As I am writing this from London, I will temporarily adopt the useful British expression “chattering class” to describe the people who are currently freaking out in the media about President Trump’s tariff policy causing the S&P 500 to sell off to where it was in February 2024.
Because the stock market has only gone up since 2009 (when it was 768), the chattering class has grown accustomed to it only going up and it perceives the loss of a year’s gains to be the end of the world.
This reaction is itself an expression of how detached from reality the chattering class has become since 2009, when the Treasury and Federal Reserve bailed out the very Wall Street bankers who caused the Financial Crisis of 2008.
Ever since then, all U.S. government and Federal Reserve policies have been for the benefit of the asset-owning class. The American working class simply hasn’t counted, while the middle class (who live mostly from their salaries) has been under constant pressure with the rising cost of housing, healthcare, and college education.
To see what I mean, take a look at the following graph expressing non-existent real wage growth for the last forty years.
It’s true that the working and middle classes have been able to save money by purchasing cheap consumer goods from China. In recent years I have frequently marveled at the low price of textiles and sneakers sold at Costco. As I write, I am wearing a Jim-Dandy pair of navy IZOD sneakers made in China that I purchased at Costco for $15. How it is possible for IZOD and Costco to make any money on this transaction—never mind the Chinese factory owner and the poor Chinese laborers—is beyond me.
Though I don’t pretend to understand “the dismal science” of economics, my common sense tells me that it is unsustainable for the majority of Americans to produce nothing and go ever deeper into debt while consoling themselves that the price of consumer goods manufactured in China remains cheap.
That said, I also doubt that this mess can be unwound quickly. While an economic system is not precisely the same as a natural system, it bears a strong resemblance. Nothing in nature can be radically altered in a short period of time without producing all manner of consequences, many unforeseen.
I suspect that Trump and his advisors have been wargaming their current game of chicken with the Chinese, the financial markets, and the inveterate weenies who infest the mainstream media. An optimistic interpretation is that his tariffs are the opening gambit for negotiations.
Sort of like Saint George, Trump is apparently determined to enter a jousting tournament with the great Chinese Dragon, and it will be interesting to see if he prevails. Who will flinch—the Trump administration or the Chinese Communist Party?
On a strictly personal note, I cannot help but admire the sheer nerve of President Trump. He reminds me of the Spanish bullfighter Juan “Pirata” Padilla, who frequently kneels before a charging bull—sometimes even with his back turned to the animal.
To understand how much nerve this requires, consider that the mere sight of an enraged Toro Bravo would dissuade most people from even stepping into the arena.
I know, I know, being President of the United States isn’t the same as being a Spanish bullfighter. However, going back to my original thesis that the U.S. economic model of the last forty years hasn’t been sustainable: Many reasonable people have been pointing this out for years, but no one in Washington has had the guts to do anything about it until now.
America’s asset-owning class has not had to endure any discomfort since 2009, but some discomfort is an inevitable part of living in the real world. Long before the summer of 1789, many reasonable observers in France understood that the privileges of the ancien régime were unsustainable. However, no one from the ancien régime had the guts to tell his social class that it would need to accept some loss of comfort in order to survive.
This originally appeared on Courageous Discourse.
