FacebookTwitterGoogle+RedditEmail

Battle for the Ages: Protectionist Trumponomics vs. Neoliberalism

by

Donald Trump’s red wave on Election Day was an unprecedented body blow against neoliberalism. The stupid early-1990s prediction about the ‘end of history’ turned into a – possible – shock of the new.
The new global nativism? Perhaps a new push towards democratic socialism? Too early to tell.

Once again. A body blow, not a death blow. Like the cast of The Walking Dead, the zombie neoliberal elite simply won’t quit. For the Powers That Be/Deep State/Wall Street axis, there’s only one game in town, and that is to win, at all costs. Failing that, to knock over the whole chessboard, as in hot war.

Hot war has been postponed, at least for a few years. Meanwhile, it’s enlightening to observe the collective American and Eurocrat despair about a world they can’t understand anymore; Brexit, Trumpquake, the rise of the far-right across the West. For the insulated financial/tech/think-tank elites of liquid modernity, criticism of neoliberalism – with is inbuilt deregulation, privatization a-go-go, austerity obsession – is anathema.

he angry, white, blue collar Western uprising is the ultimate backlash against neoliberalism – an instinctive reaction against the rigged economic casino capitalism game and its subservient political arms. That’s at the core of Trump winning non-college white voters in Wisconsin by 28 points. Blaming “whitelash”, racism, WikiLeaks or Russia is no more than childish diversionary tactics.

The key question is whether the backlash may engender a new Western drive towards democratic socialism – read David Harvey’s books for the road map – or just nostalgic nationalism raging against the neoliberal Washington/EU/NAFTA/ globalization machine.

Read my lips: much lower taxes

Trump is proposing to turn the tables on the neoliberal game. Throughout his campaign he criminalized free trade – the essence of globalization – for decimating the American working class, even as US businesses blamed free trade for forcing them to squeeze workers’ wages.

So let’s see how Trump will be able to impose his priorities. In parallel to addressing the appalling structural decline in US manufacturing, he wants to pull a China: a massive $1 trillion infrastructure project over 10 years via public-private partnerships and private investments encouraged by lower taxes. That’s supposed to create a wealth of jobs.

Lower corporate taxes in this case translate into a whopping $3 trillion over 10 years, something like 1.6 percent of GDP. That would be the way to incite huge multinationals to repatriate the hundreds of billions of dollars in profits stashed abroad. This fiscal shock would create 25 million jobs in the US over the next 10 years, and propel a 4 percent growth rate.

And then there’s the protectionist drive that will renegotiate NAFTA and kill TPP for good. Not to mention raising import tariffs over manufactured products (many by de-localized US multinationals) imported from China and Mexico.

It’s open to fierce debate how Trumponomics will manage to square the circle; with more economic growth fueled by less taxes, imports will rise to satisfy internal demand. But if these products are subjected to stiffer tariffs, they will become more expensive, and inflation will inevitably rise.

Anyway, the bottom line of protectionist Trumponomics would be a huge blow against global trade. Deglobalization, anyone?

Asia braces for impact

Predictably, the heart of deglobalization will be the Trump-China relationship. Throughout the campaign, Trump blamed China for currency manipulation and proposed a 45 percent tariff on Chinese imports.

In Hong Kong banking circles, no one believes in it. Key argument: the already strapped basket of “deplorables” simply won’t have the means to pay more for these Chinese imports.

Another thing entirely would be for Trumponomics to find mechanisms to hurt US companies that de-localize in Asia. That would translate into serious problems for outsourcing Meccas such as India and the Philippines. Outsourcing in the Philippines, for instance, serves mostly US companies and attracts revenue as crucial to the nation as total Filipino worker remittances from abroad, something like 9 percent of GDP.

It’s quite enlightening in this context to consider what Narayana Murthy – founder of Indian IT major Infosys – told the CNBC TV-18 network; “What is in the best interest of America is for its corporations to succeed, for its corporations to create more jobs… to export more… so I’m very positive.”

Four months ago Nomura Holdings Inc. issued a report titled “Trumping Asia”. No less than 77 percent of respondents expected Trump to brand China a currency manipulator; and 75 percent predicted he will impose tariffs on exports from China, South Korea and Japan.

So no wonder all across Asia the next months will be nerve-wracking. Asia – and not only China – is the factory of the world. Any Trump trade restriction over China will reverberate all across Asia.

Brace for impact: deglobalized Trumponomics vs. Neoliberalism will be a battle for the ages.

This piece first appeared in RT.

More articles by:

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge and Obama does Globalistan (Nimble Books, 2009).  His latest book is Empire of ChaosHe may be reached at pepeasia@yahoo.com.

February 21, 2018
Ajamu Baraka
Venezuela: Revenge of the Mad-Dog Empire
Edward Hunt
Treating North Korea Rough
Binoy Kampmark
Meddling for Empire: the CIA Comes Clean
Ron Jacobs
Stamping Out Hunger
Ammar Kourany – Martha Myers
So, You Think You Are My Partner? International NGOs and National NGOs, Costs of Asymmetrical Relationships
Michael Welton
1980s: From Star Wars to the End of the Cold War
Judith Deutsch
Finkelstein’s on Gaza: Who or What Has a Right to Exist? 
Kevin Zeese - Margaret Flowers
War Preparations on Venezuela as Election Nears
Wilfred Burchett
Vietnam Will Win: Military Realities
Steve Early
Refinery Safety Campaign Frays Blue-Green Alliance
Ali Mohsin
Muslims Face Increasing Discrimination, State Surveillance Under Trump
Julian Vigo
UK Mass Digital Surveillance Regime Ruled Illegal
Peter Crowley
Revisiting ‘Make America Great Again’
Andrew Stewart
Black Panther: Afrofuturism Gets a Superb Film, Marvel Grows Up and I Don’t Know How to Review It
CounterPunch News Service
A Call to Celebrate 2018 as the Year of William Edward Burghardt Du Bois by the Saturday Free School
February 20, 2018
Nick Pemberton
The Gun Violence the Media Shows Us and the State Violence They Don’t
John Eskow
Sympathy for the Drivel: On the Vocabulary of President Nitwit
John Steppling
Trump, Putin, and Nikolas Cruz Walk Into a Bar…
John W. Whitehead
America’s Cult of Violence Turns Deadly
Ishmael Reed
Charles F. Harris: He Popularized Black History
Will Podmore
Paying the Price: the TUC and Brexit
George Burchett
Plumpes Denken: Crude thinking
Binoy Kampmark
The Caring Profession: Peacekeeping, Blue Helmets and Sexual Abuse
Lawrence Wittner
The Trump Administration’s War on Workers
David Swanson
The Question of Sanctions: South Africa and Palestine
Walter Clemens
Murderers in High Places
Dean Baker
How Does the Washington Post Know that Trump’s Plan Really “Aims” to Pump $1.5 Trillion Into Infrastructure Projects?
February 19, 2018
Rob Urie
Mueller, Russia and Oil Politics
Richard Moser
Mueller the Politician
Robert Hunziker
There Is No Time Left
Nino Pagliccia
Venezuela Decides to Hold Presidential Elections, the Opposition Chooses to Boycott Democracy
Daniel Warner
Parkland Florida: Revisiting Michael Fields
Sheldon Richman
‘Peace Through Strength’ is a Racket
Wilfred Burchett
Vietnam Will Win: Taking on the Pentagon
Patrick Cockburn
People Care More About the OXFAM Scandal Than the Cholera Epidemic
Ted Rall
On Gun Violence and Control, a Political Gordian Knot
Binoy Kampmark
Making Mugs of Voters: Mueller’s Russia Indictments
Dave Lindorff
Mass Killers Abetted by Nutjobs
Myles Hoenig
A Response to David Axelrod
Colin Todhunter
The Royal Society and the GMO-Agrochemical Sector
Cesar Chelala
A Student’s Message to Politicians about the Florida Massacre
Weekend Edition
February 16, 2018
Friday - Sunday
Jeffrey St. Clair
American Carnage
Paul Street
Michael Wolff, Class Rule, and the Madness of King Don
Andrew Levine
Had Hillary Won: What Now?
David Rosen
Donald Trump’s Pathetic Sex Life
FacebookTwitterGoogle+RedditEmail