Waiting For Octopus City

 

Octopus City, rendering of a plan by Peter Thiel's Seasteading Institute, via Wired, May 2015, when the techie billionaires were giving up on their idea. Then Donald Trump announced his presidential candidacy.

Found myself unexpectedly attracted by a conspiracy theory around the tariff mishegas, from a Substacker, Daniel Pinchbeck, with an excitingly transgressive headline: Paul Krugman is wrong.

Not that I was planning to go that far myself! I think Krugman's judgment of the White House at the moment is fundamentally right:

These Are Not Serious People

 

Hey, Mom, I told you I'd finish the project in time. Photo by Chip Somodevilla/Getty Images, via Newsweek.

I had a pretty strong suspicion that there was some bullshit involved when I heard about the chart (at first on the radio) of Trump's proposed "reciprocal tariffs", announced on NPR as

a 10% minimum tariff to apply to goods from all countries. However, certain trading partners will face higher, "reciprocal tariffs" aimed at penalizing them for their trade barriers. Those taxes on imported goods are calculated on a country-by-country basis, and the levels Trump announced for some trading partners are substantial. He said he plans to impose 34% tariffs on China, 20% on the European Union and 24% on Japan, among an array of other trading partners.

and a little more suspicion when I saw the charts Trump put on display for illustration, which seem to be describing something different, or maybe two different things, with the left columns headed "tariffs charged to the U.S.A. including currency manipulation and trade barriers", and the right column headed "U.S.A. discounted reciprocal tariffs" of around half the amount given in the first column, except for a number of countries, such as UK, Brazil, Singapore, Chile, Australia, and Colombia, where the number in both columns was 10%, which looked like a reference to the 10% "minimum tariff" instead. Why were those on the same chart? 

But the thing I really wanted to know about was where the numbers in the other cells of the left column came from: how had the administration calculated a single number for "tariffs charged to the U.S.A. including currency manipulation and trade barriers" for each of the 65 countries, 67% for China, 39% for the EU, 90% for poor Vietnam? Not that I would have any ability to imagine other numbers, or even to say whether such numbers exist, but could they say something about how they did it? There are no clues in today's executive order or in the presidential memorandum to which it alludes.

Anyway, I was pleased to see that Dr. Krugman, who is probably as well positioned to talk about these subjects as anybody alive (work in international trade theory is what he won his Nobel for), put up a quick note on the Substack that has replaced his New York Time column that suggests he was wondering exactly the same thing: 

So where does this 39 percent number [representing the EU's "tariffs charged to the USA"] come from? I have no idea. Many people speculated that Trump would count value-added taxes as tariffs, even though they aren’t — European producers selling to the EU market pay the same VAT as US producers, so it doesn’t discriminate and therefore isn’t protectionist. But even if you get that wrong, EU VAT rates are in the vicinity of 20 percent, so you still can’t get anywhere close to 39 percent.

You have to wonder whether Elon Musk’s Dunning-Kruger kids are now producing tariff numbers.

Now it seems, as NPR reports it, that's pretty much what happened:

Trump calls the move "reciprocal tariffs," however, the White House acknowledged it would be hard to calculate the actual trade barriers from every country, NPR's Scott Horsley tells Up First. As a result, the Trump administration picked an arbitrary number they thought would be high enough to chip away at each country's trade surplus. Economists say the tariffs will likely mean higher prices and slower growth in the U.S.

Got that? It would be hard to calculate, so they decided they'd just make the numbers up. And it's not like it was totally arbitrary, they were careful to pick numbers that sounded "high enough". Close enough for country music, as we used to say. Everybody's OK with that, right?

It was government by bullshit. They just brought their big charts with the made-up numbers out to the Rose Garden like Trump's hurricane map and read Stephen Miller's statement, with news that is I mean cataclysmic for most of these countries, threatening them all with recession, and lay back in the expectation that everybody would treat it as some kind of real thing. Presumably it's another Trumpy extortion attempt. Hey Vietnam, nice little export economy you have here, shame if anything were to happen to it, why don't you make us an offer? (Except Vietnam did make them an offer, back in February, and ambassador Marc Knapper assured them that Trump's tariffs were not going to be aimed at them in any way. Maybe President Trump wasn't informed of what President Trump was doing.) 

I'll have more to say about the whole event later on, but I feel like this thing on its own is so key to the understanding of what the Trumpery is about: they made the numbers up, because they felt getting real ones would be too hard, and admitted it to Scott Horsley, and they still expect to be treated as adults.

Update: The actual calculations are now available from various sources, including good old Atrios, Dean Baker, and The New York Times. And Krugman, with some hard evidence that the formula was created by an Large Language Model generative AI (though Gemini 3.5 is very insistent that it’s a stupid idea). Still insane, but helpful indicators of what kind of insanity.

Showtime

 

This may be more obvious than I think, but this week's votes on a continuing resolution to keep the government going past Friday's debt ceiling deadline until September are a kind of confession of failure on the part of House Republicans, and Speaker Mike Johnson in particular, retreating from the effort to use reconciliation rules to put through the huge package of tax cuts and spending cuts they passed on February 25 for fiscal year 2025. Never mind, said Johnson: Elon and Donald can do it, or something like it.

But Johnson said those cuts would be reserved for legislation to fund the government in fiscal year 2026, which begins on October 1.

"We will actually be able to change the way this is done and incorporate all the extraordinary savings that DOGE is uncovering through fraud, waste and abuse, the other revenues that President Trump is bringing about because of his policies," Johnson told the Fox News program "Sunday Morning Futures."

Although as you know DOGE hasn't uncovered any fraud, waste, or abuse at all that they're able to publicly identify, and their own estimate of how much money they've managed to save so far—$105 billion—would be pretty pathetic as an attack on a $2 trillion deficit, if it were accurate, which it clearly isn't anywhere near. While the revenue that President Trump is "bringing about because of his policies" means tariffs, and it's pretty hard to estimate, what with Trump changing his mind up to three or four times in a given day (just announced he's doubling the tariffs on steel and aluminum he's landing on Canada on Wednesday, from 25% to 50%), but the best guesses seem to make it around $120 billion a year, which also isn't much, though the rise in consumer prices it will bring on, focused on the areas of electronics and clothing, motor vehicles and food, will cost us around $1600-$2000 a year per household. Not only a tax on Americans, whatever Trump may imagine, but a very regressive tax, mostly felt by those with lower incomes (the lower your income, the higher the proportion of it that you end up spending on stuff like food and clothing, or really anything).

For the Record

TV lawyers keep fretting about how key witness Michael Cohen is a noted liar—he's even got a felony conviction for it—so juries might have trouble believing him. I don't know, if it's a "he-said-he-said" between him and Trump and he's explaining the deceit Trump was paying him to practice...

Also, the only important Cohen lie in this case is the one COVERING UP FOR TRUMP in his guilty plea, when he claimed he'd made an illegal campaign contribution (the Stormy payment), hiding the fact that Trump had reimbursed him (as Cohen proved in 2019 with the canceled checks).

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— Yastreblyansky (@yastreblyansky.bsky.social) May 16, 2024 at 9:34 PM

(cite from Politico in August 2018 www.politico.com/story/2018/0...

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— Yastreblyansky (@yastreblyansky.bsky.social) May 16, 2024 at 9:41 PM

***

Teh Stupid

It's now possible to embed Bluesky posts! I guess it has been for a while, but I haven't given much thought to posting threads here the way I used to do with Twitter threads. Then yesterday everybody was talking about that Trump interview in Time, and I thought I might use some of mine. At least these, which have a more threadish form:

I think Josh is literally incapable of understanding how stupid Trump is. talkingpointsmemo.com/edblog/decod... He's probably never met anybody that stupid. On the NATO issue, Trump is unable to comprehend what the issue is. It's like his inability to comprehend that a tariff is an import tax...

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— Yastreblyansky (@yastreblyansky.bsky.social) Apr 30, 2024 at 5:36 PM

Trump doesn't know that the 2% rule is about the countries' individual defense budgets. He has made up a story for himself that makes sense to him--that all the NATO countries are supposed to pay some kind of fee to the US and they're all deadbeats. And it makes him really mad!

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— Yastreblyansky (@yastreblyansky.bsky.social) Apr 30, 2024 at 5:41 PM

It's the only way to make sense out of things like this latest version. "You got to pay your bills." www.cnn.com/2024/02/10/p...

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— Yastreblyansky (@yastreblyansky.bsky.social) Apr 30, 2024 at 5:44 PM

I'm sure aides like Kelly have tried to explain it to him over and over again, and he just can't get it. Kudlow explained tariffs to him too, but he's still talking like this in the Time interview:

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— Yastreblyansky (@yastreblyansky.bsky.social) Apr 30, 2024 at 5:49 PM

As Philip Bump has said, what he's doing in the interview is largely refusing to say what he might do in a second term because he hasn't thought about it and doesn't want to, and trying to interpret it as representing Trump's plans, as Eric Cortellessa does in his report of it, is a mug's game: 

a lot of what Trump is reported as planning to do is constructed from murky, noncommittal answers Trump offered to specific questions. The interview is very revealing about Trump’s approach to the position in that it strongly suggests he hasn’t thought much about important issues, and makes clear how relentlessly he relies on rhetoric to derail questions

Don Tzu's Art of War

Drawing of the late 16th-century Azuchi Castle near Kyoto, from the collection of the Osaka Castle Museum, via Wikipedia.

Don Tzu said, It is better not to go to war. But if you must go to war, go to war against your friends rather than your enemies, for your friends have an interest in letting you look good afterwards.

This can be seen especially in the Emperor's conduct of economic war, in which he hasn't followed his own advice but waged it against practically everybody, as The Times was saying,

Over a few weeks, Mr. Trump has declared European and Japanese cars, Chinese telecom equipment and Mexican immigrants national security threats. Those declarations have given the president authority to use Cold War powers to inflict economic pain on countries through tariffs, government blacklists and other restrictions.

(with the odd little exception of Russia, neither a friend nor a foe), and found when he does it to the people he hates, like Iran and China, they just end up laughing at him, whereas the European Union or Japan or Australia always make the effort to avoid hurting his feelings.

So, Mexico, against which he declared economic war on 30 May:

....at which time the Tariffs will be removed. Details from the White House to follow.

— Donald J. Trump (@realDonaldTrump) May 30, 2019

It seems this was provoked not by a Fox News person but some talk-radio rant, I don't know from whom, in the absence of some key adults, Pence and Kudlow and maybe Lighthizer, per CNBC:

Literary Corner: The Case of the Delayed Devaluations

Joan Miró, L'Été, lithograph, 1938, via Denis Bloch Fine Art.

It's a Story

by Donald J. Trump

Just to—just to finish,
I think a lot of good things
are going to happen, but I
delayed my devaluations.

Monetary, you know, on
the monetary—the devaluations,
my currency manipulations, and also
my tariffs, for a period of a year,
with China, because I wanted to
get as much help as—as they could
give us with respect to North Korea.

That had an impact. So I delayed it.
But there came a time when I couldn’t
delay it any more because it’s too much
money that they drain out of our country.
Just too much money. That’s where we are now.

So I put 50—I hope you can cover
this pretty much as I say it
because you can’t really cut
it out. It’s—it’s a story.

It's actually true that Trump single-handedly brought about a huge devaluation of the RMB, in early July, through the last round of crazy tariff impositions, as Bloomberg reported at the time:

Literary Corner: Gestating the Turkey

Image by Getty via Mirror.

Sonnet: Eight-Hour Turkey

by Donald J. Trump

I have tremendous respect for China. I mean,
the energy, the genius… it's incredible what
they have done. We can't do it, it's got to be
a two-way street. We have only one-way streets.

You know what bothers me? I have people
coming to me, some people in Congress,
"Sir, can you get this deal done immediately?"
It's got to gestate. The word "gestate". 

Like when you are cooking a chicken. Time… Time…
Turkey for Thanksgiving. My mother would say eight hours.
I said, "Eight hours?" She made the greatest turkey
I ever had. It takes time. It takes time. So when they run
and say, "Can you do Nato right now, can you
sign it next week?" I say, "Wait a minute…"

Even a 30-pound turkey should not spend more than five and a half hours in the oven. At eight hours it will be a desolate inedible monster, a thing a rat or a raccoon wouldn't touch. Even mold won't eat it. Sort of like Jared's peace deal in the Middle East. As to China, I suppose if there were going to be a deal it would have been done by now. I'm not surprised some "people in Congress" have been bothering him about it. Soy farmers all over the country are facing huge losses. The Shanghai steel market is enjoying six-year highs, while American manufacturers who use steel in their products are facing unsustainable price increases. Maine's lobstermen are dying while the Chinese buy from Canada. Trump's deal is "gestating".

The only possible thing left is for Trump to retreat and go back to the status quo ante, to bury the "deal" in the backyard and apologize to all of us for his stupidity. And for the cabinet officers who helped him create this dessicated turd, criminal Wilber Ross and idiot Steven Mnuchin and crazed Peter Navarro, to resign. Oh, and Trump's a criminal too, if you hadn't heard about that, and he should resign too.

Lede From Behind

When he decided on the Syria airstrike in April 2017 he was watching Rogue One on the presidential plane. Via metro.co.uk.

Mr. President, the Wolf is at the door.

Wolf Blitzer, that is. Mrs. Trump prefers CNN:

WASHINGTON — On the first couple’s recent trip overseas, Melania Trump’s television aboard Air Force One was tuned to CNN. President Trump was not pleased.

He raged at his staff for violating a rule that the White House entourage should begin each trip tuned to Fox — his preferred network over what he considers the “fake news” CNN — and caused “a bit of a stir” aboard Air Force One, according to an email obtained by The New York Times. The email, an internal exchange between officials in the White House Military Office and the White House Communications Agency last Thursday, also called for the ordering of two additional televisions to support Beam, a TiVo-like streaming device, to make sure the president and first lady could both watch TV in their separate hotel rooms when they travel.

From Katie Rogers and Maggie Haberman, reporting from the Inner Courtyard of the Imperial Bedchambers. I think it's funny that he screamed at the staff for failing to prevent Mrs. T. from indulging in this strange predilection for watching news programs where they say stuff that's more or less true, instead of at her for not controlling herself. Apparently that's not the issue; he doesn't hope to stop her, he just doesn't want her to do it in his plane, or his bedroom. What she does in her own bedroom is her own business.

Literary Corner: A lot of people don't understand what that means

Wabash River, via Indiana Policy Review.

Why Sudanese Are No Longer Banned from Traveling in the United States but North Koreans Are, Even Though Their Goverment Doesn't Allow Them to Try to Get In

A Poem

by Donald J. Trump

Well, the people —
yeah, the people allowed —
certain countries — but
we can add countries very easily
and we can take countries away.

And as far as the travel ban
is concerned, whatever it is,
I want the toughest
travel ban you can have.

So I’ll see you in Indiana.
We’re going to go over
some more points that
have not been talked about.

Text from Think Progress.

Wilbur is Some Pig

Andy Warhol, 1962, Museum of Modern Art,  New York.

Haunted by NPR's interview with commerce secretary Wilbur Ross the other day, and a particular detail of the conversation

RACHEL MARTIN: All right. Well, we spoke to Glenn Hubbard yesterday on the program. He chaired the Council of Economic Advisers under President George W. Bush. He helped craft steel tariffs against China back in 2002. And he says they did not work. Let's listen to this.

(SOUNDBITE OF ARCHIVED BROADCAST)

GLENN HUBBARD: While you do gain jobs and incomes in protected industries, you lose more in others. You know, it's not just makers of steel and aluminum. Steel and aluminum are inputs into cars, into cans, into metal that we use. And consumers are worse off, and people don't see that.

MARTIN: As you know, prices are going to go up for these products that contain steel. So the American consumer will lose in the end.

WILBUR ROSS: That's not the case at all. Let me give you, again, the actual numbers, not theoretical hypotheses. On a can of soup, on a can of beer, on a can of soda, the total impact of the increase in metal costs will be less than one-half of one cent. A fraction of one cent is not going to change life.

No love for Hubbard, who kind of blew that with the focus on consumer prices instead of job loss, but he's an exemplar of scientific probity next to Ross.

In particular, I can't get over the unhesitating prevarication when Ross equates Hubbard's experience of being centrally involved in an imposition of steel tariffs which failed with "theoretical hypotheses", and his own prop of a soup can purchased for him by some underling (he pretended he'd bought it himself, an 80-year-old near-billionaire in a bodega someplace) with "the actual numbers" even though the Trump program hasn't been implemented (or even drawn up) yet so that there certainly are no actual numbers! What a committed fraud.

One Billion Dollars

From March 2017, via The Wrap.

Trump over the weekend, as reported by The Hill, seemed to be letting an awfully big cat out of his bag:

President Trump said late Saturday that North Korea must “denuke” before any talks with the U.S.

“Now we are talking and they ... called up a couple of days ago. They said that ‘we would like to talk.’ And I said, ‘So would we, but you have to denuke, you have to denuke,’ ” Trump said at the annual Gridiron Club dinner in Washington, D.C., Reuters reported.

“We will be meeting and we’ll see if anything positive happens,” he said.

“I won’t rule out direct talks with [North Korean leader] Kim Jong Un. I just won’t.”

He took a phone call from North Koreans? They discussed entering formal talks and he made a proposal? Actually no, it seems this did not happen. As explained by an unnamed National Security Council official and confirmed by the White House and noted in Newsweek, the president misspoke:

Literary Corner: Assembled from the Unsaid

Lnadscape by Takeuchi Seihō (1864-1942), from somebody's Pinterest again.

Poetry about President Trump, as opposed to poetry by him, is inevitably a kind of nature poetry, a study in rapid atmospheric shifts. Here, the Secretary of Commerce, one of the president's Palm Beach neighbors and a former owner of the Bank of Cyprus, tries to capture for press reporters the feeling of wondering whether the United States will be plunged next week into a trade war with some of its closest allies (Canada, South Korea, Mexico, and the United Arab Emirates, one of the main US sources for aluminum, I'll bet you didn't know that, on which a 10% import duty will be imposed, if it is raised at all, unless Trump decides to make it some other number, or make an exception for the UAE in recognition of their generous support for his son-in-law in this time of financial troubles, unless he wants to punish them for doing that because it's made him uncomfortable, or because they failed to cut him in), in delicate and mysterious brushstrokes in a tone that, as always seems to be the case with the Secretary, seems composed out of erasures, assembled from the unsaid.

Prophecy

by Wilbur Ross

Whatever his final
decision is is what
will happen. What he has
said he has said; if he
says something different,
it will be something
different. The president
has announced that this will
happen this week. I have no
reason to think otherwise.

(Text from NBC News)

Democratic senators wrote to Ross in February [2017] demanding that he disclose “the full extent of your connections to Russia”. Ross did not respond. The senators also lambasted the White House for refusing to provide answers to the questions before the vote confirming Ross.

Asked around that time whether Bank of Cyprus [of which Ross led the billion-dollar takeover from Dmitry Rybolovlev, another Palm Beach neighbor, in 2014] had any customers under US sanctions during his time there, Ross told CNN: “That’s a question that is very complicated to answer,” adding that he had never approved any such deals. [Guardian]

Trading Places

Via Indusrtrial Workers of the World.

I dared to address Loomis on this subject, for the first time since the TPP debacle, when he started suggesting that Democrats might be protesting against Trump's proposed tariffs on steel and aluminum for the wrong reason:

Does it strike you how etymologically bizarre that is, objecting to the way "liberals" "start" to defend "free trade"? I thought the simple problem with tariffs on solar cells and now iron and aluminum was that they'd clearly cost far more jobs than they saved, but.....

— YastronomicalOdds (@Yastreblyansky) March 3, 2018

With the thought that whatever "liberal" has meant from the 1850s until now has some kind of connecting thread in it, like the idea that there's an intrinsic value in generosity and offering others latitude, whether it's in poor relief or encouraging people from other countries to try to sell stuff in yours (Hayekian liberalism or neoliberalism in the strict sense being about being generous and latitudinarian with yourself, and the hell with other people).