People need to accept that the world’s wealthy are tired of having to pay a premium for intellectual labor from US citizens. They can get it cheaper elsewhere, and they plan to.
The goal is not to bring the rest of the world up to the US’s standards of living, the goal is explicitly to bring the US standard of living down to match the rest of the world. They want us to accept lower pay and a lower standard of living, and they’re willing to tear it all apart and divide us so we’re at each other’s throats fighting for the scraps that are left.
As I’ve said before, the wealthy are in “let’s strip mine this bitch!” mode because they have decided the US citizenry do not offer the value they want or need anymore. The “shining city on the hill” is now a slum and they want to keep it that way.
Literally I have been saying for at least a decade now that it has felt like wealthy have had a plan to just give up on the US, and now it’s coming to fruition. They’ve extracted the wealth, and now they’re hanging us out to dry.
The goal is not to bring the rest of the world up to the US’s standards of living, the goal is explicitly to bring the US standard of living down to match the rest of the world.
America already has most indicators of standards of living near and even below the bottom of OECD measures.
Average lifespan, child mortality, litteracy, crime, bankruptcies etc. Why do you think Canada collectively threw up their lunch when the Cheeto Benito threatened us with having to live like Americans? No one wants to go down to your standards.
It’s not that they’re strip mining it because the value proposition isn’t there. Generations past, towards the end of the guilded age, we saw that the wealthy could meaningfully invest in and elevate society and still be fabulously wealthy. We see as much in the modern day with McKenzie Scott. It’s more that ripping out the plumbing and wiring is quick and easy, and that’s all anybody cares to do anymore. Why make $100 in ten years when I could make $3 right now? This is the natural and probable outcome of the way we’ve allowed our economic system to run, especially but not exclusively since Reagan embraced supply side economics and rejected the Great Society view of America. It’s a race to the bottom, and always has been. That’s what’s always been lurking under the “bring manufacturing back from China” narratives, since Chinese factories have such fabulous features as unknown chemicals that make you just drop dead sometimes (electronics manufacturing), on-site bunk houses, and suicide nets.
The empire’s been slowly eroding since the Vietnam war, and especially since the end of the cold war was apparent. It finally ran out of other places to fuck up for cheap gains, and it’s turned in on itself to try and keep those cheap gains coming. We all know you can’t survive, let alone thrive, by eating your own flesh, but the wealthy are all so goddamn short sighted that they’re quite happy to try feudalism part 2: surveillance state boogaloo.
The thing that kills me is that we were the wealthiest nation on earth, we had it all, we could have had an absolutely outrageous standard of living for everyone in terms of healthcare, education, scientific advancement for the benefit of all mankind, etc. and we literally blew all of it out of our ass blowing up brown people and giving it away to like ten of the wealthiest people. It’s such a disappointment to think of what could have been.
This has always been the case and intellectual labor isn’t special other than the training lacking in some parts of the world. The owner class has always worked to lower the standard of living in the US with only organized labor preventing or slowing it down. Perhaps a secondary factor standing in the way of this process used to be the restriction on movement of capital prior to free trade taking over the world. That meant the owner class would face the contradictory effect of suppressing labor costs - decreasing demand for the goods they sell and profit from. Now that owner capital has moved around the world however, they can utilize the aggregate demand of many countries to keep themselves rich, even if there are fewer people in each country that can afford their products. I think in effect this frees them to depress wages in the wealthiest countries in the absence of strong organized labor.
The US has been living on credit cards for decades now. The rest of the world has supported it because the most important thing for everyone is stability. With trade agreements getting ripped up, and nonsense tariffs everywhere, supporting Americas consumption habits is not necessarily in the world’s interests anymore.
Canada alone holds almost $500 billion in US debt. Europe and Japan hold another $2.5 trillion in US debt. America is picking fights with people who can bankrupt them.
Quite true! Our economy has been held together with duct tape, hope, and the money printer going brrrrr for the better part of two decades now.
People forget that something like the TSA was essentially a jobs program to boost Bush’s weak economy.
I remember working in TV and getting very upset at my coworkers defending Bush and Henry Paulson asking for $700 billion to bail out the banks, telling them that if we didn’t solve these problems the hard way at the time they would grow and fester and become harder and harder to fix without complete disaster. I often wonder if my coworkers recall that conversation the way I do.
Some material bits here - the US can’t run out of dollars so they can repay all of this debt, since it’s denominated in US dollars. The foreign countries can’t force the US to give them dollars in place of the bonds they hold, as far as I’m aware, since those bonds have predefined maturity dates. The US only has to pay their value in dollars as they come due. Which they can always pay. So bankruptcy from foreign debt isn’t on the cards. What foreign countries could do is not buy new US debt with the dollars the US pays them as bonds mature. That would leave the above mentioned dollars in international circulation and therefore devalue the dollar. And that would have implications on what the US can buy from other countries. Arguably this is the intended goal of Bessent and Miran. Although they were hoping to achieve it by getting other countries to appreciate their currencies against the dollar via Bretton Woods-style agreements.
There’s also the issue that the US needs to sell bonds at higher and higher yields just to convince them it’s worth the risk.
As far as I understand it (not an economist), that might lead to a debt spiral.
Yeah that’s a related effect as far as I understand, but it depends on how the domestic debt market reacts, as in whether it absorbs the difference. Also it depends on whether the US government continues the policy of issuing debt when creating dollars. They could just stop doing that. They don’t need debt to finance spending, they’ve just historically done so. That said I don’t know if they’d actually do that since they’re ideologically opposed to this sort of monetary policy.
You are correct. “Bankrupt” is a little strong. But selling existing bonds back into the market while the U.S. is trying to issue new debt would not be great for America. I think dollar devaluation is 100% in the cards.
Depending on the type of bond you absolutely can turn it in for dollars early.
Oh. Is that the kind of bonds the US government issues?
The us issues many different kinds of bonds some you can’t sell for 6 months at which point you can turn them in for cash at any point or wait forbthem to fully mature
They can certainly issue new dollars to pay them, but if they flood the market with new dollars, the value of the dollar drops, and inflation rises and market loses even more confidence in the value of the dollar.
The value of having a stable economy with stable dollar was ability to issue bonds on that amount. Nobody wants to get Russian ruble bonds atm. That isn’t quite the case for the USA, but the market of buyers has shrunk.
The reduction in value of the dollar relative to other currencies would occur pretty certainly and that’s something some in the Trump admin want because it would make US exports cheaper and therefore they expect it to reduce trade imbalance. Whether the extra dollars result in inflation is an open question. Increasing money supply does not automatically produce inflation. Inflation only results if the economy is at absolute capacity, that’s no more units of goods and services could be produced or rendered. This is rarely the case. In this case we’re taking about new dollars appearing outside of the US. Unless the US cannot export more units of goods and services than they do today, the prices of those goods and services wouldn’t increase as a result of the extra dollars. Instead the extra dollars would allow other countries to buy more goods and services from the US. E.g. more MS Azure cloud contracts, more OpenAI service contracts, more soybean, etc. Whether these countries would do that or decide to just stash the dollars, or burn them, or use them to trade with other countries is an open question.
bring the US standard of living down to match the rest of the world
You are a USian, aren’t you?
… the wealthy are in “let’s strip mine this bitch!” mode
because …That’s just the default condition.
Tariffs raising the price of goods is all well and good, but interest rates control the money supply. Goods prices can rise however there is only so much cash available to buy things, so we are getting lower corporate margins and a recession, not inflation.
Though we will see if Powell is fired too.
It’s not fucking “strange”.
It’s Canada, Japan, the EU, and our other former allies retaliating against the US trying to use absolutely asinine and ham-fisted tariffs as a cash grab/shakedown by engaging in strategic retaliatory fiscal policy.
This is actual 4D geoeconomic chess. Because if orangeboi doesn’t listen and they keep going, the USD standard goes away.
It’s also American business interests losing faith in fascist America. Stupid ideas have painful consequences.
You say that like Brexit wasn’t the most successful political victory in the history of the world.
And you say that like there were no painful consequences to brexit
Yeah /s
Beat me to it. ;)
lol I didn’t need the /s
Interesting that Carney was opposed to brexit but managed their central bank through it (as the first foreigner to run it, they wanted him that much) and now is part of, if not coordinating, the fuckyoudonny group of leaders selling their us bonds. Dude seems mild but should scare the shit out of the GOP.
Snort that propaganda long enough youre bound to do something stupid
The wealthy are no longer constrained by borders, so they don’t actually care if the US hegemony fails. They have investments all over the world.
He is forcing the rest of the world to wean itself off of the US. Good job MAGA.
This is the fully realized American Exceptionalism mindset. Trump thought the entire world was going to bend over backwards to deal with us because the USA is so great and awesome they had no choice.
What’s the article have to say about why the selloff is strange?
- it reflects something more ominous as President Donald Trump tries to reshape global trade: a loss of confidence in the U.S.
- Global trust and reliance on the dollar was built up over a half century or more … But it can be lost in the blink of an eye
- the dollar has fallen 9% against a basket of currencies, a rare and steep decline
- It is no longer hyperbole to say that the dollar’s reserve status and broader dominant role is at least somewhat in question
- the ballooning U.S. federal debt, which is already at a risky 120% of U.S. annual economic output … Most countries with that debt to GDP would cause a major crisis
- he will force interest rates lower to boost the economy even if doing so risks stoking runaway inflation. That is a sure fire way to get people to flee the dollar.
- This is the first step down a slippery slope where international confidence in the U.S. dollar is lost
Hm, strange indeed. It’s just happening on its own and nobody can put their finger on why. Better say it’s “strange” and not “POTUS is intentionally destroying the US’s global standing via disastrous and illegal policy”
This is the AP bullshit I keep talking about in those stories about how the whitehouse has drop-kicked them from the press pool. And I keep getting downvotes from well-meaning journalism students who think the AP is not as bad as the NY Post.
“Strange” the billionaire class following the plan to steal America from the People for their own gain
