Suppose Trump had crashed the stock market by sharply raising the corporate tax rate. In a certain sense, "wealth" would have been destroyed, but our actual prosperity would not be impaired. 1/

It would have been a purely distributional change, stockholders would have gotten poorer but the "pie" we share would have been unchanged. 2/

Highly disruptive tariff moves are not like that. The stock market is declining because long-term economic plans, on the production side as well as the sales side, have been upended. Firms that would have been productive will disappear. 3/

We will in aggregate be poorer. The change is not merely distributional. 4/

In the long-term, of course, if the policy environment stabilizes, um, somewhere, new production arrangements will be planned, and it's possible we find a new equilibrium more prosperous than the one we left, short-term pain for long-term gain. We have no evidence this is likely, but sure. 5/

But even if so, there was no need to so sharply destroy in-pipeline production. We could have telegraphed and gradually imposed over five years a more autarkic trade policy, if that's what we want. 6/

We'd have achieved the same putative long-term gain without throwing much of the existing pipeline and several years of aggregate prosperity, in the US and around the world, into the wood chipper. /fin

it would, it kind of is right now, not via a tax but via under- rather than out- performance of US assets. part of the US trade deficit is just a perception that US stocks crush it and they’re what all the world’s investment managers want to hold. 1/

but for the particular purpose of encouraging balanced trade, taxing securities in foreign hands in a manner largely reversible by trading back for goods and services is especially potent. 2/

whether wealth taxes are inherently progressive depends on often contentious definitions. is a flat income tax progressive because 10% of $1M is more than 10% of $50K? conventionally, no, but some people argue about it. 3/

i think we don’t want a wealth tax at low levels of wealth, because we want to encourage a degree of self insurance through savings. but as wealth levels rise, self-insurance transitions toward domination and we do want to tax. /fin

a solidaristic tactic might be to just let the stupidest or most hurtful things said by the most ridiculous members of groups you mean to be in coalition with just wash off your backs rather than making a big deal of it. 1/

don’t imagine your opponents don’t encourage and finance the worst and most belligerent elements of every group that might join in coalition against them hoping you will take the bait. don’t. /fin

look, now that we’ve shaken off the woke and we’re all smoking again, we can just replace all those “lattes” and “cappuccinos” with American-burnt ash dissolved in American-boiled water.

the new Americano.