Some more interesting replies on Reddit:
On hegemony, the ruling oligarch class sees the writing on the wall that China is overtaking the US in almost every aspect, and that in the future there will be no plays left to reclaim the lead (see Nature Index). Going to the extreme, the only real advantage the US still currently has is its 2nd strike nuclear sub capability, but China’s advancements in this area (in terms of subs and detection) are neutralizing this. In any case, it’s not really necessary to talk about this further because capitalists don’t make money in this scenario.
So, it’s not so much the US maintaining hegemony, for which its ending is now a foregone conclusion, but preserving what will remain of its sphere of influence, with the recognition going forward that it will have a much smaller slice of the pie. This is what Greenland, Panama Canal, Canada 51st state, and Ukraine rare earths are all about - desperate US gambits to preserve influence while it still can in the face of an indomitable China (in strategic partnership with Russia). These moves are all on the back foot and defensive in nature. Coupled with bullying your little brother Europe, these actions signal weakness, not strength.
Financially, the US government has no money, and anything/everything it wants/needs to do, it has to issue bonds. It now even needs to issue new debt to pay the interest on the old debt. But at the same time the oligarchic ruling class also wants to give itself a big tax cut. So here’s the dilemma: How to do a massive tax cut for the rich, while not totally blowing up the deficit so as to keep the bond market happy (so they won’t ask for too high of an interest rate on new debt?)
The Chump/Elmo solution is to use DOGe to cut spending, and to use tariffs to increase tax revenue. But these two disproportionately affect the labor class (the rich don’t need SNAP for their kids or NSF funding for their research, nor do they buy poop at Walmart, where everything will be 30% more expensive). So, it is as it always was - capital benefits at the expense of labor. The tax cut to the rich will be funded by the reduction in public services and tax increase on workers.
The currency devaluation and re-shoring manufacturing hypothesis only goes so far because China-imported goods are multiples, 2-5x, cheaper than US made equivalents. In many cases a 100% tariff would still not make US goods competitive, nor would a large depreciation in the dollar.
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This seems like a mess and I want the same drugs he is taking.
Firstly he assumes the guy who said to consume bleach to treat COVID isn't an idiot but is just misunderstood by critics. Ok I will let this slide for now.
This masterplan can be summed up as trying to use fiscal poLicy instead of industrial policy to boost manufacturing.
According to the argument Trump eventually wants the USD to depreciate but still remaining the reserve currency, which runs contrary to the Griffin dilemma. This can't be done via market principles but can be done by Trumps masterplan. The reason he wants the USD to drop is to maintain American exports, and hence manufacturing will rise again. Which is difficult to do if the USD is the reserve currency as there will be high demand for it.
Tariffs are the first step. It will cause an appreciation of the USD in contrary to the eventual masterplan, but it's explained this is temporary. Interesting he feels this will likely 100% offset the increase in costs due to tariffs, and he is very clear on this.
Next step is to get other countries central banks to appreciate their currency by decreasing interest rates. Um what? Decrease in rates will decrease demand for your currency because investors make less money. This will cause the currency to depreciate, so the USD is still high (from the tariffs) and goes even higher. But even if we assume it's a typo most central banks are largely independent from the central government, and Trump negotiates with the government. So not sure how they will do so unless governments all over change the mandate of the central bank.
But let that slide and assume central banks adjust interest rates (presumably up) to appreciate their currency or just outright state a new value for their currency which is higher (historical precedents like this exists with Saddam's Iraq at one stage saying it's currency was worth three times the USD bug was never tested in the market), then what?
Presumably American imports become higher again and then it causes America to start manufacturing again. The reason the master plan needs to do what I described in a roundabout way is that it supposedly allows the USD to retain it's reserve currency status.However a drop in the USD will not allow American manufacturing to be competitive again because it's not just a matter of exchange rates. In the age of controlling most of the supply chains, automation etc I don't think just having a low currency is enough when manufacturing techniques is so much more advanced. Maybe I am missing something.
