations seem to have a looser hold over young adults today.
Why has Gen Z turned so definitively toward disillusionment and away from seeing their country as superior?
One reason may be their mental health: Twice as many teens and young adults are depressed than in the early 2010s. This is a tragedy—and it’s likely to have wide-reaching effects. Depression isn’t just about emotions; it’s also about cognition. By definition, depressed people see the world in a more negative light. They are less likely to see the positive, including in their country. Increases in depression are larger among liberals, consistent with the larger decline in their belief in American exceptionalism.
Changes in news consumption may also play a part. When newspapers were read on paper, all of the news—positive and negative—was printed together. Now negative news is king. Negative articles are almost twice as likely to be shared on social media as positive articles. Social-media algorithms push angry and divisive content. With Gen Z getting most of its information online, it is viewing the country through a negatively skewed funhouse mirror.
A third reason may lie in the shifts in high-school American-history curricula. Some—typically liberal—states now spend more time than they once did on the more deplorable facts of the nation’s history, such as the internment of Japanese Americans during World War II, the massacre of Native Americans, and the Founders’ ownership of slaves. That coverage lays out facts students need to know, but, especially if these events are emphasized more than the country’s more noble endeavors, it may also undermine feelings of national pride.
[Read: Are Gen Z men and women really drifting apart?]
Finally, Gen Z’s facility with social media may itself be coloring the generation’s views. Gen Z has learned that making a problem look as big and awful as possible is a highly effective way of getting traction on social media. Many problems are often portrayed as profound and systemic, fixable only by fundamental rethinks and institutional purges. It makes everything seem worse than it is.
My worry, as a social psychologist who has studied all of the living American generations, is that these various forces—and the pessimism they have generated —could move Gen Z to change systems that are not necessarily broken. That’s especially relevant as this generation comes of age and rises toward political power. Despite the common perception that the system is “rigged” and young people will never attain the wealth Boomers did, for instance, the Federal Reserve of St. Louis recently found that Millennial and Gen Z young adults actually have 25 percent more wealth than Boomers did at the same age. Inflation-adjusted median incomes for American young adults are at all-time highs, and poverty rates for children and younger adults are lower than they were in the early 2000s. The social-media-driven negativity machine may have prevented Gen Z—and all of us—from seeing the good news.
Just as the positive views we have about our individual selves may be exaggerated, the idea that the United States is uniquely superior is also, at least in part, an overly optimistic illusion we tell ourselves as a country. But like our positive self-illusions, patriotism also has its benefits, including a more satisfied citizenry and more political stability. With Gen Z unconvinced of the country’s exceptionalism and willing to take action, the U.S. may, in the coming decades, witness an era of extraordinary political change.
www.theatlantic.com › politics › archive › 2024 › 10 › trump-military-generals-hitler › 680327
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In April 2020, Vanessa Guillén, a 20-year-old Army private, was bludgeoned to death by a fellow soldier at Fort Hood, in Texas. The killer, aided by his girlfriend, burned Guillén’s body. Guillén’s remains were discovered two months later, buried in a riverbank near the base, after a massive search.
Guillén, the daughter of Mexican immigrants, grew up in Houston, and her murder sparked outrage across Texas and beyond. Fort Hood had become known as a particularly perilous assignment for female soldiers, and members of Congress took up the cause of reform. Shortly after her remains were discovered, President Donald Trump himself invited the Guillén family to the White House. With Guillén’s mother seated beside him, Trump spent 25 minutes with the family as television cameras recorded the scene.
In the meeting, Trump maintained a dignified posture and expressed sympathy to Guillén’s mother. “I saw what happened to your daughter Vanessa, who was a spectacular person, and respected and loved by everybody, including in the military,” Trump said. Later in the conversation, he made a promise: “If I can help you out with the funeral, I’ll help—I’ll help you with that,” he said. “I’ll help you out. Financially, I’ll help you.”
Natalie Khawam, the family’s attorney, responded, “I think the military will be paying—taking care of it.” Trump replied, “Good. They’ll do a military. That’s good. If you need help, I’ll help you out.” Later, a reporter covering the meeting asked Trump, “Have you offered to do that for other families before?” Trump responded, “I have. I have. Personally. I have to do it personally. I can’t do it through government.” The reporter then asked: “So you’ve written checks to help for other families before this?” Trump turned to the family, still present, and said, “I have, I have, because some families need help … Maybe you don’t need help, from a financial standpoint. I have no idea what—I just think it’s a horrific thing that happened. And if you did need help, I’m going to—I’ll be there to help you.”
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A public memorial service was held in Houston two weeks after the White House meeting. It was followed by a private funeral and burial in a local cemetery, attended by, among others, the mayor of Houston and the city’s police chief. Highways were shut down, and mourners lined the streets.
Five months later, the secretary of the Army, Ryan McCarthy, announced the results of an investigation. McCarthy cited numerous “leadership failures” at Fort Hood and relieved or suspended several officers, including the base’s commanding general. In a press conference, McCarthy said that the murder “shocked our conscience” and “forced us to take a critical look at our systems, our policies, and ourselves.”
According to a person close to Trump at the time, the president was agitated by McCarthy’s comments and raised questions about the severity of the punishments dispensed to senior officers and noncommissioned officers.
In an Oval Office meeting on December 4, 2020, officials gathered to discuss a separate national-security issue. Toward the end of the discussion, Trump asked for an update on the McCarthy investigation. Christopher Miller, the acting secretary of defense (Trump had fired his predecessor, Mark Esper, three weeks earlier, writing in a tweet, “Mark Esper has been terminated”), was in attendance, along with Miller’s chief of staff, Kash Patel. At a certain point, according to two people present at the meeting, Trump asked, “Did they bill us for the funeral? What did it cost?”
According to attendees, and to contemporaneous notes of the meeting taken by a participant, an aide answered: Yes, we received a bill; the funeral cost $60,000.
Trump became angry. “It doesn’t cost 60,000 bucks to bury a fucking Mexican!” He turned to his chief of staff, Mark Meadows, and issued an order: “Don’t pay it!” Later that day, he was still agitated. “Can you believe it?” he said, according to a witness. “Fucking people, trying to rip me off.”
Khawam, the family attorney, told me she sent the bill to the White House, but no money was ever received by the family from Trump. Some of the costs, Khawam said, were covered by the Army (which offered, she said, to allow Guillén to be buried at Arlington National Cemetery) and some were covered by donations. Ultimately, Guillén was buried in Houston.
Shortly after I emailed a series of questions to a Trump spokesperson, Alex Pfeiffer, I received an email from Khawam, who asked me to publish a statement from Mayra Guillén, Vanessa’s sister. Pfeiffer then emailed me the same statement. “I am beyond grateful for all the support President Donald Trump showed our family during a trying time,” the statement reads. “I witnessed firsthand how President Trump honors our nation’s heroes’ service. We are grateful for everything he has done and continues to do to support our troops.”
Pfeiffer told me that he did not write that statement, and emailed me a series of denials. Regarding Trump’s “fucking Mexican” comment, Pfeiffer wrote: “President Donald Trump never said that. This is an outrageous lie from The Atlantic two weeks before the election.” He provided statements from Patel and a spokesman for Meadows, who denied having heard Trump make the statement. Via Pfeiffer, Meadows’s spokesman also denied that Trump had ordered Meadows not to pay for the funeral.
The statement from Patel that Pfeiffer sent me said: “As someone who was present in the room with President Trump, he strongly urged that Spc. Vanessa Guillen’s grieving family should not have to bear the cost of any funeral arrangements, even offering to personally pay himself in order to honor her life and sacrifice. In addition, President Trump was able to have the Department of Defense designate her death as occurring ‘in the line of duty,’ which gave her full military honors and provided her family access to benefits, services, and complete financial assistance.”
The personal qualities displayed by Trump in his reaction to the cost of the Guillén funeral—contempt, rage, parsimony, racism—hardly surprised his inner circle. Trump has frequently voiced his disdain for those who serve in the military and for their devotion to duty, honor, and sacrifice. Former generals who have worked for Trump say that the sole military virtue he prizes is obedience. As his presidency drew to a close, and in the years since, he has become more and more interested in the advantages of dictatorship, and the absolute control over the military that he believes it would deliver. “I need the kind of generals that Hitler had,” Trump said in a private conversation in the White House, according to two people who heard him say this. “People who were totally loyal to him, that follow orders.” (“This is absolutely false,” Pfeiffer wrote in an email. “President Trump never said this.”)
A desire to force U.S. military leaders to be obedient to him and not the Constitution is one of the constant themes of Trump’s military-related discourse. Former officials have also cited other recurring themes: his denigration of military service, his ignorance of the provisions of the Uniform Code of Military Justice, his admiration for brutality and anti-democratic norms of behavior, and his contempt for wounded veterans and for soldiers who fell in battle.
Retired General Barry McCaffrey, a decorated Vietnam veteran, told me that Trump does not comprehend such traditional military virtues as honor and self-sacrifice. “The military is a foreign country to him. He doesn’t understand the customs or codes,” McCaffrey said. “It doesn’t penetrate. It starts with the fact that he thinks it’s foolish to do anything that doesn’t directly benefit himself.”
I’ve been interested in Trump’s understanding of military affairs for nearly a decade. At first, it was cognitive dissonance that drew me to the subject—according to my previous understanding of American political physics, Trump’s disparagement of the military, and in particular his obsessive criticism of the war record of the late Senator John McCain, should have profoundly alienated Republican voters, if not Americans generally. And in part my interest grew from the absolute novelty of Trump’s thinking. This country had never seen, to the best of my knowledge, a national political figure who insulted veterans, wounded warriors, and the fallen with metronomic regularity.
Today—two weeks before an election that could see Trump return to the White House—I’m most interested in his evident desire to wield military power, and power over the military, in the manner of Hitler and other dictators.
Trump’s singularly corrosive approach to military tradition was in evidence as recently as August, when he described the Medal of Honor, the nation’s top award for heroism and selflessness in combat, as inferior to the Medal of Freedom, which is awarded to civilians for career achievement. During a campaign speech, he described Medal of Honor recipients as “either in very bad shape because they’ve been hit so many times by bullets or they’re dead,” prompting the Veterans of Foreign Wars to issue a condemnation: “These asinine comments not only diminish the significance of our nation’s highest award for valor, but also crassly characterizes the sacrifices of those who have risked their lives above and beyond the call of duty.” Later in August, Trump caused controversy by violating federal regulations prohibiting the politicization of military cemeteries, after a campaign visit to Arlington in which he gave a smiling thumbs-up while standing behind gravestones of fallen American soldiers.
His Medal of Honor comments are of a piece with his expressed desire to receive a Purple Heart without being wounded. He has also equated business success to battlefield heroism. In the summer of 2016, Khizr Khan, the father of a 27-year-old Army captain who had been killed in Iraq, told the Democratic National Convention that Trump has “sacrificed nothing.” In response, Trump disparaged the Khan family and said, “I think I’ve made a lot of sacrifices. I work very, very hard. I’ve created thousands and thousands of jobs, tens of thousands of jobs, built great structures.”
One former Trump-administration Cabinet secretary told me of a conversation he’d had with Trump during his time in office about the Vietnam War. Trump famously escaped the draft by claiming that his feet were afflicted with bone spurs. (“I had a doctor that gave me a letter—a very strong letter on the heels,” Trump told The New York Times in 2016.) Once, when the subject of aging Vietnam veterans came up in conversation, Trump offered this observation to the Cabinet official: “Vietnam would have been a waste of time for me. Only suckers went to Vietnam.”
In 1997, Trump told the radio host Howard Stern that avoiding sexually transmitted diseases was “my personal Vietnam. I feel like a great and very brave soldier.” This was not the only time Trump has compared his sexual exploits and political challenges to military service. Last year, at a speech before a group of New York Republicans, while discussing the fallout from the release of the Access Hollywood tape, he said, “I went onto that (debate) stage just a few days later and a general, who’s a fantastic general, actually said to me, ‘Sir, I’ve been on the battlefield. Men have gone down on my left and on my right. I stood on hills where soldiers were killed. But I believe the bravest thing I’ve ever seen was the night you went onto that stage with Hillary Clinton after what happened.’” I asked Trump-campaign officials to provide the name of the general who allegedly said this. Pfeiffer, the campaign spokesman, said, “This is a true story and there is no good reason to give the name of an honorable man to The Atlantic so you can smear him.”
In their book, The Divider: Trump in the White House, Peter Baker and Susan Glasser reported that Trump asked John Kelly, his chief of staff at the time, “Why can’t you be like the German generals?” Trump, at various points, had grown frustrated with military officials he deemed disloyal and disobedient. (Throughout the course of his presidency, Trump referred to flag officers as “my generals.”) According to Baker and Glasser, Kelly explained to Trump that German generals “tried to kill Hitler three times and almost pulled it off.” This correction did not move Trump to reconsider his view: “No, no, no, they were totally loyal to him,” the president responded.
This week, I asked Kelly about their exchange. He told me that when Trump raised the subject of “German generals,” Kelly responded by asking, “‘Do you mean Bismarck’s generals?’” He went on: “I mean, I knew he didn’t know who Bismarck was, or about the Franco-Prussian War. I said, ‘Do you mean the kaiser’s generals? Surely you can’t mean Hitler’s generals? And he said, ‘Yeah, yeah, Hitler’s generals.’ I explained to him that Rommel had to commit suicide after taking part in a plot against Hitler.” Kelly told me Trump was not acquainted with Rommel.
[From the November 2023 issue: The patriot]
Baker and Glasser also reported that Mark Milley, the former chairman of the Joint Chiefs of Staff, feared that Trump’s “‘Hitler-like’ embrace of the big lie about the election would prompt the president to seek out a ‘Reichstag moment.’”
Kelly—a retired Marine general who, as a young man, had volunteered to serve in Vietnam despite actually suffering from bone spurs—said in an interview for the CNN reporter Jim Sciutto’s book, The Return of Great Powers, that Trump praised aspects of Hitler’s leadership. “He said, ‘Well, but Hitler did some good things,’” Kelly recalled. “I said, ‘Well, what?’ And he said, ‘Well, (Hitler) rebuilt the economy.’ But what did he do with that rebuilt economy? He turned it against his own people and against the world.” Kelly admonished Trump: “I said, ‘Sir, you can never say anything good about the guy. Nothing.’”
This wasn’t the only time Kelly felt compelled to instruct Trump on military history. In 2018, Trump asked Kelly to explain who “the good guys” were in World War I. Kelly responded by explaining a simple rule: Presidents should, as a matter of politics and policy, remember that the “good guys” in any given conflict are the countries allied with the United States. Despite Trump’s lack of historical knowledge, he has been on record as saying that he knew more than his generals about warfare. He told 60 Minutes in 2018 that he knew more about NATO than James Mattis, his secretary of defense at the time, a retired four-star Marine general who had served as a NATO official. Trump also said, on a separate occasion, that it was he, not Mattis, who had “captured” the Islamic State.
As president, Trump evinced extreme sensitivity to criticism from retired flag officers; at one point, he proposed calling back to active duty Admiral William McRaven and General Stanley McChrystal, two highly regarded Special Operations leaders who had become critical of Trump, so that they could be court-martialed. Esper, who was the defense secretary at the time, wrote in his memoir that he and Milley talked Trump out of the plan. (Asked about criticism from McRaven, who oversaw the raid that killed Osama bin Laden, Trump responded by calling him a “Hillary Clinton backer and an Obama backer” and said, “Wouldn’t it have been nice if we got Osama bin Laden a lot sooner than that?”)
Trump has responded incredulously when told that American military personnel swear an oath to the Constitution, not to the president. According to the New York Times reporter Michael S. Schmidt’s recent book, Donald Trump v. the United States, Trump asked Kelly, “Do you really believe you’re not loyal to me?” Kelly answered, “I’m certainly part of the administration, but my ultimate loyalty is to the rule of law.” Trump also publicly floated the idea of “termination of all rules, regulations, and articles, even those found in the Constitution,” as part of the effort to overturn the 2020 presidential election and keep himself in power.
On separate occasions in 2020, Trump held private conversations in the White House with national-security officials about the George Floyd protests. “The Chinese generals would know what to do,” he said, according to former officials who described the conversations to me, referring to the leaders of the People’s Liberation Army, which carried out the Tiananmen Square massacre in 1989. (Pfeiffer denied that Trump said this.) Trump’s desire to deploy U.S. troops against American citizens is well documented. During the nerve-racking period of social unrest following Floyd’s death, Trump asked Milley and Esper, a West Point graduate and former infantry officer, if the Army could shoot protesters. “Trump seemed unable to think straight and calmly,” Esper wrote in his memoir. “The protests and violence had him so enraged that he was willing to send in active-duty forces to put down the protesters. Worse yet, he suggested we shoot them. I wondered about his sense of history, of propriety, and of his oath to the Constitution.” Esper told National Public Radio in 2022, “We reached that point in the conversation where he looked frankly at General Milley, and said, ‘Can’t you just shoot them, just shoot them in the legs or something?’” When defense officials argued against Trump’s desire, the president screamed, according to witnesses, “You are all fucking losers!”
Trump has often expressed his esteem for the type of power wielded by such autocrats as the Chinese leader Xi Jinping; his admiration, even jealousy, of Vladimir Putin is well known. In recent days, he has signaled that, should he win reelection in November, he would like to govern in the manner of these dictators—he has said explicitly that he would like to be a dictator for a day on his first day back in the White House—and he has threatened to, among other things, unleash the military on “radical-left lunatics.” (One of his four former national security advisers, John Bolton, wrote in his memoir, “It is a close contest between Putin and Xi Jinping who would be happiest to see Trump back in office.”)
Military leaders have condemned Trump for possessing autocratic tendencies. At his retirement ceremony last year, Milley said, “We don’t take an oath to a king, or a queen, or to a tyrant or dictator, and we don’t take an oath to a wannabe dictator … We take an oath to the Constitution, and we take an oath to the idea that is America, and we’re willing to die to protect it.” Over the past several years, Milley has privately told several interlocutors that he believed Trump to be a fascist. Many other leaders have also been shocked by Trump’s desire for revenge against his domestic critics. At the height of the Floyd protests, Mattis wrote, “When I joined the military, some 50 years ago, I swore an oath to support and defend the Constitution. Never did I dream that troops taking that same oath would be ordered under any circumstance to violate the Constitutional rights of their fellow citizens.”
Trump’s frustration with American military leaders led him to disparage them regularly. In their book A Very Stable Genius, Carol Leonnig and Philip Rucker, both of The Washington Post, reported that in 2017, during a meeting at the Pentagon, Trump screamed at a group of generals: “I wouldn’t go to war with you people. You’re a bunch of dopes and babies.” And in his book Rage, Bob Woodward reported that Trump complained that “my fucking generals are a bunch of pussies. They care more about their alliances than they do about trade deals.”
Trump’s disdain for American military officers is motivated in part by their willingness to accept low salaries. Once, after a White House briefing given by the then-chairman of the Joint Chiefs of Staff, General Joseph Dunford, Trump said to aides, “That guy is smart. Why did he join the military?” (On another occasion, John Kelly asked Trump to guess Dunford’s annual salary. The president’s answer: $5 million. Dunford’s actual salary was less than $200,000.)
Trump has often expressed his love for the trappings of martial power, demanding of his aides that they stage the sort of armor-heavy parades foreign to American tradition. Civilian aides and generals alike pushed back. In one instance, Air Force General Paul Selva, who was then serving as vice chairman of the Joint Chiefs of Staff, told the president that he had been partially raised in Portugal, which, he explained, “was a dictatorship—and parades were about showing the people who had the guns. In America, we don’t do that. It’s not who we are.”
For Republicans in 2012, it was John McCain who served as a model of “who we are.” But by 2015, the party had shifted. In July of that year, Trump, then one of several candidates for the Republican presidential nomination, made a statement that should have ended his campaign. At a forum for Christian conservatives in Iowa, Trump said of McCain, “He’s not a war hero. He is a war hero because he was captured. I like people who weren’t captured.”
It was an astonishing statement, and an introduction to the wider public of Trump’s uniquely corrosive view of McCain, and of his aberrant understanding of the nature of American military heroism. This wasn’t the first time Trump had insulted McCain’s war record. As early as 1999, he was insulting McCain. In an interview with Dan Rather that year, Trump asked, “Does being captured make you a hero? I don’t know. I’m not sure.” (A brief primer: McCain, who had flown 22 combat missions before being shot down over Hanoi, was tortured almost continuously by his Communist captors, and turned down repeated offers to be released early, insisting that prisoners be released in the order that they’d been captured. McCain suffered physically from his injuries until his death, in 2018.) McCain partisans believe, with justification, that Trump’s loathing was prompted in part by McCain’s ability to see through Trump. “John didn’t respect him, and Trump knew that,” Mark Salter, McCain’s longtime aide and co-author, told me. “John McCain had a code. Trump only has grievances and impulses and appetites. In the deep recesses of his man-child soul, he knew that McCain and his achievements made him look like a mutt.”
Trump, those who have worked for him say, is unable to understand the military norm that one does not leave fellow soldiers behind on the battlefield. As president, Trump told senior advisers that he didn’t understand why the U.S. government placed such value on finding soldiers missing in action. To him, they could be left behind, because they had performed poorly by getting captured.
My reporting during Trump’s term in office led me to publish on this site, in September 2020, an article about Trump’s attitudes toward McCain and other veterans, and his views about the ideal of national service itself. The story was based on interviews with multiple sources who had firsthand exposure to Trump and his views. In that piece, I detailed numerous instances of Trump insulting soldiers, flag officers and veterans alike. I wrote extensively about Trump’s reaction to McCain’s death in August 2018: The president told aides, “We’re not going to support that loser’s funeral,” and he was infuriated when he saw flags at the White House lowered to half-mast. “What the fuck are we doing that for? Guy was a fucking loser,” he said angrily. Only when Kelly told Trump that he would get “killed in the press” for showing such disrespect did the president relent. In the article, I also reported that Trump had disparaged President George H. W. Bush, a World War II naval aviator, for getting shot down by the Japanese. Two witnesses told me that Trump said, “I don’t get it. Getting shot down makes you a loser.” (Bush ultimately evaded capture, but eight other fliers were caught and executed by the Japanese).
The next year, White House officials demanded that the Navy keep the U.S.S. John S. McCain, which was named for McCain’s father and grandfather—both esteemed admirals—out of Trump’s sight during a visit to Japan. The Navy did not comply.
Trump’s preoccupation with McCain has not abated. In January, Trump condemned McCain—six years after his death—for having supported President Barack Obama’s health-care plan. “We’re going to fight for much better health care than Obamacare,” Trump told an Iowa crowd. “Obamacare is a catastrophe. Nobody talks about it. You know, without John McCain, we would have had it done. John McCain for some reason couldn’t get his arm up that day. Remember?” This was, it appears, a malicious reference to McCain’s wartime injuries—including injuries suffered during torture—which limited his upper-body mobility.
[Jeffrey Goldberg: Trump: Americans who died in war are ‘losers’ and ‘suckers’]
I’ve also previously reported on Trump’s 2017 Memorial Day visit to Arlington National Cemetery. Kelly, who was then the secretary of homeland security, accompanied him. The two men visited Section 60, the 14-acre section that is the burial ground for those killed in America’s most recent wars (and the site of Trump’s Arlington controversy earlier this year). Kelly’s son Robert, a Marine officer killed in 2010 in Afghanistan, is buried in Section 60. Trump, while standing by Robert Kelly’s grave, turned to his father and said, “I don’t get it. What was in it for them?” At first, Kelly believed that Trump was making a reference to the selflessness of America’s all-volunteer force. But later he came to realize that Trump simply does not understand nontransactional life choices. I quoted one of Kelly’s friends, a fellow retired four-star general, who said of Trump, “He can’t fathom the idea of doing something for someone other than himself. He just thinks that anyone who does anything when there’s no direct personal gain to be had is a sucker.” At moments when Kelly was feeling particularly frustrated by Trump, he would leave the White House and cross the Potomac to visit his son’s grave, in part to remind himself about the nature of full-measure sacrifice.
Last year Kelly told me, in reference to Mark Milley’s 44 years in uniform, “The president couldn’t fathom people who served their nation honorably.”
The specific incident I reported in the 2020 article that gained the most attention also provided the story with its headline—“Trump: Americans Who Died in War Are ‘Losers’ and ‘Suckers.’” The story concerned a visit Trump made to France in 2018, during which the president called Americans buried in a World War I cemetery “losers.” He said, in the presence of aides, “Why should I go to that cemetery? It’s filled with losers.” At another moment during this trip, he referred to the more than 1,800 Marines who had lost their lives at Belleau Wood as “suckers” for dying for their country.
Trump had already been scheduled to visit one cemetery, and he did not understand why his team was scheduling a second cemetery visit, especially considering that the rain would be hard on his hair. “Why two cemeteries?” Trump asked. “What the fuck?” Kelly subsequently canceled the second visit, and attended a ceremony there himself with General Dunford and their wives.
White House Chief of Staff John Kelly and Chairman of the Joint Chiefs of Staff Joseph Dunford visit the Aisne-Marne American Cemetery and Memorial in Belleau, France, in November 2018. (Shealah Craighead / White House)The article sparked great controversy, and provoked an irate reaction from the Trump administration, and from Trump himself. In tweets, statements, and press conferences in the days, weeks, and years that followed, Trump labeled The Atlantic a “second-rate magazine,” a “failing magazine,” a “terrible magazine,” and a “third-rate magazine that’s not going to be in business much longer”; he also referred to me as a “con man,” among other things. Trump has continued these attacks recently, calling me a “horrible, radical-left lunatic named Goldberg” at a rally this summer.
In the days after my original article was published, both the Associated Press and, notably, Fox News, confirmed the story, causing Trump to demand that Fox fire Jennifer Griffin, its experienced and well-regarded defense reporter. A statement issued by Alyssa Farah, a White House spokesperson, soon after publication read, “This report is false. President Trump holds the military in the highest regard.”
Shortly after the story appeared, Farah asked numerous White House officials if they had heard Trump refer to veterans and war dead as suckers or losers. She reported publicly that none of the officials she asked had heard him use these terms. Eventually, Farah came out in opposition to Trump. She wrote on X last year that she’d asked the president if my story was true. “Trump told me it was false. That was a lie.”
When I spoke to Farah, who is now known as Alyssa Farah Griffin, this week, she said, “I understood that people were skeptical about the ‘suckers and losers’ story, and I was in the White House pushing back against it. But he said this to John Kelly’s face, and I fundamentally, absolutely believe that John Kelly is an honorable man who served our country and who loves and respects our troops. I’ve heard Donald Trump speak in a dehumanizing way about so many groups. After working for him in 2020 and hearing his continuous attacks on service members since that time, including my former boss General Mark Milley, I firmly and unequivocally believe General Kelly’s account.”
(Pfeiffer, the Trump spokesperson, said, in response, “Alyssa is a scorned former employee now lying in her pursuit to chase liberal adulation. President Trump would never insult our nation’s heroes.”)
Last year, I published a story in this magazine about Milley that coincided with the end of his four-year term. In it, I detailed his tumultuous relationship with Trump. Milley had resisted Trump’s autocratic urges, and also argued against his many thoughtless and impetuous national-security impulses. Shortly after that story appeared, Trump publicly suggested that Milley be executed for treason. This astonishing statement caused John Kelly to speak publicly about Trump and his relationship to the military. Kelly, who had previously called Trump “the most flawed person I have ever met in my life,” told CNN’s Jake Tapper that Trump had referred to American prisoners of war as “suckers” and described as “losers” soldiers who died while fighting for their country.
“What can I add that has not already been said?” Kelly asked. “A person that thinks those who defend their country in uniform, or are shot down or seriously wounded in combat, or spend years being tortured as POWs, are all ‘suckers’ because ‘there is nothing in it for them.’ A person that did not want to be seen in the presence of military amputees because ‘it doesn’t look good for me.’ A person who demonstrated open contempt for a Gold Star family—for all Gold Star families—on TV during the 2016 campaign, and rants that our most precious heroes who gave their lives in America’s defense are ‘losers’ and wouldn’t visit their graves in France.”
When we spoke this week, Kelly told me, “President Trump used the terms suckers and losers to describe soldiers who gave their lives in the defense of our country. There are many, many people who have heard him say these things. The visit to France wasn’t the first time he said this.”
Kelly and others have taken special note of the revulsion Trump feels in the presence of wounded veterans. After Trump attended a Bastille Day parade in France, he told Kelly and others that he would like to stage his own parade in Washington, but without the presence of wounded veterans. “I don’t want them,” Trump said. “It doesn’t look good for me.”
Milley also witnessed Trump’s disdain for the wounded. Milley had chosen a severely wounded Army captain, Luis Avila, to sing “God Bless America” at his installation ceremony in 2019. Avila, who had completed five combat tours, had lost a leg in an improvised-explosive-device attack in Afghanistan, and had suffered two heart attacks, two strokes, and brain damage as a result of his injuries. Avila is considered a hero up and down the ranks of the Army.
It had rained earlier on the day of the ceremony, and the ground was soft; at one point Avila’s wheelchair almost toppled over. Milley’s wife, Hollyanne, ran to help Avila, as did then–Vice President Mike Pence. After Avila’s performance, Trump walked over to congratulate him, but then said to Milley, within earshot of several witnesses, “Why do you bring people like that here? No one wants to see that, the wounded.” Never let Avila appear in public again, Trump told Milley.
An equally serious challenge to Milley’s sense of duty came in the form of Trump’s ignorance of the rules of war. In November 2019, Trump intervened in three different brutality cases then being adjudicated by the military. In the most infamous case, the Navy SEAL Eddie Gallagher had been found guilty of posing with the corpse of an ISIS member. Though Gallagher was found not guilty of murder, witnesses testified that he’d stabbed the prisoner in the neck with a hunting knife. In a highly unusual move, Trump reversed the Navy’s decision to demote him. A junior Army officer named Clint Lorance was also the recipient of Trump’s sympathy. Trump pardoned Lorance, who had been convicted of ordering the shooting of three unarmed Afghans, two of whom died. And in a third case, a Green Beret named Mathew Golsteyn was accused of killing an unarmed Afghan he thought was a Taliban bomb maker. “I stuck up for three great warriors against the deep state,” Trump said at a Florida rally.
In the Gallagher case, Trump intervened to allow Gallagher to keep his Trident insignia, one of the most coveted insignia in the entire U.S. military. The Navy’s leadership found this intervention particularly offensive because tradition held that only a commanding officer or a group of SEALs on a Trident Review Board were supposed to decide who merited being a SEAL. Milley tried to convince Trump that his intrusion was hurting Navy morale. They were flying from Washington to Dover Air Force Base, in Delaware, to attend a “dignified transfer,” a repatriation ceremony for fallen service members, when Milley tried to explain to Trump the damage that his interventions were doing.
In my story, I reported that Milley said, “Mr. President, you have to understand that the SEALs are a tribe within a larger tribe, the Navy. And it’s up to them to figure out what to do with Gallagher. You don’t want to intervene. This is up to the tribe. They have their own rules that they follow.”
Trump called Gallagher a hero and said he didn’t understand why he was being punished.
“Because he slit the throat of a wounded prisoner,” Milley said.
“The guy was going to die anyway,” Trump said.
Milley answered, “Mr. President, we have military ethics and laws about what happens in battle. We can’t do that kind of thing. It’s a war crime.” Trump said he didn’t understand “the big deal.” He went on, “You guys”—meaning combat soldiers—“are all just killers. What’s the difference?”
Milley then summoned one of his aides, a combat-veteran SEAL officer, to the president’s Air Force One office. Milley took hold of the Trident pin on the SEAL’s chest and asked him to describe its importance. The aide explained to Trump that, by tradition, only SEALs can decide, based on assessments of competence and character, whether one of their own should lose his pin. But the president’s mind was not changed. Gallagher kept his pin.
One day, in the first year of Trump’s presidency, I had lunch with Jared Kushner, Trump’s son-in-law, in his White House office. I turned the discussion, as soon as I could, to the subject of his father-in-law’s character. I mentioned one of Trump’s recent outbursts and told Kushner that, in my opinion, the president’s behavior was damaging to the country. I cited, as I tend to do, what is in my view Trump’s original sin: his mockery of John McCain’s heroism.
This is where our conversation got strange, and noteworthy. Kushner answered in a way that made it seem as though he agreed with me. “No one can go as low as the president,” he said. “You shouldn’t even try.”
I found this baffling for a moment. But then I understood: Kushner wasn’t insulting his father-in-law. He was paying him a compliment. In Trump’s mind, traditional values—values including those embraced by the armed forces of the United States having to do with honor, self-sacrifice, and integrity—have no merit, no relevance, and no meaning.
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In the months leading up to a presidential election, bookstores fill with campaign memoirs. These titles are, for the most part, ghostwritten. They are devoid of psychological insights and bereft of telling moments, instead typically giving their readers the most stilted of self-portraits, produced in hackish haste. They are, really, a pretext for an aspirant’s book tour and perhaps an appearance on The View—in essence, a campaign advertisement squeezed between two covers.
But these self-serving vehicles shouldn’t indict the larger genre of political autobiography. Truly excellent books have been written about statecraft and power from the inside. And few professions brim with more humanity, in all of its flawed majesty: Politicians must confront both the irresistible temptations of high office and the inevitable shattering of high ideals, which means that they supply some very good stories. After all, some of the world’s most important writers began as failed leaders and frustrated government officials—think Niccolò Machiavelli, Nikolai Gogol, and Alexis de Tocqueville.
The books on this list were published years ago, but their distance from the present moment makes them so much more interesting than the quickies that have been churned out for the current election season. Several of them are set abroad, yet the essential moral questions about power that they document are universal. Each is a glimpse into the mind and character of those attracted to the most noble and the most crazed of professions, and offers a bracing reminder of the virtues and dangers of political life.
Fire and Ashes, by Michael Ignatieff
Intellectuals can’t help themselves. They look at the buffoons and dimwits who speechify on the stump and think, I can do better. Take Michael Ignatieff, who briefly ditched his life as a Harvard professor and journalist to become the head of Canada’s Liberal Party. In 2011, at the age of 64, he ran for prime minister—and led his party to its worst defeat since its founding in 1867. In Fire and Ashes, his memoir of his brief political career, he writes about the humiliations of the campaign trail, and his own disastrous performance on it, in the spirit of self-abasement. (The best section of the book is about the confusing indignities—visits to the dry cleaner, driving his own car—of returning to everyday life after leaving politics.) In the course of losing, Ignatieff acquired a profound new respect for the gritty business of politics and all the nose counting, horse trading, and baby kissing it requires. His crashing defeat is the stuff of redemption, having forced him to appreciate the rituals of the political vocation that he once dismissed as banal.
[Michael Ignatieff: Why would anyone become a politician?]
Witness, by Whittaker Chambers
This 1952 memoir is still thrust in the hands of budding young conservatives, as a means of inculcating them into the movement. Published during an annus mirabilis for conservative treatises, just as the American right was beginning to emerge in its modern incarnation, Witness is draped in apocalyptic rhetoric about the battle for the future of mankind—a style that helped establish the Manichaean mentality of postwar conservatism. But the book is more than an example of an outlook: It tells a series of epic stories. Chambers narrates his time as an underground Communist activist in the ’30s, a fascinating tale of subterfuge. An even larger stretch of the book is devoted to one of the great spectacles in modern American politics, the Alger Hiss affair. In 1948, after defecting from his sect, Chambers delivered devastating testimony before the House Un-American Activities Committee accusing Hiss, a former State Department official and a paragon of the liberal establishment, of being a Soviet spy. History vindicates Chambers’s version of events, and his propulsive storytelling withstands the test of time.
Life So Far, by Betty Friedan
Humans have a deep longing to canonize political heroes as saints. But many successful activists are unpleasant human beings—frequently, in fact, royal pains in the ass. Nobody did more than Friedan to popularly advance the cause of feminism in the 1960s, but her method consisted of stubborn obstreperousness and an unstinting faith in her own righteousness. Her memoir is both a disturbing account of her marriage to an abusive man and the inside story of the founding of the National Organization for Women. Friedan’s charmingly self-aware prose provides a window into how feminist ideas were translated into an agenda—and a peek into the mind of one of America’s most effective, if occasionally self-defeating, reformers.
[Read: Melania really doesn’t care]
Palimpsest, by Gore Vidal
Vidal wrote some of the greatest American novels about politics—Burr, Lincoln, 1876. In this magnificently malicious memoir, he trains that political acumen on himself. He could write so vividly about the salons, cloakrooms, and dark corridors of Washington because he extracted texture, color, and understanding from his own life. His grandfather was T. P. Gore, a senator from Oklahoma. Jacqueline Onassis was his relative by marriage, and he writes about growing up alongside her on the banks of the Potomac. And for years, he baldly admits, he harbored the illusion that he might become a great politician himself, unsuccessfully running for Congress in 1960, and then for Senate in 1982. Vidal didn’t have a politician’s temperament, to say the least: He lived to feud. Robert F. Kennedy became Vidal’s nemesis after kicking him out of the White House for an embarrassing display of drunkenness; William F. Buckley, whom Vidal debated live in prime time during the political conventions of 1968, was another hated rival. The critic John Lahr once said that “no one quite pisses from the height that Vidal does,” which is pretty much the perfect blurb for this journey into a mind bursting with schadenfreude, hauteur, and an abiding affection for politics.
This Child Will Be Great, by Ellen Johnson Sirleaf
In defeat, Ignatieff came to appreciate the nobility of politics. The life of Liberia’s Sirleaf, Africa’s first elected female president—or, to borrow a cliché, “Africa’s Iron Lady”—is closer to the embodiment of that ideal. She led Liberia after suffering under the terrifying reigns of Samuel Doe and Charles Taylor, who corruptly governed their country; Taylor notoriously built an army of child soldiers and used rape as a weapon. As a leader of the opposition to these despots, Sirleaf survived imprisonment, exile, and an abusive husband. She narrowly avoided execution at the hands of a firing squad. Her literary style is modest, sometimes wonky—she’s a trained economist—but her memoir contains the complicated, tragic story of a nation, which she describes as “a conundrum wrapped in complexity and stuffed inside a paradox.” (That story is, in fact, a damning indictment of U.S. foreign policy.) Her biography is electrifying, an urgently useful example of persistence in the face of despair.
[Read: A dissident is built different]
Cold Cream, by Ferdinand Mount
Only a fraction of this hilarious, gorgeous memoir is about politics, but it’s so delightful that it merits a place on this list. Like Vidal and Igantieff, Mount is an intellectual who tried his hand at electoral politics. But when he ran for the British Parliament as a Tory, he had shortcomings: He spoke with “a languid gabble that communicated all too vividly my inner nervous state … I found myself overcome with boredom by the sound of my own voice. This sudden sensation of tedium verging on disgust did not go away with practice.” A few years later, he turned up as a speechwriter for Margaret Thatcher, as well as her chief policy adviser. As he chronicles life at 10 Downing Street, his ironic sensibility is the chief source of pleasure. His descriptions of Thatcher, especially her inability to read social cues, mingle with his admiration for her leadership and ideological zeal. There are shelves of gossipy books by aides; Mount’s wry retelling of his stint in the inner sanctum is my favorite.
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www.theatlantic.com › ideas › archive › 2024 › 10 › america-birthday-national-story › 680248
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People often have mixed feelings about their birthdays, especially as they age. Countries can experience that too. For better or worse, America is due for a big birthday party: July 4, 2026, will mark the 250th anniversary of the Declaration of Independence—our national semiquincentennial, in the awkward Latinate construction, or “semiquin” for short. In an ideal world, it would be a moment of commemoration and celebration as well as a chance to reflect on national history. But so far, the semiquin is shaping up as an embarrassingly accurate reflection of America’s identity crisis.
Until recently, America250, the federal commission charged with planning for 2026, was mired in organizational infighting and countless disputes, including over funding shortages and the distribution of patronage. Authorized while Barack Obama was president, the commission started work under Donald Trump, changed course under Joe Biden, and will spend most of 2025 answering to who knows which chief executive. But the challenges of 2026 extend well beyond logistics, appropriations, and leadership. How do you throw a grand national party when the country seems unable to agree on first principles or basic facts? Should 2026 be a rah-rah festival or a sober history lesson? What should the non-MAGA component of the American populace—that is, at least half of it— bring to such a patriotic occasion? Should it bring anything at all?
[Tom Nichols: Reclaiming real American patriotism]
Former U.S. Treasurer Rosie Rios, now the head of America250, still believes that the country can pull off something meaningful. The child of a Mexican-born single mother, she recalls the 1976 bicentennial as a moment when she began to feel “pride in what it means to be American.” She wants 2026 to offer the same sort of experience, tailored to a new generation.
And perhaps it will. As Rios pointed out when we spoke, 1976 was itself hardly a moment of political harmony; the Vietnam War and Watergate had just crashed to a close, right on the heels of the turbulent 1960s. Nor, for that matter, was American society especially peaceable at the time of the sesquicentennial, in 1926, when the Ku Klux Klan was regularly parading through Washington, D.C.; or at the time of the centennial, in 1876, when the country was fighting over the future of Reconstruction; or at the time of the semicentennial, in 1826, when a controversial populist leader, Andrew Jackson, had just lost a close election and vowed to return for a second go-round.
What seems different about the present moment is that the very idea of trying to tell some sort of national story—much less one with patriotic overtones—has itself been called into question. That’s especially true among the people who purport to care most deeply about an honest reckoning with the American past. For generations, liberals leaned into a story of gradual, if uneven, progress toward unfulfilled ideals. But even they no longer believe that the narrative of progress holds the power it once did.
There is, of course, no national narrative that will magically unite America; true national consensus has never existed and won’t suddenly materialize now. But during past celebrations—50, 100, 150 years ago—the people excluded from America’s mythic narrative managed to leverage the nation’s symbols and rhetoric and put alternative stories before the public. They believed that the Declaration of Independence and the flag could be useful and inspirational.
At stake in 2026 is whether a divided country can find common symbols worth embracing. But also at stake is whether those who take a critical view of America’s past will step up proudly and say not only what they stand against, but what they stand for in the American story.
There was once a standard template for how to celebrate a centennial: Declare greatness and throw a big party, preferably in Philadelphia. Over the past two centuries, this model has yielded its fair share of jingoism, along with fireworks and flags and cannon blasts. But it has also provided an opportunity for reexamining American history and for raising questions about the country’s future.
The first attempt at a national party in Philadelphia, during the “jubilee” year of 1826, did not quite come off. As one local newspaper noted, “The apathy of the citizens” seemed to be the defining feature of that particular July 4. The anniversary nonetheless occasioned at least a bit of national self-reflection. In early 1824, anticipating the semicentennial, President James Monroe invited the Marquis de Lafayette, the teenage French hero of the American Revolution, to return to the U.S. and take a look at what he had wrought. With much hoopla, Lafayette visited every state as well as the nation’s capital. But he also expressed horror at certain aspects of American life, especially the South’s ongoing embrace of slavery. During a visit to the Virginia plantation of former President James Madison, Lafayette pointedly reminded him of “the right that all men, without exception, have to liberty.”
Fifty years later, on the other side of the devastating Civil War, Philadelphia tried again. This time, it succeeded. With an eye to the world’s fairs then popular in Europe, the city was determined to put on “the greatest international exposition that the world had ever witnessed,” as the historian Thomas H. Keels writes—albeit an exposition with a distinctly American stamp. The nation was engaged in a fierce debate over race, political partisanship, women’s rights, and the growing concentration of capital. All the more reason, organizers thought, to try to get everyone together to celebrate what there was to like about America.
They started planning a festival for 1876 that was ultimately attended by some 20 percent of the American population. Upon arriving in Philadelphia, those millions of visitors found an entire mini-city constructed to house and display the marvels of the modern world. At the Main Building, ticket-holders encountered their first telephone, courtesy of the rising young inventor Alexander Graham Bell. Thomas Edison sent his latest inventions too. France contributed the upraised right arm and torch of a proposed Statue of Liberty; visitors could ascend stairs to the top for just a dime. The sheer number of gigantic expo buildings—249 in all—testified to the organizers’ outsize ambitions.
This frenzy of activity and investment sent an unmistakable message: Despite the Civil War, America was full of energy and on the rise. But the scale of the spectacle masked important absences. Although 26 states built their own pavilions, most southern states opted out. Black citizens were banned from the expo altogether. When Frederick Douglass, an invited guest, tried to take his seat on the dais at the opening ceremony, guards blocked him until a U.S. senator intervened. The grim politics of 1876 would soon result in a violent and contested presidential election, and with it the end of Reconstruction in the South.
If the expo did little to renew American commitments to equality, it did provide an occasion for certain excluded groups to restate their claims to full American citizenship, using the Declaration as inspiration. On July 4, Susan B. Anthony showed up uninvited at the Independence Hall ceremonies, flanked by fellow suffragists, to read the Declaration of the Rights of Women. In Washington, a group of Black men produced their own Negro Declaration of Independence.
By 1926, the political terrain looked different. White women could finally vote; most Black men and women in the South could not. The U.S. had been through another war, this time in Europe, and had come out of it disillusioned. At home, during the war, the country had jailed thousands of dissenters. The Ku Klux Klan had built a powerful constituency, especially within the Democratic Party. And the country had slammed its doors shut to most immigrants.
The organizers of the sesquicentennial celebration nonetheless doubled down on the model of a big party in Philadelphia. An estimated 6 million people showed up—not as many as the organizers had hoped for, but still a substantial number. The marvels on display were thoroughly of their moment: on the lowbrow end, Jell-O and Maxwell House coffee; on the high, Kandinsky and Matisse.
The exposition was billed as a “Festival of Peace and Progress,” but like its predecessors, it could not help but reflect the political tensions of its time. When the KKK put in a bid for a special Klan day at the fair, the mayor of Philadelphia said yes before saying no. The fair itself was largely segregated, though Philadelphia’s Black community mobilized to ensure at least modest access and participation. Under pressure, the festival added the future civil-rights icon A. Philip Randolph as a last-minute speaker to represent the Black community and share the platform with government officials at the opening ceremony. Randolph delivered a searing account of how the nation had betrayed its promise of equality for Black citizens.
Philadelphia tried to give it one more go 50 years later—for the bicentennial, in 1976. As the big birthday approached, though, many observers started to question whether the standard model really made sense anymore. “Is a World’s Fair-type Bicentennial festival appropriate for a country wracked with social, racial, and environmental agonies?” the writer Ada Louise Huxtable asked in The New York Times. By 1976, President Richard Nixon’s resignation and the mounting traumas of the 1970s had helped to yield a scaled-back, privatized, and decentralized celebration. There were some old-fashioned touches, such as the American Freedom Train, which conveyed the nation’s founding documents and historical treasures from city to city, and the cheery tall ships that sailed between ports. But corporate promotion rather than civic purpose carried the day. Branded products included a 1776-themed tampon disposal bag marketed with the slogan “200 Years of Freedom.”
Critics pushed back against what they described as the “Buycentennial.” Some of the most theatrical resistance came from an ad hoc group called the People’s Bicentennial Commission, organized by the New Left activist (and future social theorist) Jeremy Rifkin. The group held rallies at sites such as Lexington and Concord, all the while claiming to be acting in the true spirit of ’76. Rifkin thought it crucial that the American left engage with rather than reject the narratives and symbols of the nation’s founding. Other groups, including the Afro-American Bicentennial Corporation, sought to ensure that at least some programming would reflect the Black experience. They advocated for a more diverse and inclusive account of the nation’s history—not one American story, but many.
At least some of that vision began to be realized in the years during and after the bicentennial. What 1976 may have lacked in spectacle, it ultimately made up for with quiet investment in the infrastructure of public history, much of it attuned to bringing overdue attention to marginalized groups. According to a study by the American Association of State and Local History, some 40 percent of all historical institutions in existence by 1984—museums, living-history sites, local preservation societies, and the like—were created during the bicentennial era.
In the summer of 2016, while most of the country was transfixed by the presidential race pitting Hillary Clinton against Donald Trump, Congress established the United States Semiquincentennial Commission, made up of private citizens, members of Congress, and federal officials. The commission was given the job of overseeing a national 2026 initiative.
Its leaders took their time getting started, and Trump’s White House offered little guidance beyond the implicit admonishment to make American history great again. In Philadelphia, a group of local boosters took matters into their own hands. They called themselves USA250, a name barely distinguishable from that of the federal commission, and set out to make the case for a “blockbuster festival.”
USA250 had no shortage of ambitious, expensive ideas. Beginning in 2025, according to one scheme, roving caravans would crisscross the country, showcasing the best of American history, art, food, and music. In 2026, the caravans would converge on Philadelphia. The budget that the organizers imagined was a symbolic $20.26 billion. However, there were no longer many takers for this kind of effort, even in Philadelphia. The arrival of COVID in early 2020—and the fear of super-spreader events it engendered—dealt another blow to the prospect of a big in-person bash.
As for the federal commission, it swiftly descended into a morass of charges and countercharges over process, favoritism, hiring, gender discrimination, and budget decisions. In June 2022, Meta pulled out of a $10 million sponsorship deal, reportedly owing to the commission’s “leadership dysfunction.” Around the same time, several female executives quit the commission and filed suit. They described a Gilded Age level of “cronyism, self-dealing, mismanagement of funds, potentially unlawful contracting practices and wasteful spending”—not to mention sex discrimination and a toxic work environment. In the midst of the meltdown, the Biden White House stepped in to appoint Rosie Rios as the new commission chair. By then, the clock was down to less than four years.
One of the federal commission’s signature initiatives, America’s Stories, is radically decentralized—less a top-down master plan than a national Instagram feed. Its website encourages Americans to send in personal reflections about the country’s past, present, and future in the form of songs, poems, personal essays, photographs, audio recordings, and videos. The stated goal is to create “the most inclusive commemoration in our history,” one in which “no story is too small” to matter. Rios views the emphasis on social media, as well as on diversity of experience, as a way to attract constituencies that might otherwise look elsewhere—notably young people, who often seem to think that the past has little to offer.
R. Scott Stephenson, the CEO of Philadelphia’s Museum of the American Revolution, describes the federal strategy as a “StoryCorps model” of historic commemoration. He worries that such a decentralized approach won’t rise to the moment. “If it’s just about everybody telling their story,” he asks, what’s to bring everybody together? His concerns are echoed by many in the public-history sphere. At the moment, though, almost nobody sees any prospect for a single big in-person celebration reminiscent of the extravaganzas of the past.
Nobody, that is, except for Donald Trump. Alone among major political figures, Trump has seized the early momentum to offer a grand, centralized semiquincentennial vision. In May 2023, he released a campaign video introducing the idea of a Salute to America 250, the “most spectacular birthday party” the country has ever known. Though billed as a serious celebration of the world’s oldest democracy, the plan contains no shortage of reality-TV touches. One proposal is a Patriot Games, in which high-school athletes would be pitted against one another in interstate Olympics-style competition. Another is the National Garden of American Heroes, a long-standing pet project in which Trump hopes to select “the greatest Americans of all time” to be honored in a Washington statuary park. The centerpiece of the celebration would be the Great American State Fair, an 1876 expo-style gathering to be held in Iowa. “It’ll be something!” he promised.
The video’s release produced plenty of critical commentary from MAGA skeptics. But, to paraphrase Trump, the Great American State Fair would at least be something: a focused, national, in-person commemoration with a clear message about where the country has been and where it is going. Whatever its other virtues may be, the individualized, localized, “invitation” approach evades any such nation-defining mission.
The problem is, many Americans don’t know what they’d be celebrating. On the left, rejecting traditional patriotism has become de rigueur: by kneeling for the national anthem, dismissing the Founders as enslavers, and expressing unease at the prospect of flying an American flag. Seeing left or liberal activists deploying the images and ideas of the revolution for their own purposes is far less common than it used to be. One consequence may be that many people who care about a critical, nuanced view of the American past will simply opt out of 2026. If that happens, who will be left in charge of defining what founding-era ideals such as “independence,” “revolution,” “We the People,” and “the general Welfare” are supposed to mean in the 21st century?
The task of identifying a usable past is of course much easier for Trump and his MAGA coalition than for those who seek a true reckoning with the country’s history of injustice. Trump has a clear view and a simple message: that only certain people count, that the past was better than the present, and that U.S. history was a tale of triumph until roughly the 1960s.
Trump’s views are embodied in the work of a group called the 1776 Commission, appointed near the end of his presidency. Its creation (and name) was partly a reaction to The New York Times Magazine’s 1619 Project, with its emphasis on slavery and the Black experience. It was also a bid to put the Trump stamp on the founding legacy. “As we approach the 250th anniversary of our independence, we must resolve to teach future generations of Americans an accurate history of our country so that we all learn and cherish our founding principles once again,” the commission’s report stated—at the same time promoting its own exclusionary and distorted vision of the past, one in which the Founders would obviously have opposed progressive social policy, affirmative action, and all forms of identity politics.
Professional historians have scorned The 1776 Report as right-wing propaganda rather than anything resembling actual history. But scholars have often hesitated to offer an alternative national narrative in its place. By and large, they do not view themselves as being in the business of nationalism or patriotism; their mission is mostly to tell the truth as they see it. Within academia, the nation-state is itself often seen as a suspect form of social organization and power with a dubious track record.
But in this moment of democratic crisis—and democratic possibility—there is something dissatisfying about sidestepping the challenge of 2026, with its implicit call to create a usable but thoughtful national narrative. During Trump’s term in office, the historian Jill Lepore chastised fellow academics for abandoning the project of a national story just when it was needed most. “Writing national history creates plenty of problems,” she argued. “But not writing national history creates more problems, and those problems are worse.”
Coming up with an honest but coherent vision for 2026 is a genuine challenge. For the past 60 years, much of American historical scholarship has been about exposing a darker story behind self-congratulatory myths. As a believer in that effort, I have long shared the left’s ambivalence about patriotic symbols: the flag, the Founders, the national anthem, the Fourth of July. Today, though, I feel an urgency to reclaim and redefine all these things, lest they be ceded to those darker forces historians like to write about.
[David Waldstreicher: The Fourth of July has always been political]
The fact is, Americans have a pretty good origin story, as such things go: centrally, a revolution on behalf of human equality, despite all of its flaws and blind spots and limits. “On the subject of equality,” the political theorist Danielle Allen has argued, “no more important sentence has ever been written” than Jefferson’s assertion that “all men are created equal.” For its moment—and even for ours—it was a bold and revolutionary statement.
Movements for equality, racial justice, and human rights have long taken advantage of that legacy. The abolitionists of the 1830s invented the Liberty Bell as a symbol of human freedom, seeing in its inscription to “proclaim liberty throughout all the land” a useful link to both the past and the future. The labor radicals of the late 19th century claimed Jefferson and Thomas Paine along with Karl Marx and Friedrich Engels. Finding a stake in the American story has always been more difficult for those deliberately excluded from the Declaration’s vision: women and sexual minorities, Black communities, Indigenous nations. In 1852, Frederick Douglass delivered his famous address asking “What to the Slave is the Fourth of July?” His answer was that it marked a day of mourning, not celebration. Still, Douglass seized the moment to pressure white citizens to live up to their “saving principles,” noting that the Founding Fathers understood that “there is always a remedy for oppression,” even if they did not follow that insight to its logical conclusion.
What we are witnessing now, with respect to America’s 250th, is thus a strange turn of events. To varying degrees, abolitionists, suffragists, labor leaders, and civil-rights activists were willing and able to harness America’s mythic rhetoric and stated principles to advance their causes. They embraced and invented cherished national symbols. And yet today, many who profess to believe in human equality and social justice seem to have little use for the American origin story and its most venerable words and figures.
Why not reclaim them? The American revolution was, after all, a revolution—not in every respect the one you or I might have wanted, but an enormous stride toward equality. And revolution itself is an inherently malleable concept, made to be renewed and redefined with each generation. One need not wear a tricorne hat or fly the stars and stripes in order to celebrate the unlikely moment when a group of private citizens organized, dreamed big, and defeated the world’s most powerful empire.
Though, now that I think of it, why not wear the hat and fly the flag? Despite today’s political optics, neither one actually belongs to the devotees of MAGA rallies. Perhaps those on the left can at least seize the moment to open up the conversation over what, if anything, really makes America great—and to teach some actual history. If they don’t, the meaning of 2026—and of American patriotism—will be decided for them.
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After former President Donald Trump’s surprise victory in 2016, his administration imposed several rounds of tariffs on China on everything from washing machines to steel. The move was described by the nonpartisan conservative organization the Tax Foundation as one of the “largest tax increases in decades.” And yet, protectionist economic thinking has since gained traction in both parties. In a rare instance of agreement, President Joe Biden retained most of his predecessor’s tariffs—and imposed even more earlier this year.
Treasury Secretary Janet Yellen described her own evolution on this topic succinctly: “People like me grew up with the view: If people send you cheap goods, you should send a thank-you note. That’s what standard economics basically says … I would never, ever again say, ‘Send a thank-you note.’” Essentially, Yellen used to think that if China wanted to flood the United States with cheap goods, why complain? Well, now she appears more concerned about the cost of all those cheap goods to the nation’s domestic manufacturing base.
On today’s episode of Good on Paper, I’m joined by the Cato Institute’s vice president of general economics, Scott Lincicome, to examine this popular narrative—one that he doesn’t put much stock in, largely because the high cost of tariffs are disproportionately borne by poorer people, but also because of the political dysfunction they sow:
“The economics of trade are counterintuitive,” Lincicome explains. “And so tariff policy is notoriously corrupt. And so there’s a lot of political dysfunction, along with just hiring all those lobbyists to get special tariffs or special exemptions. But also, it’s just a very politically perilous policy.”
The following is a transcript of the episode:
[Music]
Jerusalem Demsas: There was an interesting policy exchange about tariffs between former President Donald Trump and Vice President Kamala Harris during their debate last month.
Kamala Harris: My opponent has a plan that I call the Trump sales tax, which would be a 20 percent tax on everyday goods that you rely on to get through the month. Economists have said that that Trump sales tax would actually result, for middle-class families, in about $4,000 more a year because of his policies and his ideas about what should be the backs of middle-class people paying for tax cuts for billionaires.
Demsas: Then Trump hit back, pointing out that the Biden-Harris team had been all too happy to keep the tariffs going.
Donald Trump: First of all, I have no sales tax. That’s an incorrect statement. She knows that. We’re doing tariffs on other countries. Other countries are going to finally, after 75 years, pay us back for all that we’ve done for the world. And the tariff will be substantial in some cases. I took in billions and billions of dollars, as you know, from China. In fact, they never took the tariff off, because it was so much money, they can’t. It would totally destroy everything that they’ve set out to do. They’ve taken in billions of dollars from China and other places. They’ve left the tariffs on.
Demsas: This exchange flew by many people. There was a lot going on in that debate, and this happened in the first few minutes. But Trump is pointing out something interesting here—that while Harris is calling his tariffs a sales tax, she and Biden kept the majority of his tariffs when they came into office.
Looking back on 2019, Biden had similarly criticized Trump’s trade policy, arguing at the time that “any freshman econ student could tell you that the American people are paying his tariffs.”
While I think it’s important to highlight this similarity, it’s also important not to overstate it. Trump is now promising a 60 percent tariff on goods from China and a 20 percent tariff on everything else the U.S. imports. And in a speech last week, Trump said he’d “impose whatever tariffs are required—100 percent, 200 percent, 1,000 percent.” This is far greater than anything Biden or Harris have publicly considered.
[Music]
Demsas: Welcome to Good on Paper, a policy show that questions what we really know about popular narratives. I’m your host, Jerusalem Demsas, a staff writer here at The Atlantic. And today we’re talking tariffs, trade, protectionism, and more.
The standard economic narrative around tariffs is pretty negative. As my guest today has explained in a quip now famously memorialized on a novelty T-shirt: “Tariffs not only impose immense economic costs but also fail to achieve their primary policy aims and foster political dysfunction along the way.” It’s a busy shirt.
Scott Lincicome is the vice president of general economics at the Cato Institute and has written broadly, including here at The Atlantic, about why the parties shouldn’t be so quick to embrace tariffs.
[Music]
Demsas: Scott, welcome to the show.
Scott Lincicome: Well, thanks for having me.
Demsas: We’re going to talk about tariffs today, so I’m going to start with the simplest question: What is a tariff?
Lincicome: A tariff is a tax applied to an imported product, usually a good but, in theory, you could try to apply tariffs to services, as well.
Demsas: What kinds of things that people commonly buy have tariffs on them in the United States?
Lincicome: I think one of the most common examples we use is pickup trucks. In the 1960s, there was a dispute with the Europeans over chicken, of all things. That led to a tax on pickup trucks—
Demsas: Wait. Wait. Wait. Slow that down. How do we get from chickens to pickup trucks?
Lincicome: They were going after our chickens, so we put tariffs on their pickup trucks, and they stayed. Now we still have a 25 percent tax—tariff—on imported pickup trucks from everywhere except a few free-trade-agreement countries, like Mexico. So one of the reasons why we don’t have some of those cool little pickup trucks that you might see in Japan or whatever is because they’re subject to really ridiculous tariffs. And automakers abroad don’t want to have to deal with all the regulatory compliance and that kind of stuff and then pay another 25 percent tariff.
It’s actually a great example of the things that tariffs do beyond just raising prices. They limit availability and consumer choice, and they stick around forever. We have tariffs on the books on shoes and clothing and other things that go back to the Smoot-Hawley days. They’re really hard to remove once you get them into place.
Demsas: You just said something interesting. Who pays the tariff?
Lincicome: It’s a little complicated. Legally, the importer in the United States, in almost all cases, is paying the tariffs. If you are a U.S. company and you are importing stuff, you’re going to be paying the tariff, by law. There’s a little exception to that, but we don’t need to worry about that. The more complicated thing comes in who actually pays, because, in theory, a foreign exporter can lower his price to essentially absorb the tariff costs.
Let’s say you’re shipping widgets into the United States, and they’re $100. All of a sudden, a 25 percent tariff gets attached to it. You have, really, two basic choices: still sell at a hundred and have the importer pay $25 (25 percent of a hundred), or you lower your price to 80 and then have the importer pay $20 in tariffs. But to the importer, it’s all the same thing, right? It’s still $100. So the tariff hasn’t changed the calculus. In that sense, the foreign exporter is bearing the incidence of the tariff.
Then we have the empirical question. So the empirical question is: What actually happens? Well, what actually happens is, in the vast majority of cases, importers and consumers pay the tariffs. You only have a situation where foreign exporters pay tariffs when the market that the foreign exporter wants to sell into is just massive—really important—and the exporter says, You know what? I just want to maintain market share, so I’m going to lower my prices.
Typically, that’s not what happens. Typically, the consumer, the importer is going to pay the tariff. It might not be a hundred percent; the exporter might discount by a few bucks here and there. But, overall, as an empirical matter, typically consumers, importers pay. And that was certainly the case with the Trump-era tariffs on steel and aluminum and Chinese imports. Studies show that about 95 percent of the tariff incidence fell onto American companies and consumers.
Demsas: And so as any listener listening to this can tell, you don’t really like tariffs. Economists, in general, don’t really like tariffs. Why is that? Can you walk us through the standard economic story for why tariffs are bad?
Lincicome: I’ll start out with saying that economists are okay with tariffs in certain contexts—national security, for example. There’s a legitimate case that the United States—I’d say, a strong case the United States—shouldn’t be buying its tanks and planes and laser-guided missiles from China, that tariffs can serve a role there.
But economists don’t like tariffs for a few reasons. First is that they’re costly. A tariff is a tax. It’s a tax typically borne by consumers and importers. Those consumers and importers typically are poorer, so it’s a regressive tax, meaning: More burden is paid by poorer people. They spend a larger share of their incomes on, say, tariffed bananas or whatever.
But the second reason is that they are very inefficient taxes, meaning—so good tax policy is: You want a very broad base, and you want it to be very transparent, and you want to minimize gaming and other things that can poke holes and make the tax less distortionary.
A tariff doesn’t qualify for anything I just said, right? It’s applied on a narrow set of products. It’s very opaque. Unlike a sales tax, you don’t get a receipt on that pickup truck that says, Oh, you just paid an extra 25 percent for this, right? It’s subject to all sorts of gaming because tariffs will vary, typically, based on the type of products. You get what’s called tariff engineering, where you’ll classify—I’ll go back to cars. There’s a famous example: Ford vans were imported without seats to get a lower tariff, and then, literally at the docks, they installed the seats and then drove them off to the warehouses. So it’s a really distortionary and inefficient way to raise revenue or do anything else you want to do with them.
The other big thing, though, is that they’re pretty ineffective at boosting the companies that are getting protected and the workers that are getting protected. For example, I mentioned we have tariffs on shoes. Some of them are ridiculously high, more than 34—almost 40 percent. We have not saved any shoe jobs in the United States. We have almost no jobs in shoe manufacturing. You basically are just having consumers pay a tax for little to no good reason. And in case after case after case, what you see is: Most companies that are protected by tariffs either end up going away after the tariffs are lifted, or they’re seeking perpetual protection, right?
The other big thing is that tariffs, by insulating companies from competition, discourage them from innovating. If you have a guaranteed market, you’re probably not going to be hyper-focused on staying lean and mean and really focused on delivering the best value to your customer. You will get fat, lazy, and happy. You’ll spend a lot of money on lobbying to maintain the tariffs, less money on being productive.
For example, U.S. steel. So there’s probably no industry in the history of the United States that has received more protection than U.S. steel. It’s definitely on the Mount Rushmore of protectionist industries. And U.S. Steel is notoriously inefficient, in part because of that protection. It’s now trying to be bought out by Nippon Steel, a Japanese company. And the goal to—supporters of that deal, including U.S. Steel, by the way, say that Nippon Steel will help it innovate, provide it with better management practices, an influx of capital to upgrade its services.
So put that all together, and economists say, You get high cost, you don’t achieve your objectives, and this is pretty bad. And then you throw in—the historians have looked back at tariff history, especially in the 19th century but even most recently. And tariffs are really historically associated with corruption and cronyism. And that goes back to them being kind of a hidden tax. Also, they target foreigners, and that makes it easier to sell. The economics of trade are counterintuitive. And so tariff policy is notoriously corrupt. And so there’s a lot of political dysfunction, along with just hiring all those lobbyists to get special tariffs or special exemptions. But also, it’s just a very politically perilous policy, as well.
Demsas: You said a lot there. And I want to dig in on a few of these things, but I think as a broad overview, obviously, the idea is: You have to do a benefit-cost analysis of tariff policy. And you’ve obviously articulated a lot of reasons why there are high costs to tariffs, but, as you mentioned with national security, for instance, there are a lot of noneconomic things that policymakers are concerned with that they may want to use tariffs for. And so you think about the implications of what tariffs are trying to do, and often there’s this goal of, We want to spur some sort of industry in the United States. Often, it’s domestic manufacturing, right? You kind of asided to that with the shoe example.
But there’s a history of this, right? Actually, last week, we just had on the show Oliver Kim, who was talking to us about the East Asian development miracle. And one thing that a lot of East Asian countries are credited with doing is having protected native industries and ensuring that those industries were able to succeed on the world market. And there was a lot of protectionism that was involved in doing that, including tariffs.
And so what I guess I would ask you is, firstly, do you feel like that is a goal the U.S. government should have of trying to spur domestic manufacturing? Do you think that’s an important goal?
Lincicome: No. At least not via tariffs. I think there is a million things that the United States government could be doing to boost the manufacturing sector. I should note, of course, the United States is the world’s second-largest manufacturing nation in terms of output, in terms of productivity. So the stuff we make per worker—we’re absolutely crushing it. No. 1 in the world, basically, for large, industrialized nations, so it’s not like the United States is this weak, nothing-burger nation when it comes to manufacturing.
But that aside, there’s a couple caveats I think you need to include when you talk about Asian protectionism and industrial policy. First is: That came with a lot of free trade too. While, certainly, there was some protection for certain industries, there was also a lot of exposure to competition in export markets, in particular, but also in import markets. And, though, there was a lot of tariff liberalization for the things that manufacturers they were trying to support—that they needed. So it wasn’t this just blanket protectionist policy.
The second big thing, though, is that there is a bit of a correlation-versus-causation thing in a lot of East Asian industrial-policy narratives because they were doing a lot of other stuff at the exact same time. And there’s a great book by Arvind Panagariya, who actually looks at South Korea and Taiwan and others and says, Actually, these economies performed better when they weren’t being protectionist—when they weren’t engaging this heavy-handed industrial policy—than when they were. So we need to be a little bit cautious there.
But the third, and I think the most important one for the United States, is that the East Asian miracle applied to a radically different economy than the one in the United States in two big ways. One: Those were developing countries really trying to push infant industries, whereas most U.S. protection is—I mean, the U.S. is certainly not a developing economy. We’re a very developed economy. And most of our protection actually goes to lagging industries. It is not on the cutting edge, and one of the reasons—we have a lot of cutting-edge stuff. But typically, our protection goes to, again, shoes and steel and stuff like that—legacy industries.
But the other thing is that the United States has far-more-developed capital markets than Asian economies did—very open, very fluid. And that means we have much-more-efficient investment where there might be the potential for that success and that innovation. And so it’s less likely that government planners in the United States are going to be able to pick the right industries, pick the right companies, pick the right whatever, as opposed to capital markets and VCs and private equity and all that great stuff. And in general, though, it’s just a radically different environment than what existed in, say, South Korea in the 1970s.
Demsas: But then let’s take a look at the CHIPS and Science Act, for instance, right? That’s the 2022 law Joe Biden signed to bring semiconductor manufacturing to the United States. So during the pandemic, there’s a real concern about semiconductor chips, that we’re not going to be able to have as many. There’s obviously this big shortage. We’re really reliant on Taiwan, which is, of course, concerning because of its proximity to China and the threat that China poses to Taiwan’s freedom.
It’s clear that there is a need to produce, at least in—if not domestically, we need to “friendshore.” We need to make sure can get those supplies from ally countries that we’re less worried about having some kind of future political risk with, but also just domestically because there might be supply-chain problems in the future that are unprecedented, like a global pandemic that we had not been expecting.
And so the CHIPS Act is an industrial policy where there is a real push to get chips made here in the United States. We have factories opening up. I believe they are already producing chips. There’s an Arizona factory.
Lincicome: Yeah. TSMC is not quite up yet.
Demsas: Okay. Not up yet. But basically, we brought Taiwanese expertise to the United States, and they’re building here. We have American jobs that are being created here. And you may care about parts of that or not, but that seems like a policy where that’s on the cutting edge. It’s not confusing to make these chips, but it is a cutting-edge technology. It’s not a legacy industry. So how do you view the use of protection there?
Lincicome: Yeah. Two things: One is that it’s really important to start by noting that this CHIPS Act is subsidies and not tariffs. Now, Biden just imposed some tariffs on semiconductors from China but, in general, the CHIPS Act is just about throwing money at companies.
In general, if you’re going to ask an economist, What would you prefer: a domestic subsidy or a tariff? they’re going to say, A subsidy, nine times out of 10, right? That’s important because you’re at least—granted you’re subsidizing the production, but you’re at least—once the company gets up and running, going to be subjecting it to market forces and competition and its production and output and the rest. You’re not going to be artificially raising prices for downstream consumers and that kind of stuff. So a subsidy is definitely preferable to a tariff.
And in fact, we actually applied tariffs to semiconductors in the 1980s. We had a big industrial policy push in the ’80s related to chips, Japanese memory chips. We applied a bunch of different tariffs, any dumping duties. There was a trade agreement restricting Japanese semiconductors. And what happened? Well, it raised the price of semiconductors and pushed computer manufacturers offshore from the U.S. computer manufacturers. So tariffs, again—historically not very good at achieving your objectives.
But the other thing with the CHIPS Act is: It is starting to reveal some of the problems with industrial policy that we saw back then too. For example, back then, we actually picked—we, the government—picked the wrong type of semiconductor. The Department of Defense in the ’80s thought memory chips were going to be the big innovative thing of the future. So we targeted memory chips. Well, it turns out that the entire industry was actually moving towards logic chips, which are what we use today. And the government totally missed that, while imposing all of those costs.
Right now, we might have a bit of a similar situation because you mentioned TSMC—and TSMC is a global leader. Okay. Cool. But also, the biggest subsidy recipient was Intel. Intel is our national champion. Intel is struggling like crazy.
Intel is slated to receive as much as $45 billion in total subsidies because the CHIPS Act had grants, loans, and tax credits. So Intel is really in trouble.
So did we, once again, pick a loser, along with TSMC? So that’s, I think, a concern we have to deal with. And that’s a traditional issue with industrial policy. Now, why did Intel get all that money? Well, Intel is an American company. Intel has an army of lobbyists in Washington, was instrumental in getting the CHIPS Act passed. Intel decided to locate its facilities in Ohio, a politically important place. And thus, there are questions about whether the government should, again, be giving $45 billion taxpayer dollars to a struggling company like Intel.
Demsas: You’re pointing out a glut of good reasons why it’s not the most optimally efficient policy. But it seems obvious to me, at least, that it’s important for us to make semiconductors here or at least friendshore them. Is there an alternative way to do this?
Lincicome: Yeah. Sure. Well, let me say one more thing about TSMC’s [fabrication facility], and then we’ll move onto your question. The other problem—and the thing I’m worried about—is that we’re actually not subsidizing bleeding-edge technology. TSMC’s fab that’ll be up and running next year is going to be very small, relative to its factories in Taiwan, and it’s not going to be producing the tippy-top-most innovative chip. It’s going to be producing four-nanometer chips instead of the industry two.
It’s also insanely costly. Apparently, it’s costing about 50 percent more to build. And then, of course, a lot of other chip companies that aren’t TSMC are getting money, too, and not just Intel. And they’re getting money to produce what we call legacy chips. So these are clunky commodity chips that really have no security or even, really, innovative nexus. So I think we should be concerned. I don’t know the answer yet. You know, it’s still early in the ballgame, but there are some warning signs.
Now, what could we do instead? A lot, because the big reason why companies weren’t producing a lot of chips here—although that’s a bit of a myth. About half of all chips consumed by American companies were still made in America before the CHIPS Act. But beyond that, we did lose some bleeding-edge capacity. Now, why did that happen? No. 1 reason is because of Intel. Intel was at the frontier and then totally botched it at 10 nanometers and has just become extremely behind the curve. So it’s just a corporate decision-making thing, nothing related to industrial policy.
But the other big reason is because it costs a darn fortune to build a semiconductor facility in the United States. Now, some of that is just because we’re the United States. Things are more expensive than in a developing country. But a lot of it is permitting issues and materials issues and immigration issues. The semiconductor industry is one of the most immigrant-dependent industries in the United States.
So tax issues, as well—we tax the construction of large structures at a much higher rate than we tax things like software and the rest. So you combine all these things, and there’s a free-market path to encouraging the onshoring of large manufacturing facilities, whether it’s semiconductors or anything else, and you could have tax reform and immigration reform and trade reform. Maybe we don’t put tariffs on construction materials and steel and everything else. So that’s a big part of it.
And to the extent even that didn’t do the job, then you could see a role for the government to provide a targeted subsidy for national-security-related chips, so things our Defense Department needs or the tippy-tippy-bleeding-edge stuff that we need for, like, government supercomputers and the rest. But we didn’t get that. You know, that’s maybe a $5 billion bill. And, instead, we got this $60 billion—and then plus another $200 billion in potential tax credit—slush fund that just goes to anything and everything. So I think that’s a problem. And that’s a problem with industrial policy. What starts out as maybe a decent idea on paper just morphs into kind of a political albatross.
Demsas: The only argument that I’ve seen that defends broad-based tariffs—because very few people will defend the, like, 60 percent tariff on goods from China, 20 percent on everything else the U.S. imports. I don’t think we even grow bananas. Even stuff we don’t actually make, no industries—coffee, stuff like that.
But the one argument I have heard is that, while you don’t see increases in domestic manufacturing from these smaller tariffs, if you were to do this really broad-based tariff, it would just force industries to invest in the American economy, because American demand is just both lucrative but also, it would just reshape how capital markets thought about where to invest in companies. It would reshape the kinds of entrepreneurship that would happen, because now we do have to figure out how to satiate this American demand that they’ve been priced out of buying these cheaper goods from abroad.
So setting aside the question about whether or not that would be good for the American consumer to have to now pay double or triple or whatever it is for these basic goods, why wouldn’t that work? Or what do you think would happen in a world where you actually saw these massive tariffs? You can go even higher. Like, you can say 60 percent tariffs on all goods outside the United States. What would actually happen here?
Lincicome: Yeah. So basically North Korea, right? And I joke, but the reality is that tariffs also come with a deadweight loss, an economic loss in terms of economic growth and the rest. Yes. The United States is a big, diverse country with a very productive workforce and a lot of smart people and wonderful capital markets. But if you started imposing giant tariff walls, you’d have a few problems—the biggest being slower economic growth.
By pushing workers into less productive industries, you would effectively be ensuring that the workforce, as a whole, is less productive. That means lower wages, less innovation outside of the sectors you’re targeting, right? You would push a lot of workers and resources into lower-value production. And let’s just leave aside the fact that you’d need giant greenhouses for bananas and stuff like that. We’ll leave that out.
Demsas: Or we just don’t have bananas. No bananas. Yeah.
Lincicome: Right. Heaven forbid. But I do think that’s the other thing that you would have to also consider. You would not just have lower economic growth and slower wages, but I think non-financially, it’d be a lower quality of life. And the grocery store is a wonderful example of that. I can remember back in the 1980s, the grocery store was not nearly as incredible as it is today. And a lot of that, today, is owed to open trade, globalization. And you would lose some of that. You would lose the variety and some of the things that make our lives richer. And I don’t just, by the way, mean bananas. And I don’t just mean food, although that’s a big one.
We have this big globalization series going on. And we talk about fashion and film, and you can go down and on and on down the list. And there’s a lot of aspects of trade and open markets that make our lives fuller and richer in ways that aren’t just about where we’re working or how much we’re making, right? And so that would mean a little less, if not a lot less, of that too. I mentioned at the beginning those cool European and Asian pickup trucks we don’t get. Well, we wouldn’t get those either. We would just have fewer varieties of those things, even if, let’s assume prices are a little bit higher. Sure. But we just also wouldn’t have the variety.
Demsas: I agree with you on this, but then it also gets to a point where sometimes I’m talking to people, and I realize there’s a difference in value. Some people don’t care about this, or they think it’s less important. They think that if we could get more manufacturing jobs in the United States, then it’s okay for us not to have bananas. It’s okay for us not to have a great variety of trucks. Is that stuff important? And I wonder, doesn’t this fall then down to political value judgment about what kind of world looks best?
Lincicome: Yeah—yes and no, because I think if you started saying things like, Well, would you accept less medical innovation? Would you accept less scientific innovation outside of that? because resources are finite—so I think that if you gave people the fuller picture of the price of autarky, I think they would recoil. Particularly if you added things like, And also, your 401(k) is going to be smaller. Your houses are going to be smaller, there’s going to be less resiliency, not more.
You might remember the baby-formula crisis, right? Well, we made all baby formula in the United States, except—because of protectionism. We had walls— tariff wall, non-tariff wall—around the country. Ninety-eight percent of baby formula consumed here was made here. We had a one factory closure, and the entire supply chain collapsed for a year. So you would have actually a more brittle economy than a more resilient one. We would not, at the end of the day, enjoy the much lower living standards, overall, just because we had a few more manufacturing jobs that people don’t even want.
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Demsas: We’re going to take a quick break. More with Scott when we get back.
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Demsas: Something you mentioned earlier on I always think is interesting is: The connection between tariff loving and immigration hating I always find very bizarre. We’re at low unemployment right now, so if you’re trying to spur more people to work in domestic manufacturing, it means you’re moving people out of other industries to work towards manufacturing. And if you have the kind of broad-based tariffs that are being proposed by the Trump-Vance ticket—I mean, they’re proposing, like, 60 percent on goods from China and up to 20 percent on everything else from the U.S. imports. These are massive, massive tariffs.
That sort of thing means that you’re going to have the U.S. producing a ton more of the goods that Americans consume. And that would indicate that you would want more people coming here and working here. But at the same time, they’re opposed to immigration. So why do you think the anti-immigration and pro-tariff sentiments have gone hand in hand? They’re trying to deport millions of people too. I forgot about that.
Lincicome: Nationalist sentiment, right? Look—I don’t think there’s a lot of logic or coherence in most economic nationalist arguments. And I think this is just a great example of it, for the reason you said, right? This isn’t 2014 anymore. Native-born employment has flatlined. We are an economy that needs more workers if it wants to grow at the rates we have grown accustomed to in the past. And that means we’re going to need just warm bodies. Just in terms of warm bodies, we’re going to need more of them. And obviously, immigration is a great source. I mean, babies are great, too, but they take at least 18 years to become workers, right? So we can’t do that tomorrow—at least, not that I’m aware of. I don’t know what the science is doing—
Demsas: Latest technology? I think it’s still 18 years.
Lincicome: Right. So we’re going to have a while on that. So immigrants are the obvious source for, you know—if we’re going to be making toasters in America again, like J.D. Vance wants, we’re going to need workers to do that. And robots are great, but robots can’t fill the gap entirely, particularly, again, in the near term. So there’s a huge disconnect there.
And the other thing I’d note is that native-born Americans, in general, just don’t want to work in manufacturing. And this is something totally missed. We at Cato did a very expansive poll over the summer, asking people all sorts of questions. One of the questions we asked was a two-parter: One, Do you think the U.S. should have more manufacturing jobs? And it was, like, 80 percent yes. Yes. More people should work in manufacturing. Then we said, Do you want to work in manufacturing? And it was, like, 20 percent said yes. It’s almost the exact flip.
There was a great article in Bloomberg a couple of years ago about furniture manufacturing here in North Carolina, talking about how they can’t find workers. And this was pre-pandemic, so it’s certainly gotten worse since then. You look at—the textile-manufacturing jobs in South Carolina pay $11 an hour to start. These are not the glamorous jobs that a lot of our politicians think they are. So to the extent we want these jobs in the United States, I am ambivalent. I want the market to determine that. Big surprise. They’re just going to have to come to the reality that we’re going to need more workers to do that. And, again, immigration’s the source.
But there is another thing that I think the nationalists miss entirely, is that free trade actually can help reduce some of the immigration pressures in places like Central America, for example, because it’s going to boost the local economies and boost the stability of these places. Because a lot of immigration is that push-pull, right? People are living in terrible places. They’re like, I got to get the heck out of here. But also, the U.S. economy’s pulling them in. So to the extent that a trade agreement—and allowing companies to access the U.S. market to sell us shirts and stuff like that—can actually boost the local economies in places like, say, Guatemala, that’s going to actually reduce some of that push pressure on immigration, legal or otherwise.
And there’s a fantastic study that actually showed everything I just said, most recently, and it said that you could reduce illegal border crossings by several hundred thousand if you had truly free trade with Central America for textiles, for the reasons I just described. So is that a panacea for the border issues? No. But would it help? Yes. And it is completely lost on our anti-immigration, anti-trade folks, the idea that trading more with places would actually reduce some pressures for more immigrants. They just want no trade and no immigrants, which just doesn’t make a lot of sense.
Demsas: I want to get into some of the reasons for why tariffs haven’t been able to increase domestic manufacturing. There’s a really great study. Aaron Flaaen and Justin Pierce at the Fed—I hope, Aaron, I’m saying your last name correctly. I apologize if not. And they had this study where they looked at the Trump tariffs—the 2018, 2019 tariffs—and they find that the U.S. industries most exposed to tariff increases experienced reductions in employment.
And they also find that counties more exposed to rising tariffs show increases in unemployment—more people are unemployed in counties that are more exposed to rising tariffs—and, of course, declines in labor-force participation. So people are just exiting the labor force entirely there. Why is that happening? Because why is even this narrow case of tariffs—they’re big tariffs, but they’re nothing like they’re being proposed now—why did that not improve domestic manufacturing?
Lincicome: Right. For the moment, let’s just leave aside that the vast majority of us work in services. And if you work in services, you’re basically hurt by tariffs, regardless of anything.
Demsas: Okay. This is one of my hobbyhorses, that whenever everyone talks about the working class, we pretend like everyone’s a manufacturer, but really everyone’s in the service industry, and it’s like, No one cares about those people. McDonald’s? Don’t care about them. It’s just bizarre.
Lincicome: It’s crazy. Even for male-dominated professions—because we’re all worried about men not working and stuff—there are four times as many male-dominated, blue-collar jobs in services than there are in manufacturing. And we never talk about any of it, like you said. Whether it’s construction or security or repair, like automotive repair, you name it, there’s tons of jobs. Nobody talks about them. But anyway, we’re going to ignore all of those folks.
Demsas: Just like our political leaders.
Lincicome: Right. We’re going to ignore them. Sorry. Sorry, folks. We can get back to them later.
Manufacturing—there’s three big reasons why tariffs actually harm American manufacturing. The first is that American manufacturing today is very much global. About half of everything we import into the United States is actually stuff used by American manufacturers to make other stuff—things like steel or machinery and semiconductors. The huge example of that is: The most advanced semiconductor-production technology comes from the Netherlands.
We import that equipment to support semiconductor production in the United States, right?
Demsas: These are intermediate goods.
Lincicome: Yeah—intermediate. Oh, look at you! Nice. Yes. Exactly.
Demsas: (Laughs.)
Lincicome: When people use trade wonky terms, I’m always impressed. That’s great.
So all these intermediate goods—you raise the price of those goods, which tariffs do, and you raise costs for manufacturers. That means those manufacturers spend less on employment and investment and the rest. You’re just raising their costs. It’s like a corporate tax but only for manufacturers that consume imports, which, again, is most of them.
The second big channel is the export side, and that is through retaliation. Foreign governments typically don’t just sit there after a tariff is imposed on products they’re exporting and say, Oh, you got us. We’re toast. No. They retaliate. And they retaliate because they have their own domestic political considerations. They have strategic considerations about preventing even more tariffs. So that harms American manufacturers that export—American manufacturers that are already hurt because they’re facing higher import costs. So those companies are getting hit two ways: higher input costs and retaliation.
The third channel is currency, and I won’t get into the weeds, but tariffs tend to increase the value of the domestic currency. So the dollar gets stronger. As the dollar gets stronger, there’s a good thing: That means that imports get a little cheaper. So it’ll offset some of that tariff pain. The bad thing is that it makes exports more expensive, and anybody who’s gone abroad and has a really strong dollar knows you can buy a ton abroad. That’s actually an import. You’re getting cheap imports. But if the dollar gets really weak and you go abroad, it’s the opposite. So just kind of think of it—it’s kind of those mechanisms, right?
So those three channels, effectively, eliminate any benefit that manufacturers might get from tariff protection. And thus, like you said, the literature tends to show that countries with higher tariffs don’t have wonderful trade surpluses or burgeoning manufacturing industries. And in the United States, the empirical research from the Trump era shows much the same thing.
Demsas: You’ve talked about the narrow cases in which tariffs make sense to you, which I think, largely, is around national security. But I think once you accept that logic, then it just becomes a political question about what things people value, right?
There is this sense that people really care about protecting the manufacturing legacy of specific areas in the United States. And this is, I think, a legacy of 2016, when a lot of people were surprised by the victory of Donald Trump to the presidency. There was a lot of indexing on the fact that he won Wisconsin, Michigan, and Pennsylvania and seeing that this narrative—that he really spoke to the white working class who had been disaffected by free trade.
And this, of course, is right when the “China Shock” paper is becoming really central to the discourse. And so there’s a level here where I wonder if there’s a political-narrative thing that’s going on here, too, where, regardless of all the stuff that we’re talking about, if people want to win national elections, is this just necessary?
Lincicome: No. I’m a firm believer that a lot of what’s going on with our protectionist moment right now is political. The conventional wisdom in Washington today is that, to win national elections, you need to win a handful of gettable votes—so Obama–Trump voters, basically, people who flipped—in a handful of important places, mainly in the industrial Midwest. And to win those votes, you need to offer lots of protectionism and industrial policy too—manufacturing-centric policy.
And I think that is the reality—the conventional wisdom is. I think that is the case. I don’t necessarily agree with it, but I’m not a political consultant, so I won’t dare to question it. And there was a good paper recently by Autor, Dorn, and Hanson, another person—the “China Shock” authors—that said that Republicans did gain a little bit in places, thanks to the tariffs. Even though those places didn’t actually benefit economically, the tariffs were a political winner for Republicans, thanks to the idea that they were being protected. They weren’t actually being protected. The economy was actually a little worse. But they thought they were, and they were rewarding politicians for that.
So I think that is the case. And it’s unfortunate because, first, I am not entirely convinced that tariffs and protectionism were what tipped the 2016 election.
There’s a lot of other stuff bubbling under the surface. But the other big thing is: You actually look at the effect of import competition on these places pre-Trump, and it’s not nearly as devastating as the narrative makes it sound. Whether it’s the China Shock or NAFTA or anything else, these things undoubtedly had a small but significant negative effect on certain places, but it was small. There’s a lot of bigger things going on in terms of manufacturing job loss, in terms of communities surviving or dying.
There’s a great study a few years ago from Brookings that found that, like, 80 percent of old industrial cities in the United States had transitioned to successful economies—places like Pittsburgh. So not every place ended up being like Youngstown, Ohio, right? Yet there’s this narrative that it was all trade, and every place got crushed. And that’s just not the reality, you know?
And the other thing we ignore entirely is interstate competition. A lot of the jobs in the Rust Belt manufacturing—they’re still in the United States. They’re just not in the Rust Belt anymore. They’re in the Sun Belt. We don’t talk about that at all, either. It is all trade, trade, trade. And I think that’s really unfortunate.
At the end of the day, what does that do? It means that the real solutions—and there are a lot of policies that could be pursued to help people adjust, to give them better training and education, to help them move if they need to move by lowering housing prices (you know all about that)—we don’t do any of those. Or, at least, we don’t focus on those. Instead, it’s like, Ah. We’ll just slap a tariff on a toaster, and suddenly Youngstown will be thriving again. And that’s just not reality, not just in the literature. It just doesn’t make any sense. But that’s politics for you, right?
Demsas: Yeah. Yeah. I also think that one of the things that I wanted to get your—because you’ve thought about this for years as someone who’s working in trade. The political dynamics of tariffs, I think, are really important to understand. I think, broadly, my question for you is: Why are tariffs so popular if they’re so harmful? What is going on that, if you’re right, it’s creating all these problems, from baby-formula shortages, which is extremely politically costly, other kinds of shortages during the pandemic—very, very costly. If it’s leading to lower growth—all this stuff—what’s happening? Why doesn’t the political party just win 300 electoral votes by campaigning against tariffs?
Lincicome: Right. Because they are extremely politically attractive to voters.
There’s a guy named Bryan Caplan who wrote a wonderful book several years ago called The Myth of the Rational Voter. He’s a George Mason economist, libertarian guy. But this is more political-science oriented. He ticks through a bunch of biases we all have. And bias is kind of a bad connotation, but I don’t mean it that way. I just mean things that we innately feel.
And tariffs check all of the boxes: an anti-foreign bias, a make-work bias. We like things that produce jobs, right? We have a status-quo bias. Like, we want to protect things that we see that are right in front of us. We are less inclined to want the unseen or the things we don’t know. We can, in fact, fear them. You can go down the list, and tariffs check all of those boxes. So that’s the first thing. Voters innately think, Oh, that’s great. You’re going to protect jobs with that tariff. Wonderful.
But beyond that, the economics of tariffs are hard. It is counterintuitive that a tariff might actually reduce manufacturing output, right? It is counterintuitive, I think, that a trade deficit isn’t necessarily a bad thing. It sounds terrible, right? And it’s counterintuitive that if you cut imports, you actually cut exports too. So there’s all these little things in trade economics that make it a hard sell.
And then, finally: It’s opaque. I mentioned before, when you go to the gas station, you see how prices change. So even some voters that are somewhat connected to the news can be like, Oh, wow. There’s this new conflict with Iran and Israel, and gas prices are going to go up. I get that connection. You don’t really get that with tariffs.
Demsas: So you need a tariff ticker in grocery stores to show—
Lincicome: Yes. I’ve actually long said we need—just the gas station ticker, you need that as well. I think that if you got a receipt from the grocery store and a lot of the line items was the tariff amount, I think that probably would change a few minds. And then, finally, the other thing is that tariffs are oftentimes a corporate tax, and corporate taxes can be hidden. They can either be absorbed by companies or passed on to consumers, again, in invisible ways. And that makes it hard too. So it’s a very, very tough sell.
Now, I’ll note: We’ve known everything I just said for decades, if not centuries. And politicians came up with a fix. It’s called a trade agreement. Trade agreements are not, contrary to popular belief, primarily economic or even about foreign policy. They’re primarily political. There are ways for governments to tie their own hands when it comes to tariff policy. They’re like, I can’t be trusted with this. We went through Smoot-Hawley and all these other bad tariff episodes. We can’t be trusted with guiding tariff policy. So we’re going to delegate it all to the president, which, by the way, that was not the best idea, given Trump. But beyond that, we’re entering into agreements that essentially say that if we go back on our promises, well, what happens? Then the countries we’re trading with can retaliate, there can be litigation and the rest. And that can act as a check.
The other big thing is: We’re going to offset import-competing industries. We’re going to offset their political power with exporters, and trade agreements are going to do that too. Because that’s the other political attractiveness, right? Concentrated benefits and diffuse costs. The benefits of protectionism are very narrow, like the steel industry. Costs of protection are diffused. We all bear those little costs—again, an invisible cost.
So how do you offset that? Well, a trade agreement does that, too, because you have exporters that are like, Oh, but I want access to that market. And I don’t just mean Boeing. I mean financial services and other companies. And so that was the political solution. Now, trade agreements have problems, but they were reasonably successful for 80 years in liberalizing trade, integrating economies, and checking the protectionist impulses of our political class. It was only in the last decade that Donald Trump hacked the whole machine. And we’re basically dealing with the aftermath.
Demsas: Yeah. This diffuse-benefits, concentrated-cost thing—I think it’s just so key. Also, because even after the political constituency has died, it’s kind of hard—in general, once a law gets passed, it’s really durable. Repealing that law, on not just tariff policy but all policies—it kind of just lives on its own. It develops a constituency, whether it’s in the government or outside the government, that wants its continuation. And there’s also very few people who are going to make their political hobbyhorse to do good-governance reforms.
But I write about housing policy a lot. And it’s funny—everyone is talking about housing policy now. Everyone’s talking about how to reduce the cost of housing, make it easier to do construction, all this sort of thing. I’ll have people who are in the Democratic Party or in the administration saying things like, Jerusalem, we need to lower costs. We need innovative ways for the federal government to do this. It’s really hard. It’s all at state and local level.
And I’ll often just say, Hey. Did you guys know there are, like, massive tariffs on Canadian lumber, on Canadian softwood lumber? And they doubled those tariffs in August. And there’s none of this thinking about the diffuse costs to the American people. Like, Congress isn’t working on fixing that. It’s just a level at which I believe that they all care about lowering the cost of housing. I think that’s not a fake thing that they’re talking about here. But we don’t even think about tariff policy when we’re thinking about broad economic costs to the public. We only think about them narrowly in the question of, How does it hurt or benefit this specific industry? and not, What is the harm to the rest of the public?
Lincicome: For sure. And every time you bring up potentially lifting the tariffs that are in place, what happens? Well, big lumber comes to your congressional office or big dairy when the—the dairy industry in the United States, highly protected. When the baby-formula thing was going down, they were vigorously opposing a long-term elimination of the tariffs on baby formula. Now, think about that for a second: baby formula. And these guys are out there, big dairy is out there fighting it. And it worked. Congress has not eliminated those tariffs, even though it’s the most sympathetic consumer possible, right?
Demsas: And it was broadly unpopular. It’s very unpopular, what happened with the baby formula.
Lincicome: Exactly. And every time you scratch a tariff, there’s a crony underneath, and they’re going to fight like heck to keep their windfall profits.
And they’re paying attention. They’re editing Wikipedia pages to make the protectionism sound better. They are the ones laser focused on keeping the protection in place, while the rest of us are like, Well, five cents for some food that’s subject to a tariff, a few dollars here and there extra for a refrigerator or washing machine. Oh, well.
But that stuff adds up, of course. Studies show that if you eliminated all of the protectionism that’s remaining in the U.S. economy—and we’re a pretty open economy—you would save consumers hundreds of dollars a year, if not more. And yet, because it is 10 cents here and 10 cents there, it just doesn’t resonate. And the other side is extremely motivated.
Demsas: Well, thank you so much, Scott. I have one last question for you. And it’s: What’s an idea that you had that seemed good at the time but turned out to only be good on paper?
Lincicome: Yeah. I struggled with this question.
Demsas: Because you’ve always been right? Yeah. (Laughs.)
Lincicome: Well, no, no, no. Because I wanted to find a good one. Self-checkout is my answer.
Demsas: Oh, yeah?
Lincicome: Yeah. I am a huge fan of self-checkout. And being me, I’m also a big fan of just efficiency, right? Waiting in line is terrible. I wrote a whole column about why you should never wait in line, because of the opportunity cost of doing so.
So self-checkout—in theory, self-checkout is this amazing life hack. And I still love it, but I’m realizing that—let’s face it—and companies are realizing that self-checkout is not nearly the labor-saving, time-saving miracle that we think. And that’s because humans, alas, are still human. And for every guy like me who literally treats it like I’m trying to beat my best time ever at Costco when I’m going through the self-check—my daughter’s, like, handing me stuff. I mean, we’re literally gamifying it. It’s so great.
Demsas: This is how I feel in the airport security line. I get so angry.
Lincicome: For every person like me, who’s trying to get out of there as soon as possible and trying to break his own personal record, there are, like, 74 other people who are utterly confused by the technology, in no rush, wanting to maybe chat with the person behind the counter, wanting to pay by a check, confused by their coupons, or trying to steal. That’s the other big thing. And so, unfortunately, it has turned out that self-check is not the miracle technology that I was hoping. So it looked good on paper but less so in reality.
Demsas: There’s a Safeway near my house. I moved recently, so I was checking out the nearby grocery stores. And the self-checkout is, like, I don’t know, an armed state. It’s so insane. You can’t exit the checkout without scanning your receipt. And I usually just throw my receipt away immediately, so I had to go get the receipt out of the trash. It wasn’t even functioning. Someone had to come and let me out and then look at all my stuff and make sure I wasn’t stealing. It was just this level of just—it genuinely would have taken me so much less time to wait in this line. But every time, I still go to the self-check. I don’t know why I’m doing it to myself.
Lincicome: Of course. No. And I have a dream of opening up my own supermarket where we actually time people, and there’s, like, posted records of all this. But no. Alas, it still runs into problems.
Demsas: Well, Scott, thank you so much for coming on the show.
Lincicome: My pleasure. Thanks for having me. Great talk.
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Demsas: Good on Paper is produced by Jinae West. It was edited by Dave Shaw, fact-checked by Ena Alvarado, and engineered by Erica Huang. Our theme music is composed by Rob Smierciak. Claudine Ebeid is the executive producer of Atlantic audio, and Andrea Valdez is our managing editor.
And hey, if you like what you’re hearing, please leave us a rating and review on Apple Podcasts.
I’m Jerusalem Demsas, and we’ll see you next week.
Lincicome: I’ve really worked this out on Twitter a few times. You’d put a bar right at the checkout area, so people could watch, and stadium seating around it. It’d be great. Scott Mart!