Wednesday, February 05, 2025
Trump/Musk Just Gave China A Huge Gift
A few days ago, Elon Musk put a freeze on all foreign aid, and said he was eliminating USAID. He has the support of Donald Trump to do this.
Many have pointed out that this aid helps poor countries and peoples around the world, and without it many won't have life-saving food or medical care. It could mean the unnecessary deaths of many thousands of people.
That is true. But it is not the only thing that foreign aid accomplished. It bought the United States a lot of good will and cooperation from the countries that received it. Those countries were more willing to side with United States goals, allow U.S. troops in their countries to fight terrorism, vote with the U.S. in the United Nations, and aid the U.S. in many other ways.
What are these nations going to do now that the U.S. has cut off that aid? Are they going to let their citizens suffer in the hope that Trump (and Musk) will change their minds? Not likely! Trump has shown he cannot be trusted. Even if the aid is continued, there is no guarantee he won't change his mind in the future and cut it off again.
It is far more likely those nations will look elsewhere for the help they need. And China is eagerly waiting in the wings. China understands the good will and cooperation foreign aid accomplishes. They have been trying to get the Third World on their side for a while now, but have not been able to lure most of those countries away from the United States.
This is China's golden opportunity, and you can bet they are going to seize it! They will be quick to replace the missing U.S. aid - and they will reap the benefits of that.
As these countries enter the sphere of Chinese influence, this will not make the world a safer place - and it will not encourage more democracy and human rights in those countries.
This was a huge blunder by the Trump administration. Unless that aid is very quickly restored, the U.S. will be more alone in the world and fewer of its goals will be accomplished. It could take a long time for American leadership to be re-established - if ever.
Tuesday, February 04, 2025
Trump's Use Of Tariffs As A Weapon Is A Big Mistake
In some rare instances, a tariff can be a good thing. An example would be to protect an industry critical to the country's economy. But Donald Trump doesn't use tariffs in that way. For Trump, tariffs are a weapon to beat another country into submission. If a country doesn't do what Trump wants, he punishes it with a stiff tariff..
This "tariff diplomacy" is not good for anyone, and it has negative consequences that Trump seems to be ignorant of.
* Tariffs on goods coming into the United States make those goods more expensive for consumers in the United States - raising inflation. This wouldn't be so bad if there were cheaper American made products available, but in many cases there aren't. Most electronics are no longer made in the United States. Many car parts for American cars are made in other countries. About 40% of vegetables and 60% of fruits are imported - an amount that could not be replaced by American growers.
* Imposing tariffs on another nation means they will likely retaliate by imposing tariffs on goods from the United States. This makes U.S. made goods more expensive in the other country, and hurts American businesses that try to sell goods in that country.
* In many instances (probably most), imposing a tariff violates a free trade agreement with that country. This is true of the tariffs leveled against Canada and Mexico. Those tariffs violate NAFTA, which was renovated and agreed to by the Trump administration. Why should any nation agree to an agreement with the United States knowing that Trump could violate that agreement at a moments notice?
* This kind of "tariff diplomacy" makes other nations seek and agree to free trade agreements that do not include the United States. The European Union and other entities are already starting to do this. When this happens, U.S. businesses lose out.
Trump thinks he's smart to use tariffs as a weapon. He's not! The United States will lose in the long run to this kind of idiotic bullying.
Trump Is Doing What He Said He Would Do (People Should Have Listened)
The following is part of a post by economist Paul Krugman:
When democracies die, big business and wealthy individuals often play a crucial role in their demise. They provide a would-be strongman with financial support; their control of or influence over news media ensures that he receives favorable coverage, while his opponents are trashed. They do this because they expect to be rewarded with policies that favor their interests and imagine that they will in effect be shareholders in the new autocracy.
What comes next is familiar to anyone who studies history (which the oligarchs don’t.) Eventually it becomes clear that they don’t own the dictator they’ve helped install; he owns them. Maybe they’ll like some of his policies, maybe they won’t, but in any case they’re not in control — and they soon learn that criticizing the big man isn’t just fruitless, it’s dangerous.
In the past this script has typically taken a few years to play out, but this is the internet age, so right now in America the process seems to be taking only a few weeks.
Donald Trump’s decision to launch an all-out trade war, not with China, but with our neighbors and allies — who are gearing up for large-scale retaliation — probably isn’t the most important thing happening right now. I’ll talk in a minute about what is. But it has certainly come as a wake-up call for business.
It would be funny if it weren’t so serious. Actually it is funny if you’re into gallows humor. Trump spent the entire campaign proclaiming that he was a Tariff Man, promising high tariffs and asserting that we were somehow subsidizing Canada and Mexico. Yet businesses and bank analysts blithely assumed that he didn’t really mean it. On Inauguration Day he made a very specific promise: 25 percent tariffs on Canada and Mexico by Feb. 1. Yet the newsletter I receive from Goldman Sachs summarized the day with the headline “A More Benign Tone on Tariffs.”
The question, however, is, what did they expect? The Wall Street Journal has spent decades promoting the economic ideas of charlatans and cranks; now it’s upset to find out that cranks are in full control, but they aren’t their cranks. And Trump spent the entire campaign signaling his intention to start a destructive trade war. It’s a bit late to be shocked, shocked that he meant what he said. . . .
The trade war, drastic as it is, isn’t the most important story right now. It takes second place to what looks like a quiet takeover of the machinery of government.
Here’s how it works: Scott Bessent, the Treasury secretary — whose selection was, financial types assured me, an indication that Trump wouldn’t go wild — has given associates of Elon Musk, who as far as we know aren’t even government employees let alone officials with the right security clearance, access to the computers at the Treasury department that control the federal government’s financial plumbing — that make payments to contractors, workers, everything.
This situation gives Musk’s minions the ability to download millions of Americans’ private information. But people who understand the system better than I do say that it also effectively gives them control of public spending. Congress may have passed a law mandating that money be spent for some public purpose; but Musk and company may simply, in effect, tell the system not to cut the checks.
If this is really the case, and serious people say that it is, we may already have experienced what amounts to a 21st-century coup. There may not be tanks in the streets, but effective control of the government may already have slipped out of the hands of elected officials. . . .
All of this was entirely predictable. But there are none so blind as those who will not see.
Monday, February 03, 2025
The GOP Will Make Health Care Worse To Give Tax Cuts To The Rich
The following is part of an article by Aaron E. Carroll in The New York Times:
The Trump administration faces a dilemma: The president has promised to extend the 2017 tax cuts (nearly half of which will go to the wealthiest 5 percent of Americans) at a hefty cost of $4 trillion over the next decade, but many Republicans are reluctant to add to the federal deficit.
How do they square the math? It appears they are prepared to do so at the expense of the poor and middle class, by yanking health care coverage from children, new mothers, people with disabilities and seniors. Republican leaders in Congress have suggested that one option they are considering to bankroll their tax breaks would be to cut hundreds of billions from Medicaid; another proposal would roll back subsidies that have helped middle-class families pay Affordable Care Act premiums.
It’s hard to overstate how catastrophic the proposed cuts would be. Medicaid alone covers more than 40 percent of births in the United States. Far from being a handout, it is one of the most cost-effective insurance programs in the country, meaning there is very little fat to cut without immediately harming people. It’s because of Medicaid that children, seniors and people with disabilities — groups that make up more than 75 percent of the program’s spending — can see doctors and fill prescriptions without going bankrupt.
In their menu of options, House Republicans propose adding work requirements to Medicaid, which would cut benefits to some recipients and, they claim, save billions. Proponents of work requirements argue that such measures incentivize employment, but the evidence overwhelmingly shows that they don’t. This is because nearly every adult in Medicaid who can work alreadydoes, or is a student, disabled or a caretaker for someone else. Instead, people lose access to care because of bureaucratic red tape and difficulty proving they qualify. Work requirements bloat the bureaucracy and result in worse care for fewer people.
Republicans are also considering distributing a set amount of money to states, regardless of what care actually costs. But states are already struggling with tight budgets. They don’t have hidden, untapped solutions to magically fund health care. With less money, they must refuse coverage to more people or pay providers even less, which means fewer doctors will see Medicaid patients, which reduces access for everyone. Twelve states have trigger laws on the books that might end Medicaid expansion programs or severely cut them if the federal government reduces funding.
Medicaid isn’t the only potential victim. Congressional Republicans are also eyeing the Affordable Care Act’s premium subsidies — the same subsidies that help working Americans buy private insurance at more affordable rates. Roll back these credits, and families could see their monthly premiums soar by hundreds of dollars. . . .
We should be honest about these trade-offs: Families lose health insurance if we cut Medicaid or slash A.C.A. premium credits. Children go without care. Clinics and hospitals in rural areas close. People suffer. . . .
Gutting Medicaid, or making it impossible for middle-class Americans to afford A.C.A. exchange plans, is callous. No parent should choose between taking a child to the emergency room and paying the grocery bill.
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