Apr
2025
I’m So Bored With the USA: Be Careful What You Wish For
DIY Investor
28 April 2025
“It seems I’m the victim of natural selection
Meet me on the other side, another direction”
As UK voters go to the polls on Thursday, they have the benefit of seeing what populism offers in the shape of President Trump.
One of Trump’s big promises was to fix the economy on Day 1, but, as the words of a Trump voter from Missouri highlight, this hasn’t happened… “I felt this year was going to be a dramatic change for all the better. But there’s all this darkness that’s already here and it’s only April.” (1)
One of the keys to delivering this economic salvation was tariffs which, if anything, have made everything much worse.
Some commentators latched onto Honda announcing they will move production of their “Civic” from Mexico to Indiana as prove that tariffs work.
But, when you look under the bonnet, they aren’t starting production until May 2028, and they are moving production to an existing plant, not a new one, ending production of one model, and building Civics instead.
No new jobs are being created, and Honda have said, that “Such a move will depend on future market conditions.”
The tariff war with China is backfiring spectacularly, with retailers warning that their shelves could soon be empty, thanks to the havoc of Trump’s tariffs on the global supply chain. With container traffic across the Pacific from China down by C.60%.
‘The tariff war with China is backfiring spectacularly’
Another of Trump’s promises was to secure a lasting ceasefire between Israel and Hamas in Gaza. When that didn’t work, he seemingly got bored and moved onto ending the war in Ukraine.
Under Biden the US fully supported the Ukraine and was damning of Russia’s aggression, now, under Trump, the US has switched sides, backing the invaders against the invaded. In his hurry to broker peace Trump is prepared to hand Putin almost everything he wants, including a Ukrainian surrender.
Trump, the master negotiator, seems to believe that getting Putin to stop the war, rather than allow Putin to conquer all of the Ukraine, was a “pretty big concession”.
In addition, Trump’s fee for acting as peace-broker and for a degree of US protection is 50% of the revenue from Ukraine’s minerals, ports and infrastructure.
This has the makings of a new world order, or, perhaps, more accurately, a return to the order of the old world, where big states simply swallow up smaller ones. Where unprovoked aggression and conquest are no longer challenged, as they were post-1945.
Trump’s eagerness to acquiesce in Putin’s seizure of Ukraine makes him an accessory to an act of war that contravenes international law, is, perhaps, in-line with his domestic actions which have led people to question whether the rule of law still operates in the US. There is a clear case for this supposition, with Trump defying the orders of the US courts on multiple rulings, such as decisions delaying or overturning the deportation of migrants without due process.
‘a return to the order of the old world, where big states simply swallow up smaller ones’
A former justice department official, fears that if the Trump administration continues to refuse to comply with the law as laid down by the courts, “We will have a true crisis on our hands. They are testing the limits.”
In addition to taking on judges, lawyers, NGOs and the media , the Trump administration is also taking on the universities, accusing Harvard of being a “threat to democracy”, attacking their diversity, equity and inclusion efforts and their failure to root out antisemitism.
His administration is demanding that Harvard include federal oversight of admissions, dismantles their diversity programmes, ends the recruitment of international students “hostile to American values”, and the compelled hiring of “viewpoint diverse” staff.
Harvard is fighting back, its president, Alan Garber, wrote: “The University will not surrender its independence or relinquish its constitutional rights”. Their decision to sue the government over the freeze on $2.2bn in federal funding, part of a threat to withhold $9bn, has encouraged others, and over 150 university presidents have signed a joint letter denouncing “unprecedented government overreach and political interference”.
Harvard, in fighting back, is defending not only academic freedom, but democracy more broadly and inspiring others, such as the 50501 community.
The movement – pronounced “fifty-fifty-one”, meaning 50 protests, 50 states, one movement – first called for a day of action in February, with local organizers leading protests in their cities and towns.
The protests were over the dismantling of agencies, policies and norms, slashing through the federal government, and the fact that weren’t seeing dissent from their elected leaders.
Hunter Dunn, the national press coordinator for the movement, said: “Trump and his cronies are actively trying to take over our country and destroy our democracy, and the Democratic party is not doing enough to stop them, so people are going to step in.”
After protests in February and April, another is planned for May Day.
The movement describes itself thus: “50501 is not an organization. It is not a company. It’s not a brand, club, or influencer. It is an agreed-upon idea to end the executive overreach of the Trump administration. Do not look to 50501 for leadership or permission to hold your own government accountable. The time has come for you to get involved. You are 50501. Together our voices cannot be ignored.”
‘The time has come for you to get involved. You are 50501. Together our voices cannot be ignored’
Polls are starting to reflect peoples concerns; along with poor ratings on the economy and immigration, a survey released on Saturday found that only 24% of Americans believe Trump has focussed on the right priorities as president.
A poll by the Associated Press-Norc Center for Public Affairs Research published this weekend, found that 54%, of Republicans surveyed said that Trump is focussed on the “right priorities”, while only 9% of independents said that the president is focussed on the right priorities – with 42% believing Trump is paying attention to the wrong issues.
Thirty-nine percent approve of how Trump is handling the presidency overall, and C.40% of Americans approve of Trump’s approach to foreign policy, trade negotiations and the economy.
A New York Times/Siena College poll found that Trump’s approval rating is 42%, and just 29% among independent voters. More than half of voters said Trump is “exceeding the powers available to him”, and 59% of respondents said the president’s second term has been “scary”.
We now turn to the UK and our own Trump tribute act, Nigel Farage.
‘Reform, have picked-up where UKIP left off, scaring the life out of the Tories’
His party, Reform, have picked-up where UKIP left off, scaring the life out of the Tories.
Whether he was misquoted, misunderstood, or whipped into line we will never know; but Robert Jenrick, the shadow justice secretary, has qualified his comments regarding “coalition” to “unite the right” at a meeting of Tory activists last month. Apparently, he was referring to a rejuvenated Conservative party bringing Reform defectors back to their “natural home.”
Whilst there is a considerable ideological overlap between Reform and Tory platforms, their potential support does not come from a single pool of interchangeable voters.
Farage’s initial appeal is to voters whose trust in the Tory party is irretrievably broken and see Farage as an alternative to the old, perhaps broken two-party system. Any agreement or coalition with the Tories would undo much of what Farage has achieved with this voter pool.
Equally, Tory voters who defected to the LibDems in 2024, may not be irretrievably lost, which could be the case should the party throw in its lot with Farage.
The new Tory leader, Kemi Badenoch, has, to date, failed to identify a strategy to rebuild a broad base of support. She offers no insight or contrition when it comes to the role that the decline in public services played in voter rejection of the party, expending her energy on culture wars rather than focussing on real-world policy development.
Farage in turn is portraying himself as a man for all seasons, buying votes with whatever appears to hit the right notes with voters, describing net zero as “lunacy” and vowing to scrap carbon targets entirely.
Nothing seems too low for him, although last weeks comments where he claimed that the UK is “massively over-diagnosing those with mental health illness problems”, plumbed the depths.
In response, the National Autistic Society described his comments as “wildly inaccurate”, and accused him of perpetuating “stigma” and making life harder for disabled people.
I have to be honest and say that I find everything about Farage and Reform distasteful, however I, and others, might prove to be distant voices. Robert Hayward, a pollster and Conservative peer, believes Farage would win up to 450 seats while the Conservatives would lose up to 525 in the local elections. Reform was also said to be on course to win two mayoral contests, according to a YouGov poll.
Whilst I have sympathy for voters in the post-industrial heartlands in the Midlands and north of England, Reform isn’t the answer.
As Paul Nowak, general secretary of the TUC, said, Farage is a “political fraud and hypocrite” who is “cosplaying” as a working-class champion in order to win votes at this week’s local elections.
‘a “political fraud and hypocrite” who is “cosplaying” as a working-class champion in order to win votes at this week’s local elections’
Nowak, in a stark rejection of the Reform UK leader’s attempts to court the trade unions, said there were “massive contradictions” in Farage’s positions on issues ranging from workers’ rights, the economy, industry and Brexit.
Nowak warned voters tempted by Reform, saying: “They got 4 million votes at the last election, of course there’s a lot of disillusionment with mainstream politics,.
“But there isn’t a bandwagon that the fella isn’t prepared to jump aboard if he thinks it’s gonna result in more votes. I think people will see that lack of consistency, lack of political honesty, lack of coherence. He promises all things to all people.
“I get why people might be attracted in the short term. I think it’s partly my job to say to people, well, don’t just listen to what he says, look at what he does. He’s directly voting against the interests of millions of working people.”
Nowak also urged Labour not panic and learn the wrong lessons from the anticipated results by pitching to the right, telling Keir Starmer he has a huge parliamentary majority of 170 to drive through change.
‘there isn’t a bandwagon that the fella isn’t prepared to jump aboard if he thinks it’s gonna result in more votes’
Perhaps there are signs that Labour is beginning to realise the strength of their position and, that the Trump-induced chaos, leaves them scope to propose the previously unthinkable. Chancellor Reeves appears to realise this opportunity, saying : “I understand why there’s so much focus on our trading relationship with the US but actually our trading relationship with Europe is arguably even more important, because they’re our nearest neighbours and trading partners.
“Obviously I’ve been meeting Scott Bessent this week whilst I’m in Washington, but I’ve also this week met the French, the German, the Spanish, the Polish, the Swedish, the Finnish finance ministers – because it is so important that we rebuild those trading relationships with our nearest neighbours in Europe, and we’re going to do that in a way that is good for British jobs and British consumers.”
It is reassuring to hear a Labour minister talk like this given that the government is normally very nervous about sounding too “remain”, and the statement somewhat undermines Starmer’s ‘false choice’ argument.
A poll by Ipsos Mori, which has been tracking net economic optimism in Britain since 1978, found that 75% of Britons expect the economy to get worse over the next year. Just 7% of Britons think the economy will improve, while 13% thought it would stay the same, equating to a net score of -68.
Now is clearly the time to think the unthinkable.
“This dream won’t ever seem to end
And time seems like it’ll never begin”
Notes:
Another article about more madness, as populists continue to cause chaos, uncertainty, and further inequality.
In “The Blank Generation” I talked about how the middle-classes were being impacted by inequality and the cost-of-living; it is reported that nearly 1/3rd of Brits lose sleep at night, worrying about their finances.
The biggest retail growth sector is food-banks as working-class families struggle to put food on the table, a fact we commented on in “Heavan Knows I’m Miserable Now”. In “The End”, I reported how in 2010 there were 35 food banks provided by the Trussell Trust, today there are nearly 2,900.
Recessions come and go, but the issues facing consumers; inflation, rising taxes, crashing government services, declining real incomes, the unaffordability of property have been years in the making, and will take years to solve!
There is, unfortunately, no magic, quick solution. As Trump’s follies show, populists don’t have the answers, they are simply allowing people to vent their grievances by stoking hatred.
Trump and his horde saw a situation not dissimilar to the 1930’s and responded with the politics of that era. He, and other populists recognised these dynamics offered a route to power, playing on the travails of both the working and middle classes who felt left behind as they were “victimised” by unfair foreign competition, and illegal immigrants stealing their jobs.
The reality is somewhat different. Their jobs were destroyed by neoliberalism, whose free-market principles saw the factories and industries they worked in as inefficient, unable to compete and out-of-date. Free-markets determined that they closed, the jobs lost, offshored to cheaper to manufacture domiciles.
The economy became dominated by financial services, within this were private equity firms leveraging-up what businesses were left, leaving them overburdened with debt repayments. The new tech businesses found it cheaper to produce goods overseas, and hired cheaper foreign talent rather than training Americans.
All of this created massive prosperity for the few, and generated positive economic data that papered over the cracks. As I wrote in “A Different Class”, all the last 40-yrs has done is to create a group of people with nothing to lose, meaning they have little to regret, and will happily burn the whole system down.
In short, a fool’s paradise, based on American exceptionalism, whilst all the while overseas competition was quietly leaving the US in the past.
Brexiters will gleefully tell anyone who will listen that things aren’t great in Europe, and that the UK is better off alone. But, the story is the US which appears to be teetering on the edge of an abyss. It was previously said that if the US sneezes, the rest of the world catches a cold. Today, as the chief economist at UBS Global Wealth Management said: “This is not the US sneezing. This is the US cutting off its own arm.”
Lyrically, we pay tribute to David Thomas, originally of “Rocket from the Crypt” the mid-70s Cleveland band he went on to form the hugely influential Pere Ubu. We start with “Final Solution”, and end with “30 Seconds Over Tokyo.” Enjoy! Philip.
@coldwarsteve
Philip Gilbert is a city-based corporate financier, and former investment banker.
Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s
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