On tariffs, drugs, and our future

Donald Trump understands the problem, but the cure he's proposing won't fix it. In fact it's worse than the disease. (Please don't shoot the messenger.)

I don’t want to write this. But I have to.

Before I do: an urgent message. If you’ve followed me since 2020, you know I call it like I see it. I may be right, I may be wrong. But honesty, not ideology, is my brand - chasing the truth even if it costs me friends, or followers.

Many of you support Donald Trump. I hope you won’t cancel your subscriptions because I’m telling you what you don’t want to hear. I fear some of you may, but when I started Unreported Truths I told myself I would stand up to audience capture. I’m going to stick with that, and I hope you’ll stick with me.

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(Stand for independence. Stand with me.)

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Now. Here goes.

The tariffs Donald Trump has proposed are a massive mistake — and not because global stock markets are plunging. The markets are down because the tariffs are so foolish, not the reverse.

There are so many reasons why they’re almost hard to articulate quickly and simply, but start here:

It simply isn’t true that the United States economy is suffering overall. We have grown FASTER than Europe and Japan for decades. The world’s largest and most important companies are all American. That wasn’t true a generation ago. We’ve actually kept our relative share of global output even as China has risen, while other developed countries have suffered. And across a huge stretch of the south, from Virginia through Texas, the United States is booming.

We have two real problems. The first is income inequality. In some parts of the United States, particularly the industrial Midwest, we don’t have enough good jobs. And in some blue states high local taxes and, even more, a lack of affordable housing means that even people with good jobs feel squeezed.¹

The second is cultural. We have a huge number of deaths of despair in this country: drug overdoses, alcoholism, suicides, homicides. Car crashes too. The United States has always had more preventable deaths than other rich countries, but now the gap has worsened dramatically even though our wealth has grown compared to theirs.

The populist right believes those two problems are closely connected, that bringing back high-wage manufacturing jobs will end the overdose epidemic and heal the United States more broadly.

I’m not so sure. I think the main problem with our drug problem is, well, drugs. Canada has much less income inequality than we do, but it has the same stupid attitudes towards “harm reduction” — medicalizing rather than doing everything possible to discourage use — and almost as severe an overdose crisis. The industrial Midwest has been hollowing out since the late 1970s, but the overdose problem only exploded in the 2000s, with the rise of Oxycontin. And our overdose problem is severe even across the South, despite those strong economies.

Our country is sick, but not only — or even mostly — because our economy is sick.

We have been encouraging addictive behaviors for a generation: spreading gambling everywhere, allowing almost unlimited alcohol advertising, pushing amphetamines on children, legalizing cannabis, and prescribing opioids far too aggressively. Yet, somehow, we pretend to be surprised by the consequences.

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Instead, Donald Trump has decided to upend the global trading system by imposing tariffs of 10 percent to almost 50 percent or more on goods we import from other countries.

The goal is to force companies to bring millions of manufacturing jobs back to the United States.

This will never work.

The reason is the same reason that we are never going to make farming a major job creator again. Manufacturing is just too efficient now. Between 1945 and 2010, manufacturing jobs fell from about 32 percent of all American employment to about 8 percent. We cannot turn this around with new factories. Where are they going to come from? It’s not just the industrial Midwest that is hurting. Northern England, eastern Germany, rural Japan — they’re all hollowing out economically.

And even if those jobs and factories did exist — and they do not — companies are not going to make billion-dollar decisions to build factories based on tariffs that aren’t even legislated and can be removed on a whim. If Donald Trump is serious about an economic change this important and risky, he needs Congressional support. He needs to show the world, and the businesses making these investment decisions, that these tariffs will outlast his Presidency.

On the other hand, we do have lots of jobs that are high-paying and do NOT require a college degree — particularly in construction and building trades and energy. Guess what? Those jobs can disappear very fast. Oil prices are plunging right now, because investors are afraid of recession. And when oil prices go down, roughnecks get laid off. This plan is likely to cause a huge amount of short-term pain — with very little if any change of long-term success — for the very people it is supposed to help.

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And a lot of other people too.

I suspect a lot of Unreported Truths readers shop at Walmart. My kids and I shop at Walmart all the time, we have a very large Walmart about 10 miles from my house.

These days Walmart has a very simple slogan: Save money. Live better. Guess what, spending $30 on a kid’s T-shirt — or even $20, or $10 — is not necessary. She’s going to outgrow it in a few months anyway. For me, for most of you, saving the money is nice. For a lot of people, it’s far more than that. It’s the difference between being able to make the rent at the end of the month or now.

A tiny fraction of Americans stand to benefit directly from this trade war, if the tariffs remain in place (which they won’t), if companies decide to build factories here (which they won’t), if they get hired.

But we are all consumers. We will all pay higher prices. And, again, those higher prices will do far more damage to the poor and the middle-class than the rich. To use the tariffs — tax increases on the poor — to support tax cuts for the wealthy, which is effectively what the Republican plan seems to be at this point, is both economically foolish and, yes, immoral. And I fear it will make our crisis of deaths of despair even worse.

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(The truth, even when it hurts.)

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Donald Trump has done a lot of things I like so far.

To take just one issue where the globalist left has screamed about how mean old Don is, how he just caaan’t - I think he is right to tell Europe that the freeloading era is over, that the United States is not going to pay for Europe’s defense forever so Europeans can have five-week vacations.

There’s a version of these tariffs — a much, much narrower version targeting China, and targeting a handful of advanced industries — that might make sense. As Covid showed, our pharmaceutical companies are too dependent on basic chemicals that are largely sourced in China and India. We need to be sure we have foundries for AI chips and the solar panels and electric grids that will power them.

But we have had low tariffs for a century for good reason. The last time the world went this way, it wound up a depression — and a world war.

Setting fire to the economy in order to save it is insane and indefensible.

Like I said up top, please don’t shoot the messenger.

1. The lack of affordable housing should be the easiest problem to fix — it requires changes to make construction easier and cheaper and encourage multi-family housing in the suburbs. But it requires Democratic politicians to stand up to Democratic voters. Good luck with that.