The monkey still has the gun!

When John Oliver isn’t ragging on New Zealand, which of course I am required to not have a sense of humour about. But , he and his writers have a keen senses in explaining complex topics clearly. He did one long section a couple of weeks ago that took apart the Trumpian view on the economic value of tariffs.

On the way through he took a sideswipe at a number of people commenting on Trumps’ abrupt back down on a range of broad-brush tariffs. Including Chuck Schumer, the democratic senate minority leader who did a tweet saying….

John Oliver successfully captured my sense of incredulity at the political stupidity of that, and other similar statements.

It is not over Chuck!
We dodged a bullet, but the monkey still has a gun!

Quite correct, and the monkey image gets the essence of Trump’s economic behaviour.

The point is that the Congress has abrogated its duty as a co-branch of government. They haven’t removed the damn ‘gun’ that Trump has been waving around. The ‘gun’ in this case is that Trump is that doing these tariffs by misusing a 1977 congressional act ” International Emergency Economic Powers Act of 1977 (IEEPA)”. I’ll see if I have time to unpick why in a later post.

But that was the basis of the a number of votes in congress trying to prise the use of tariff powers that congress has delegated to the executive powers of the president. Like the vote yesterday in the Senate (Washington Post – paywalled).

The Democratic resolution forced a vote under a statute that allows them to try to terminate the national economic emergency Trump used to levy the tariffs.

Massachusetts Sen. Elizabeth Warren called it a “fake” emergency that Trump is using to impose his “on again, off again, red light, green light tariffs.”

The tariffs “are pushing our economy off a cliff,” Warren said.

The vote didn’t go through, would certainly have failed in the House, and didn’t reach the 67 votes that would have been required to overcome a presidential veto. But I’d expect that as the US economy continues to tank over the coming quarters, which it will with the current levels of risk and uncertainty in supply chains – there will be more of these votes forced in the legislative branch. Especially before and after the mid-term elections.

The 49-49 vote came weeks after the Senate approved a resolution that would have have thwarted Trump’s ability to impose tariffs on Canada. That measure passed 51-48 with the votes of four Republicans — Sens. Susan Collins of Maine, Lisa Murkowski of Alaska and Mitch McConnell and Rand Paul of Kentucky. But McConnell — who has been sharply critical of the tariffs but had not said how he would vote — and Democratic Sen. Sheldon Whitehouse were absent Wednesday, denying Democrats the votes for passage.

Trumpian economics are those of a economically illiterate monkey who seems wedded to a economic pattern from early in the last century. As google AI helpfully summarises the trade position of the US in their slow and laggy statistics.

Curiously Trumpian early 20th century economics doesn’t appear to consider exported or imported services. If you read the BEA link, that USD1.02 trillion is only the nominal amount when you look at US ownership trade in services. Also consider that American companies often own wholly or in part offshore affiliates, who charge for services both of non-US and also US customers. Also consider that typically they will usually effectively shunt the profits and trade stats through intermediate countries (Eire being a common one for computer services).

For 2023, U.S. exports of services were $1,026.6 billion, and U.S. imports of services were $748.2 billion. For 2022—the latest year for which statistics are available—services supplied to foreign persons through foreign affiliates of U.S. multinational enterprises (MNEs) were $2,114.1 billion, and services supplied to U.S. persons through U.S. affiliates of foreign MNEs were $1,517.8 billion. Affiliates supplied most of the services provided to foreign persons by the United States and to U.S. persons by foreign markets in 2022.

Take NZ as an example.

In 2023, New Zealand’s exports of goods and services to the US apparently totalled $6.26 billion. But I can’t locate the actual source that the Google AI used for that….. But it sounds about right because the exports of goods were depressed at the tail end of the Covid pandemic, but services would not have been so much.

But in the mean time, rather than me describing why reciprocal “U.S. goods trade deficits” is a stupid way to look at modern economies. Have a look at what a ex-Brit, and now US citizen has to say about the monkey with a oversized pistol tariff economics.

BTW: go and ask why we can’t see season 12 of The Last Week Tonight with John Oliver on any streaming service in NZ apart from pirating it off Youtube? Seriously, did someone actually get offended about the Bird of the Century?

I’d bet there is a over-zealous local fuckwit blocking the latest season.