Tuesday, June 19, 2018

Right Now, It's a Spectator Sport. Before Long It Could Become a Blood Sport.

Trump has people in Canada, Mexico, Japan and Europe a bit worried about how we'll fare in a trade war with the United States. We're told we could be heading toward a recession, a drop in GDP of perhaps 2 per cent.

Trump's abuse of America's traditional allies is small potatoes. The Big Show is the Clash of the Titans, Washington versus Beijing. There's the one to watch because it's possible that could end in fireworks.

It would be much less worrisome if America had a mentally sound president. It doesn't. It has Donald Trump.

Donald Trump is in the White House and the reasonable people, the boys in the long pants, are pretty much gone. Trump has now surrounded himself with some pretty sketchy types like Pompeo, Bolton, Navarro and Haspel. They're the sort who can play on Trump's worst instincts, his deranged sense of grievance, his fears and every base instinct - they are legion. Trump embodies a malignant narcissism. He's extremely sociopathic, utterly lacking in empathy. He's impulsive and more than a little sadistic. These are the foundational attributes that Donald Trump has consistently exhibited his entire life. They're also America's Achilles Heel.

Trump may be attempting to restore America's dominance in the world. He can't. America's days as the world's industrial powerhouse are over. Trump blames that on foreign predators. Not hardly. It was America's industrial giants that, unleashed by globalism, offshored their manufacturing operations to low-wage, minimal-regulation regimes abroad. The United States quite deliberately transitioned to a "fire" economy - finance/insurance/real estate.

A few years ago I read a fascinating analysis by an American labour economist about the state of industrialism in his homeland and why so much of it was gone for good. He pointed out that manufacturing generates stable albeit modest returns on investment. Typically it's something in the range of 3 per cent. At the same time, the fire economy, Wall Street, was generating returns of 9 to 12 per cent. To encourage financial investment the feds began cutting capital gains taxes. The Triumph of the Rentier Class. Trump has no appetite for undoing that.

Do we imagine Chairman-for-Life Xi hasn't taken the measure of Trump and the box he's in? Do we think only Trump will ruthlessly exploit every opportunity, every vulnerability?

Could Trump's trade war be the very opportunity Xi has been looking for? This could be China's opportunity to cement its ascdendancy. History tells us that most of these superpower transitions lead to warfare. That was predictable when ships were made of oak, cannon were cast iron and fired grape shot. This transition will be the first we've seen in the Nuclear Age.

I would bet that Xi has a critical advantage. He can probably weather the domestic reaction to a recessionary trade war much better than Trump. Trump's base will be hit. The Gullibillies are quite vulnerable. But it will be the Kochs, the Coors and the Adelson's who will be gunning for him if they see he's launched a ruinous trade war without much chance of success. They're already incensed with Trump's trade wars. They'll be unforgiving if Trump loses his war with China or winds up groveling for terms. And let's remember who owns America's "bought and paid for" Congress.

Trump is no Simon Bolivar but he may wind up as America's Don Quixote. He cannot endure humiliation and he's now surrounded with people like Bolton, Pompeo, Navarro and Haspel. With those people steering Trump, it's Xi's advantages that I find truly worrisome.

Remember, America is flying solo this time. It has viciously turned on its allies.

Let's hope this doesn't get out of control.


Toby said...

Let's hope Canada has the collective sense to distance itself from Trump's Amerika.

The Mound of Sound said...

Have you seen any sign of that, Toby?

Toby said...

With Justin at the helm? Nope.

Anonymous said...

"Trump's abuse of America's traditional allies is small potatoes. The Big Show is the Clash of the Titans, Washington versus Beijing. There's the one to watch because it's possible that could end in fireworks." Please get a copy of Clive Hamilton's "Silent Invasion"". Published in Policy Forum, 9 April 2018. How committed is Australia to its foundational liberal values? Some of the responses to the emerging debate on CCP influence in the country provide plenty of reason for concern. It's China's dream of taking the world quietly and making it pay for all the injustices it likes to believe has happened to it. Are you aware that China has bought most Seniors Retirement Homes in B.C.?www.theglobeandmail.com/news/politics/ottawa-approves-sale-of-bc-retirement-home-chain-to-chinese-group-with-murky-ownership/article34107591/ Trump is playing to both Russia and China thinking he is going to beat them. Why aren't we calling it what it is........The second coming of Hitler. Anyong

Anonymous said...

And no...Canada is playing blind. Anyong

The Mound of Sound said...

"injustices China likes to believe has happened to it" -

Do you imagine that the 'century of humiliation' is a contrivance? The Opium Wars never happened? The forceful intrusion of European and American powers, that was made up? The seizure of Hong Kong and Macau some self-serving bit of propaganda?

Do you grasp that a matter of a few centuries ago, China and India were the world's largest economies? Western powers put an end to that, driving those countries ultimately into subservience and crushing poverty.

You either don't know this history or you imagine the Chinese should simply let bygones be bygones, something we would never have entertained.

Anonymous said...

Yes indeed I know Chinese History and I also lived there. China believes Korea was a part of it....not true. It also likes to say it discovered Australia....that is...how Yi, Jinping is touting it. Actually, "injustices Yi, Jinping is harbouring for the past and using it in 2018 is revenge. Yi, Jinping does not have any intention of considering reconciliation of any kind. Do you always use a menacing tone instead of asking what someone is thinking? Anyong

Anonymous said...

When someone knows one who always purports to be the expert on any subject. Although it’s sometimes helpful to get actual advice a person can use, the constant drumbeat of supposedly knowledge-based conclusions that comes out of this person’s mouth leaves a person feeling that somehow they are defective. When a person thinks about it, the advice was useful, but it was given in a tone of voice that seems to have been designed to drive the point home that a person's ideas — and they — completely lack validity.

The Mound of Sound said...

"Menacing"? Oh, please. And what is with that follow-on comment? By the way, since you know Chinese history, what about your contention that China "likes to believe" it has experienced injustice? I challenged you on that very assertion and all you've done is to dodge it. Up your game if you want to discuss your point.

The Mound of Sound said...

I think with my ever worsening backlog of reading it will take a while for me to get to Hamilton's book.


Anonymous said...

I ought to have said....Yi, Jinping and not "China "likes to believe". Anyong