Trade War Now
You heard it right here at The Red Ensign before you did anywhere else folks. Just a few weeks ago we reported on the trade dispute building up between America and Canada, and lo’ and behold, this trade war has built up, but this rising tension is something that has subtly been going on for a long time.
One cannot help but even wonder if it’s why the Parliament and Progressive Conservatives shy behind Trudeau who, for the first time ever in his career, has to take a step forward, and while actually doing that, he’s far too much of a doofus and far too weak (in terms of his power level) to actually take a shark like Trump on, and Trump is a shark that smells blood. To a certain extent, one cannot even help but wonder if this is why people like Kevin O’Leary didn’t want to run for Prime Minister, given that he would be faced with a trade war against someone of much greater stature.
Trump is a man who campaigned on strong trade, strong borders, a strong military, strong family values, and strong foreign policy. He wanted to put America First and establish Law and Order. He was going to bring back the economic nationalism and great politics of people like Alexander Hamilton and Ted Roosevelt. He wanted to unite the Superpowers of the World, and if they weren’t prepared to, he was prepared to make America into a powerful domestic kingdom instead of a foreign empire spread too thin. Meanwhile, Trudeau is a man who campaigned on appealing to slave morals and victim complexes. Trudeau, like many progressive liberals (including his father) and progressive conservatives alike, has only further abandoned Macdonald’s legacy of the National Policy. He wants a post-national Canada and he wants “Progress” without realizing change is not a good thing in and of itself, and that change for the best is different from change in and of itself. Change for the best comes from having consistent standards by which to employ in order to continuously improve ones condition, like the kinds of standards on traditional values and economic nationalism that Trump employs. We simply cannot expect that Trudeau will be able to win in this conflict.
The issue isn’t that Trudeau is finally taking a stand, it’s that he is not strong enough to stand up and stand straight. The issue isn’t that Parliament and the Conservatives are supporting a stronger economy in trade, it’s that they aren’t strong enough to support that kind of economy. But this paves the way for a new alternative, a populist alternative, and an economically nationalist alternative. This creates a political demand and a market for strong figures to guide Canada on the World Stage, and frankly, we have a lot to learn from Trump.
Trump started off experimenting with washing machines and solar panels to see the effect it would have on the domestic economy. Following this, he began to implement his steel and aluminum tax as a means of developing domestic industries and avoiding too great a reliance on the competitive advantage of other nations and a way of bolstering the absolute advantage of the U.S. in trade. While washing machine prices have gone up, the price of aluminum has been going down, shedding some uncertainty on the classical mechanisms at play in more open market economies, like the mechanism through which greater competition decreases prices due to undercutting competitors.
What this sheds light on is a more economically nationalist, economic mechanism, by which nations give themselves the absolute advantage in trade by giving themselves the competitive edge. Such a mechanism has been common to the history of Mercantilism in Canada and the U.K. and the history of Protectionism in Canada and the U.S., and such a mechanism has contributed to the development of the mature industries of many a nation. This mechanism is often summed up in what is called the “infant industries argument”, and it proposes that though subsidies and tariffs, national economies can become international players through developing their own economies of scale to a point of maturity. Through this mechanism, prices can even decrease as economies of scale grow and marginal cost decreases. To quote Alexander Hamilton:
“It is the interest of a community with a view to eventual and permanent economy, to encourage the growth of manufactures. In a national view, a temporary enhancement of price must always be well compensated by a permanent reduction of it.”
This kind of economic policy, while giving investors and consumers a need to buy american, also puts many investors and speculators at odds with Donald Trump, as he forces them to back the major national players that stand to gain from his tariffs. As a result, despite the 40% growth in the stock market post-election, this puts Trump at odds with the private actors in the public exchange. Many people are trying to short him solely to make his measures look bad.
We wonder where all of our debt comes from, yet we have an economy that thrives off of speculation and excessive competition, and the capital lost in the process is not efficiently reallocated, it just builds up as bankruptcies are declared and banks are bailed out. For this reason, one should be very skeptical of Progressive Conservatives as well, who’s tendencies are just as Neoliberal, and who care more about lowering taxes in order to encourage foreign investment and foreign enterprise rather than using subsidies and tariffs to build up the national economy as MacDonald did under his “National Policy”. This makes one wonder if there is a swamp to drain in the public exchange as much as there is a swamp to drain that is made up of elected representatives backed by neoliberal “technocrats” although, perhaps the more accurate term is “Plutocrat”. And perhaps we need to learn from Christ, seize our whips, and drive the money lenders from the temples.
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