Those who fail to study history are doomed to repeat it. Look no further than the impact on the stock market and the implementation of tariffs. Donald Trump announced April 2 as Liberation Day implementing tariffs on countries over the world. The result, April 3rd the Dow dropped 1,679 points or 4% and the next day it plummeted 2,231 points or 5.5%. Coincidence? Hardly. This marks the first time ever the Dow has dropped more than 1500 points in two consecutive days.
Donald Trump is not only wrong, but he is also simply delusional if he thinks tariffs are good for the economy. Every Economics professor will tell you the perils of tariffs. To think other countries will not retaliate with tariffs of their own is simply naïve. This will start a global trade war where no one wins. With the latest collapse on Wall Street, JP Morgan is saying there is a 60% chance of a recession later this year.
Still not convinced? Do some basic economic historical research on Smoot Hawley. These were tariffs introduced in 1930 to provide protectionism for American companies following the stock market crash of 1929. The result, other countries retaliated and compounded the economic crises putting America deeper into The Great Depression. The only way it got out was World War II. Is that what it will take to get us out of this mess? I literally pray that is not the case.
So why is he doing this? Ego? Power? Chaos? He is not getting sound economic advice, and if he is, he is certainly ignoring it. For those in Trump’s inner circle cheering on these tariffs, they also fail to study history and are more interested in wielding power and keeping their status as opposed to doing what is right for the country. This brings us to another example where history is being ignored and that is the rise of autocrats and dictatorships. Is there no one in the administration that has the courage to speak truth to power? Apparently not, since those that have differing views are ostracized, publicly discredited and sent packing. What we need is someone to speak up regardless of the consequences. Speaking truth to power requires courage and if it is in the country’s best interests and you lose your government job because you were not a “yes man” is not a sign of disloyalty, it is a sign of integrity.
History is not just about dates, people and places. It is a critical analysis of cause and effect in society. It is a critical debate as to why things happened. Einstein’s definition of insanity is doing the same thing and hoping for a different result. Another way of putting it is this, If you do what you have always done, you will get what you have always gotten. Look at Smoot Hawley. Did it bring economic prosperity? What makes you think the Trump tariffs will?
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Cheers,
Al