What Would the Trump Economy Really Be Like, How to Understand a World Melting Down, and…an Apology

I’m Umair Haque, and this is The Issue: an independent, nonpartisan, subscriber-supported publication. Our job is to give you the freshest, deepest, no-holds-barred insight about the issues that matter most.

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Quick Links and Fresh Thinking

1. Secret Russian document offers rare, official glimpse into campaign against West (WaPo)
2. Climate crisis: average world incomes to drop by nearly a fifth by 2050 (The Guardian)
3. Where does culture come from? (LRB)
4. With his Truth Social stock, Trump may be laughing all the way to the bank — but his investors have reason to weep (LA Times)
5. The MAGA Right is Flirting With Political Violence (Vanity Fair)
6. Distrust in elections spreads in democracies around the world (El Pais)
7. We Were Promised Innovation, but Got AI Chatbots Instead. Here's Why (Inc)
8. America’s trust in its institutions has collapsed (The Economist)

Hi! How’s everyone? Thanks for joining me here, and a special welcome to new readers. Today we’re going to discuss the Trump economy, eventually, after I begin with a little…

An Apology, or Constantly Being at Each Others’ Throats is Not Good For Us

I want to mend some fences this week. We should all do so from time to time.

So. An apology. Over the years, I imagine that people get offended or hurt by some of things I have to say. I’m sorry about that.

Let’s talk about it for a moment. This is how it is on social media. We divide into warring clans, and pick one another apart. Minor differences get amplified, and major ones, never resolved. It’s a..bad…thing. A terrible form of culture and social interaction. A norm that we need to discard now.

And I’m as guilty of it as anyone. Over the years, as I sort of rose to a little bit of prominence, I’d…fight. Fight back, I imagined to myself. But that was foolish and wrong of me. In a world this divided, this is how we’ve learned to be, and of course, I fell into this trap more so than a lot of people. Spats, skirmishes, quibbles—and worse.

It wasn’t good for me. How could it have been? I still remember the time, vividly, when an activist for some cause or other called me a “murderer,” and I was sort of left reeling. I tried to “defend myself,” but what are we really defending or impugning, in these little battles? I’m not a murderer, obviously, but I was hurt, and lashed out right back. But for weeks, months, I was sort of haunted, humiliated, weirded out, because I didn’t know…what else to do.

You might say: that’s much of an apology. If you really want to play the game I’m talking about. But I’ve already said what I think I need to, and this game is what’s driving us all a little bit insane. Is it really worth bickering and squabbling over…little things? Is this how we really want to spend our lives?

Not me. Not anymore. And so for the last couple of years now, I’ve retreated from this form of interaction. Twitter? Barely use it. Funnily enough, I checked out LinkedIn, and this sort of micro culture as war is even prominent there now, in an indication of how omnipresent it is. That’s one of the reasons we set up The Issue, by the way. I think the perpetual battle is an awful way for us to…be. Exist. 

What does it yield? You see, if you’re a certain kind of person, you can make a whole career out of being a Very Nasty Person Online. You know who I’m talking about—manfluencers, mostly, who win notoriety, and a kind of hushed acclaim, for saying crazy, demeaning things, like maybe women aren’t people, or sex and money are all that matter in life, and so forth. But the rest of us…can’t win this game…even if we play it, nor should we to begin with. 

If you’re a woman or minority or both, the instant you attempt to…be not like those guys, but just…I don’t know…unyielding, tough, honest, and maybe a little bit demanding…you’ll be tarred and feathered as “controversial” or “combative” or “difficult.” So of course the second I’d get involved in these foolish brouhahas, they’d say I was this sort of character. And I’d wonder to myself: how is all this even happening? I’m not a fighter. I loathe conflict, and yet here I was, sort of enmeshed in it day after day. So, like I said: I’m sorry.

Understanding a World Melting Down vs Judging and Reacting To It

What’s happening to us, exactly, as we descend into war-as-a-form-of-discourse-and-interaction? What we’re doing is standing in judgment of others. And that’s easy to do, in a divided world. When I predicted the rise of Trumpism, and its ilk, even I was baffled. The economics told me with absolute confidence it was going to happen, but the person in me was still bewildered: how could you become a fan of a person like Trump?

Today, I think I’m an advocate of a gentler approach. Let’s call that…understanding. Not “understanding” as in the sort of dishonest way of mutely “being understanding,” or just sitting there in silence. But genuinely understanding.

Today, I try to understand. Not just in the sort of academic way—the economics tell me these Big Transformation are Going to Happen. But at a human level. And when I do that, I begin to get it. 

Let’s take Trumpism. I get why people are this attracted—let’s just call it what it is, there’s this weird erotic charge to it—to Trump. He emanates strength and purpose and firmness in a world going haywire. We all know our institutions and systems are broken, and at least he admits it. There’s a kind of nugget of truth there, even if what comes next—the scapegoating, rage, Big Lies, coup attempts, etcetera, is pretty odious. After all, it’s not Trump that we’re trying to understand, just his flock.

You see, we’re all sitting in judgment of one another in this divided world. The Trumpists and their ilk think everyone is a godless heathen, maybe an “invader,” maybe not even a “real” person. That’s judgment to the extreme. So should the rest of us…judge them right back for it? It’s human to want to do that, and it leads to…a place of retribution, really. Look at these idiots! They hate us! Get them back! Get them first!

The side of democracy can’t really win this way. Its job is much harder than mere power or dominance. Only by winning the desperate and broken back into the fold can it prosper again. We should think of people who’ve turned away from democracy as something like religious converts. Have you ever had a friend who suddenly found religion to an extreme degree? And turned fundamentalist or fanatical? That’s sort of what’s going on here, and we can’t win just by out-arguing them. But only by converting them back.

And to do that, just sitting in judgment isn’t going to work. It hasn’t worked for Biden, after all. It hasn’t worked for any liberal or democratic institution or force, who are all only weakening by the day. Judgment’s easy—but we need to desperately understand the reasons why so many people are turning to conflict and demagoguery, and that means really sort of empathizing with, grasping, seeing, holding, how broken and afraid and hurt they really are.

The path of judgment leads right through to the battlefields of what’s become everyday social  life, and that leads nowhere. We’re in a kind of Cold Civil War already, in many societies, where, sure, we aren’t kind of gunning each other down, but we’re beginning to genuinely despise one another, and take every opportunity to sow conflict and enact retribution. Where does this end up? In, as Alex Garland’s new movie suggests, actual civil war. Or something very much like it, whether it’s authoritarianism or fascism or what have you.

I think I’m on the side now of understanding for all those reasons. But I mean that in a true way: not sitting in judgment, while biting your tongue, resentfully saying the same things in your mind you want to scream online. But actually trying to understand what it is that’s motivating this self-made series of collapses, how deep these feelings of betrayal and abandonment and neglect really are, why they erupt in rage and fury, how they erotically charge figures like Trump as salvational near-religious icons. 

None of that means merely “tolerating” it, accepting abusiveness, or being complicit in sordid hate, by the way. But it does mean something more challenging than I myself used to do, which is give the rage and spite right back, only harder: find what slender thread of human connection remains, if one does at all, between us.

What Would the Trump Economy (Really) Be Like?

That’s a lot of goopy stuff. Now let’s talk about some hard stuff. I’m sure you’ve been dying, practically sobbing, for a Hat-Wearing Economist to tell you the ins and outs of Trump’s latest plan, crazy as always, to devalue the dollar, by delving deep into…macroeconomics.

Well, here I am. Don’t worry, I’m going to simplify it, and try not to bore you to death at the same time.

In case you haven’t heard, Trump’s latest crazy plan is to…devalue the dollar. One of Trump’s advisers is a guy called Robert Lighthizer, who appears not to really understand how economics works, I know, what a surprise, and his Big Idea is…just this.

All of this tells us what the Trump economy will (really) be like. So what’s this going to do? Oh, just cause probably another huge inflationary shock, and send prices skyrocketing all over again, maybe even higher this time.

Why is that? Devaluing currencies does two things. It makes imports more expensive, and it makes exports cheaper. Now. Trump and his advisor want to devalue the dollar so that exports are cheaper, and America’s trade deficit “falls.” 

There’s only one Incredibly Big Problem with that, which should make anyone with a bit of common sense groan. America imports much, much more than it exports. So of course the effect on imports will be devastating for the average person. Imagine all that stuff you buy now—from China, or Vietnam, or India, or wherever—is suddenly 10, 20, 30% more expensive. I’m sure that made you shudder, because who isn’t feeling the pain of inflation these days? 

So even if it makes America’s exports “cheaper,” the countervailing effect on import prices will be ruinous for the average person—there’ll be an inflationary Big Bang. 

That’s what the Trump economy is really going to be: a stagflationary mess that does nothing to solve the problems of the average person, which are fast declining living standards.

Now. Let’s add a wrinkle to that freshman level analysis, which is that it probably won’t work anyways. This idea is based on a treaty, or “deal,” that happened in the 80s, called the Plaza Accord. America then was beset by cheap Japanese imports, and so, after a lot of hoo-ha, a deal was struck to basically devalue the dollar. But even then, it was incredibly hard to do. America, Europe, and Japan all had to cooperate, and rebalance their national budgets, and continue that cooperation for decades—and the price for Japan was decades of stagnation, as the yen rose and rose in value, killing jobs and industry.

Can you imagine anyone much wanting to cooperate…especially like that…with Trump? Today, that deal would have to be struck not just with Europe and Japan, but with Europe, Japan, China, Asia’s trading bloc, South Korea, Canada, Australia, and many more. Good luck getting them to cooperate for decades with a Trump administration. 

So all this approach is likely to do is trigger a full on currency war. That’s what trade wars often result in. Nations try to competitively devalue their currencies. That has a devastating effect on societies which try to do it, for a very simple reason. How do you “devalue” a currency? A Treasury and or Central Bank has to sell it, which they do by buying other currencies. That costs money. Money which should be used for better and more productive things, like, in America’s case, everything from healthcare to infrastructure to education and beyond. 

Trying to competitively devalue a currency is one of the world’s most foolish games. It’s why large parts of the world, from Latin America to Africa to Southeast Asia, have been mired down for so long. Trying to somehow gain a path to “cheap exports,” the price was functioning societies—and ruinous inflation, too.

So that gives us now a fuller picture of the Trump economy. Stagnation. Inflation. And a lack of investment, which comes from the futile act of trying to devalue the dollar, basically, ironically, handing money to other countries, buying their currencies en masse. Pretty foolish—and incredibly self-destructive, because America’s already in a bad place, economically, despite the Biden team’s sort of eye-roll inducing claims that “everything’s great!” Imagine a decade or more of stagnation, inflation, and underinvestment in everything that matters, because the effects of the Trump economy would last easily that long, even if he ever leaves office.

I know, I know. Maybe that doesn’t sound too “understanding.” But really, it’s an example of what I mean by being understanding. It’s a sort of warning, to those who really believe, unfortunately, that “the economy will be better under Trump.” It won’t—the tailspin above will begin to happen. And yet, at the same time, I get why people believe that. They’re desperate for anything to get better, and anyone to offer it to them, and along comes Trump, with his (ew) erotic charge. So here we are. I get it, and I have to warn, and that’s not a judgment…it’s more like a…hey, dude, that’s a cliff, not a swimming pool. Don’t jump.

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