Stocks PLUMMET After Trump’s Tariffs Announced! w/ James K. Galbraith

Summary

Podcast Summary: The Jimmy Dore Show Episode: Stocks PLUMMET After Trump’s Tariffs Announced! w/ James K. Galbraith
Release Date: April 7, 2025
Host: Jimmy Dore
Guest: James K. Galbraith, Author and Professor of Economics at the University of Texas at Austin

---

Introduction and Context

The episode begins with humorous banter between host Aaron Maté and a prank caller impersonating J.D. Vance, humorously discussing President Trump’s declaration of “Liberation Day” and the imposition of sweeping tariffs on other nations. This light-hearted segment sets the stage for the episode’s primary focus: the severe economic implications of Trump's tariff policies announced on Liberation Day.

Impact of Trump’s Tariffs on the Economy and Stock Market

[05:35] Aaron Maté introduces the main discussion, highlighting the immediate market turmoil following Trump’s tariff announcement. The stock market experienced a significant plunge as global investors reacted negatively to the new trade barriers.

[06:26] James K. Galbraith analyzes the situation:

“We’re seeing one of the largest shocks to the stable functioning of the economy since the early 1980s when Paul Volcker raised interest rates to 20%.”
– [06:45]

Galbraith draws parallels between Trump’s tariffs and historical economic shocks, emphasizing the disruptive nature of such policies on modern financial systems.

Critique of Tariff Policies and Historical Context

[07:47] The conversation shifts to responses from Trump’s aides, notably Stephen Miller, who defends the tariffs by claiming the U.S. economy was already in a depression. Aaron Maté challenges this assertion, questioning the legitimacy of labeling the economy as such.

[09:19] Galbraith responds:

“The economy was good, huh? Well, tell that to the auto worker who got laid off in 1994...”
– [02:09]

He argues that while certain sectors face hardships, the broader economy does not qualify as being in a depression. Galbraith underscores the long-term deindustrialization of the U.S. economy and casts doubt on the feasibility of reversing this trend solely through tariffs.

Flawed Tariff Calculation Methods

[17:47] Maté brings up a Washington Post report revealing that Trump personally selected tariff formulas based on trade deficits and U.S. exports, bypassing more sophisticated methods:

“President Trump personally selected the now widely mocked formula for determining country specific tariffs from a menu of options.”
– [19:47]

Galbraith critiques this approach:

“It is not connected to the tariff rates that other countries are charging us... It's a confected number which is supposed to represent trade barriers generally, but it doesn't.”
– [22:38]

He explains that using trade deficits and export values as a basis for tariffs is fundamentally flawed and disconnected from actual trade practices and economic realities.

Consequences for Consumers and Supply Chains

[25:09] The discussion moves to the impact on consumer goods:

“Yes, I think we're going to see very substantial increases in all kinds of consumer goods.”
– [25:23]

Galbraith predicts significant price hikes for imported goods, particularly those from Asia, due to the newly imposed tariffs. This will effectively act as a sales tax on American consumers, decreasing living standards and exacerbating supply chain disruptions.

Support from Auto Workers and Broader Economic Implications

[27:45] Despite the economic downturn, certain sectors like auto workers express support for the tariffs, hoping for job restoration:

“We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities.”
– [28:31]

Galbraith remains skeptical:

“I don’t know that we will see some [job restoration]. I think also... European producers are going to accelerate the movement of European factories to the United States.”
– [29:03]

He questions whether the tariffs will genuinely lead to sustainable job growth or merely benefit a select few companies while burdening consumers.

Democratic Party’s Stance vs. Trump’s Policies

[30:08] The conversation transitions to the Democratic Party’s historical inaction on trade issues:

“We are a long way from that [effective trade policy].”
– [33:13]

Galbraith argues that while Democrats have long criticized free trade agreements like NAFTA, they have failed to implement effective alternatives. He suggests that Trump’s unilateral tariff approach lacks a comprehensive strategy needed to revitalize the American industrial base.

Advising Trump: The Need for a Comprehensive Industrial Strategy

[36:27] When asked what additional measures Trump should take, Galbraith emphasizes the necessity of a robust federal industrial strategy:

“An effectively functioning federal government with the expertise to give you advice over a wide range of industrial and other areas...”
– [36:39]

He draws historical parallels to the New Deal era, advocating for significant government intervention and investment to support industrial revival, something lacking in Trump’s current approach.

Discussion on Military Actions and Foreign Policy

The latter part of the episode delves into Republican Senator Tom Cotton’s nonchalant stance on potential military action against Iran. Former Congress member Dennis Kucinich critiques Cotton’s approach, highlighting the dangers of unilateral military interventions and the potential for catastrophic consequences, including nuclear proliferation and regional instability.

Democratic Party’s Declining Approval Ratings

[51:34] A report is presented showing historically low approval ratings for Democrats:

“Among all voters disapproving 68%... just 21% approve.”
– [52:13]

Dennis Kucinich attributes this decline to the Democratic Party’s departure from its New Deal principles, increased corporate influence, and failure to address working-class concerns effectively.

Conclusion and Final Thoughts

The episode concludes with reflections on the necessity for the Democratic Party to return to its foundational principles of economic reform and protection of workers’ interests. Kucinich emphasizes the need for dramatic political change to regain public trust and support.

Notable Quotes:

• James Galbraith on tariff shock:

  “We’re seeing one of the largest shocks to the stable functioning of the economy since the early 1980s...”
  – [06:45]

• James Galbraith on flawed tariff calculations:

  “It is not connected to the tariff rates that other countries are charging us... It's a confected number...”
  – [22:38]

• Dennis Kucinich on Democratic Party reform:

  “The American political system requires parties to offer something different... The Democrats need to go back to that old time religion of economic reform.”
  – [57:41]

Key Takeaways

• Economic Shock: Trump’s tariff policies represent a significant and destabilizing economic shock, reminiscent of major historical economic interventions.

• Flawed Implementation: The method of calculating tariffs based on trade deficits and U.S. exports is fundamentally flawed and disconnected from actual trade practices.

• Consumer Impact: U.S. consumers are likely to face higher prices for imported goods, exacerbating economic strain without guaranteed job restoration.

• Political Dynamics: The Democratic Party’s declining approval ratings are linked to its departure from foundational economic reforms and increased corporate influence.

• Need for Comprehensive Strategy: Successful economic revitalization requires a comprehensive federal strategy, akin to the New Deal, rather than unilateral tariff impositions.

This episode offers a critical analysis of Trump’s tariff policies, highlighting their short-term market impacts and long-term economic repercussions, while also examining the broader political landscape and the Democratic Party’s struggle to regain public trust.

Transcript

[Jimmy Dore]

Come see us on tour in Los Angeles, Bakersfield, San Jose, Buffalo, Toledo, Montreal and Toronto. Go to jimmy dore.com for the cheapest tickets.

[Aaron Maté]

Hey, this is the Jimmy Dore Show. Aaron Mate speaking. Who's calling please?

[J.D. Vance]

Hey, what's up, man? This is J.D. vance.

[Aaron Maté]

Oh, hello Mr. Vice President. How are you doing?

[J.D. Vance]

I'm doing pretty good, I guess. Hey, Happy Liberation Day.

[Aaron Maté]

What now?

[J.D. Vance]

That's what Mr. Trump is calling today when he's announcing his newest slate of big ass tariffs on other countries that are dumb so that they'll stop taking advantage of America and we get down to the business of fixing this economy.

[Aaron Maté]

Well, so far as tariffs have served only to tank the stock market and raise prices on consumer goods, the economy that inherited wasn't exactly in shambles, especially for the wealthy interests that he serves.

[J.D. Vance]

Oh really? The economy was good, huh? Well, tell that to the auto worker who got laid off in 1994. He doesn't think the economy so great now, does he? For real, does he? I don't know this guy.

[Aaron Maté]

What does that have to do with anything?

[J.D. Vance]

Aaron, the point of these terrorists is to bring these jobs back to the United States to reinvigorate the domestic manufacturing sector of the economy.

[Aaron Maté]

So this wrecking ball approach is based solely on the hope that factories will eventually relocate to the U.S. yeah.

[J.D. Vance]

Pretty cool, huh?

[Aaron Maté]

Even if it is currently tanking the economy?

[J.D. Vance]

Well, sure. Like Mr. Trump said, sure, there may be short term pain, not gonna lie, but the American people are resilient and will get through it. And once the entire economy is transformed once again into a manufacturing economy, then everything will be fine and the short term pain will be over.

[Aaron Maté]

Short term? Do you realize how long transforming our entire economy would take? How long would it take to get a single auto manufacturing plant up and running?

[J.D. Vance]

I don't know. I've never had to deal with anything real before. A few months?

[Aaron Maté]

Try a few decades.

[J.D. Vance]

Okay, fine. So eggs are pricey for a few measly decades and you have to delay retirement for 25 years or the American people are resilient.

[Aaron Maté]

Whatever hypothetical economic rebound these tariffs might cause would come long after Trump's time in office. Given how self serving he is, it's hard to see his motivation here.

[J.D. Vance]

Well, that's a good point, Aaron, but I'm way ahead of you. You may have noticed that Mr. Trump is already talking about a third term.

[Aaron Maté]

Yes, and that is highly disturbing to many people. He's talking flagrantly now about violating the Constitution. There was literally an Amendment prohibiting a third term.

[J.D. Vance]

Okay, and like Mr. Trump told reporters, there are methods for making that happen. And he's right. Remember, I'm the lawyer here.

[Aaron Maté]

What possible methods are there other than amending the Constitution?

[J.D. Vance]

Well, if you're a student of history, you know the methods. I'm a lawyer.

[Aaron Maté]

What method?

[J.D. Vance]

You know, a coup d'etat, palace revolution, basically, Mr. Trump becoming a dictator.

[Aaron Maté]

That's what I was afraid of. I thought you meant legal methods. Why did you keep reminding me that you're a lawyer?

[J.D. Vance]

No, I just meant that since I'm a lawyer, I know what stuff is, like, super against the law. But I'm pretty. I'm pretty sure that if the president does it, that means it's not illegal. There's a precedent for that, too.

[Aaron Maté]

So you're not a very good lawyer.

[J.D. Vance]

No, I'm not at all. As you may have noticed, I'm not a practicing attorney and have not been for some time.

[Aaron Maté]

How do you people think you can get away with this?

[J.D. Vance]

Well, Aaron, it's pretty simple. The base of our support, they don't actually care about democracy or the Constitution or any of that stuff. They would be more than happy to have a dictator as long as he owns the libs, makes woke people mad, threatens other countries that read it as slightly gay, and supports Israel.

[Aaron Maté]

And the prospect of this doesn't bother you? As an American?

[J.D. Vance]

Aaron, if I had any guiding principles or anything even remotely like a moral compass, I wouldn't be where I am today. And as a history buff, I got to say, it would be pretty cool to be the world's first vice dictator.

[Aaron Maté]

That would be a first.

[J.D. Vance]

Yeah. I mean, imagine seeing Kim Jong Un on TV being dear leader, but then there's always some other second little dude off to the side, and it's like, oh, yeah, there's somewhat less dear Leader. He's like the assistant dictator. Yeah, I want to be that dude, but in America.

[Aaron Maté]

Well, that's an admirable goal, sir.

[J.D. Vance]

Thank you. I appreciate that.

[Aaron Maté]

Well, thank you for calling in and revealing the Trump administration's plans for high treason.

[J.D. Vance]

No problem. My wife Usha says nothing I do will be wrong because I'm her big, strong daddy bear. And she says it in a way that's really comforting, so I believe her. Besides, I won't get in trouble because I'm white. Anyway, I have to go. I have to make other mistakes that will ultimately culminate in my faded, horrific end. Allah. A Greek tragedy. Later, dude.

[Aaron Maté]

In the aftermath of Liberation Day, Trump declaring tariffs on basically the entire world. Here are some of the headlines, stocks in free fall as China hits back with 34% tariffs. Stocks plunge as China responds to Trump's tariffs. Wall street slides as trade war escalates. So a lot of gloom in the financial markets. People's 401ks taking a hit, the stock market plunging. But the Trump administration insists that things are still going okay. How do we make sense of all this? What is really going on? Well, let's bring in our guest. James Galbraith is an author and professor of economics at the University of Texas at Austin. His latest book is Entropy the Living Basis of Value and Production. James Galbraith, thanks for joining us on the Jimmy Dore Show.

[James Galbraith]

Thanks very much for having me on.

[Aaron Maté]

Help us make sense of all this. Trump announced that this was Liberation Day, that this is now a time to make America wealthy again. But so far it's not looking so good and there's a lot of panic in the stock market. How do you make sense of what is happening right now with Trump's tariffs?

[James Galbraith]

Well, I think we're seeing one of the largest shocks to the stable functioning of the economy since the early 1980s when Paul Volcker raised interest rates to 20%. And that all also, unless you want to count the pandemic, but basically the largest policy shock since the early 1980s. And it is obviously going to disrupt the existing pattern to come back to the effect of tariffs as such, if you go all the way back to the early 1930s when tariffs were put up very sharply by the Congress, a major effect was on the financial markets as it made it very hard for certain businesses to cover their debts. And as a result of that, there was considerable shock to the banking system, which ultimately precipitated the Great Depression. So one has to expect a lot of repercussions from this. And that's what we're seeing.

[Aaron Maté]

I want to get your response to Stephen Miller, a top aide to Trump. He was on Fox News defending Trump's tariffs, saying that, look, we already are in a depression and so a drastic measure like this needs to be taken. This is what he said. Guys are all about growth.

[Dennis Kucinich]

I know you're about lowering taxes, rolling back regulations and seeing that growth. Are you concerned that this is going to put us into a recession? The exact opposite. We inherited from Joe Biden an economy in total free fall. There has been zero jobs growth for American workers in four years. In other words, all jobs growth had gone to foreign workers. That is a depression, not a recession. That is a depression depression for the American worker. We had debt and Deficits that were rising unsustainably, that would lead us into a certain debt and deficit crisis. We had inflation that was in high double digits, crushing the American family, making it impossible to afford the essentials of life. We had an economy that was in a state of calamity and catastrophe.

[Aaron Maté]

So what's your response to this? Because although many people might take issue with him saying we were in a depression, certainly things were not great, prices were high, there was a huge demand for jobs and relatively unstable. And certainly there's a lot of people who can't find steady jobs, don't have employment stability. So what do you make of his claim here that we already were in a depression and therefore the tariffs had to be imposed?

[James Galbraith]

Well, there was a lot of dissatisfaction with the condition of the economy in the last years or so, last year or two of the Biden term, but certainly wasn't a high unemployment rate that was down in the 3, 3.5% rate. It's still very close to that. The inflation rate cost of living had gone up dramatically, but the inflation rate itself had topped off and stabilized. So I don't think one can say that we inherited that. Trump inherited an economy in depression. His concern and the concern of the people around him is that over a very long period of time, the American economy has de industrialized and it's become highly dependent upon foreign sources for all kinds of consumption goods. And that is certainly true. The question is whether one can unscramble that omelet and what the consequences of attempting to do it, which they're clearly setting out to do, will be. And this is obviously not something that's going to be resolved over the course of a week. But surely it should be expected that the initial shock will be quite severe and it will include a shock to capital asset values, because that's the companies that have been propping up the stock market are highly internationalized. They're heavy exporters from the information sector and particular high technology. And when you sever their supply chains and sever their markets, their fate is very much in question.

[Aaron Maté]

I mean, I'm not sure if you can make a prediction, but how long do you think a shock like this will endure? I mean, people are looking at their 401ks, the retirement savings accounts. They've seen a big dip. I mean, do you anticipate that this slide will continue?

[James Galbraith]

Oh, sorry, the question about 401 s. Yeah.

[Aaron Maté]

And people just worried that people seeing the value of their 401ks decline pretty much overnight. I mean, do you Anticipate that this will continue over a prolonged period, or is this just an initial reaction to such a shock announcement from Trump?

[James Galbraith]

Well, the stock market had gone up maybe 50% over the 20, 23, 24 period, so it is already at historic highs. It went up additionally after Trump was elected, for whatever reason, anticipation of tax cuts and further stimulus programs. And of course, what we're getting instead is one of the largest tax increases on the American consumer. And we'll have to see what happens in terms of the further, further policy measures. Obviously, the Republicans are going to come in with another very big tax cut to offset that and shift the burden of taxation onto the tariffs and away from maybe the income tax. So we will see how that all pans out in terms of the economy as a whole. But so, but again, what we're seeing here is the initial shock. The stock market is down a little over 10% from its peak. And I wouldn't say that we're in Great Depression territory yet. From 1929 to 1930, the stock market lost, you know, 90% of its value. That's, we're a long way from that. Although the future, you know, is difficult to predict within an administration that is, as, you know, dramatic in the moves that it's prepared to make as this one.

[Aaron Maté]

What's your sense of what Trump's motive is here? Now, his critics will say that this is just an effort to get some, basically some short term revenue from tariffs, which he will then use to justify his aim for more massive tax cuts for the wealthy. That's the critique I'm hearing from the progressive side, from Democratic side, where I'm.

[James Galbraith]

Inclined to take him more or less at his word, that he sees the economy as something that's just fundamental, took a wrong turn a long time ago. Now there were a lot of us who don't entirely disagree with that, that this was the, the, the, the path to globalization was a path that hollowed out the industrial states of the United States. I worked in the early 1980s for the Joint Economic Committee, and the chair was a congressman from Milwaukee named Henry Royce. And we watched this happen. As Paul Volcker raised those interest rates, the dollar went up by 40 to 60%. And the advanced capital goods producing firms, the machine tool makers in Milwaukee and Cleveland and Toledo all went bust and they never came back. And that then set out, you know, the first of all, the rise of imports from Germany and Japan and then ultimately from China that developed a very deeply interconnected global economy that we have now. And Trump has been around and he's seen this as well and he's apparently attempting to reverse it. My issue with what he's doing is that I don't believe it's quite possible for, to recover the position that has been eroded over 40 or 50 years. As regrettable as that is. It seems to me that you just put up a price barrier on imports. The first thing you're going to do is disrupt the existing economy and we're seeing the effect of that. We're going to greatly depress the living standards of working Americans and you're going to make it very possible for some companies, the ones that are mostly internal or prepared to move back to the country very quickly to operate under very high prices. And will they tempted to expand their capacity, increase their output and improve their competitiveness? That's really doubtful. They will be in a very good market position to exploit the closed market that they'll be enjoying. And I expect that's given the way American capitalism works, that's what I expect them to do. I think there will be some companies that will come back, some companies that will invest from Europe. But this is not the general phenomenon that you see when you give a lot of essentially monopoly power to a small number of business leaders. They, they tend to exploit it. That's what they're about.

[Aaron Maté]

Talk to us more about why you do not think it's possible for Trump to achieve his goal of reversing this 40 year deindustrialization.

[James Galbraith]

You need to lean into your mic. Oh, sorry, I can't.

[Aaron Maté]

Just talk to us more about why you do not think it's possible that Trump can achieve his goal of reversing this 40 year slide into deindustrialization and, and bringing jobs back, bringing manufacturing back.

[James Galbraith]

Well, there are two things going on in the Trump program so far as one can figure it out at this point. The tariffs are obviously a very big shock to the economy. And the other thing is the disruption of the federal government and the elimination of regulatory agencies and consumer protections and the, the attack on the National Labor Relations Board and on labor power generally speaking. So what one says here is on the one hand this protectionist move and on the other hand a kind of free market libertarian approach which is not going to work to the benefit of the working Americans who voted for Mr. Trump. And I think they're going to find that the disillusionment here is going to be quite substantial and pretty fast.

[Jimmy Dore]

Hey, you know, here's another great way you can help support the show is you become a premium member. We give you a couple of hours of premium bonus content every week and it's a great way to help support the show. You can do it by going to jimmy door comedy.com clicking on join premium. It's the most affordable premium program in the business and it's a great way to help put your thumb back in the eye of the bastards. Thanks to everybody who was already a premium member. And if you haven't, you're missing out. We give you lots of bonus content. Thanks for your support.

[Aaron Maté]

I'm Aaron Matei sitting here for Jimmy Dore. We're talking to James Galbraith, economist and professor at the University of Texas, Austin, about Liberation Day and Trump's tariffs and the market turmoil that has resulted. James Galbraith is the author of many books, including his latest, Entropy Economics, the Living Basis of Value and Production. And Professor Galbraith, I wanted to get your response to some new reporting from the Washington Post on how these tariffs were calculated by the Trump team. This comes from the Washington Post. Jeff Stein President Trump personally selected the now widely mocked formula for determining country specific tariffs from a menu of options. Multiple sources say numerous Trump aides had for weeks been at work crafting country specific tariffs that took into account a broad range of tariff and non tariff barriers. Several sources said more sophisticated approaches had been developed. I can't confirm precisely who authored the one Trump picked, but it bears striking similarities to methods previously backed publicly by Peter Navarro, the ultra trade hawk. And here are some details from the inside story on President Trump's whirlwind decision to blow up global trade. Not long after Trump's inauguration, the administration's economic staff went to work on a daunting task determining tariff rates for dozens of countries to fulfill the president's campaign pledge of imposing reciprocal trade barriers. After weeks of work, aids from several government agencies produced a menu of options meant to account for a wide range of trading practices. Instead, Trump personally selected a formula that was based on two simple the trade deficit with each country and the total value of its US Exports. So Professor Galbraith, what do you make of this approach by Trump shunning the formulas that were given to him by his aides and instead going, well, it's quite astonishing.

[James Galbraith]

First of all, it's nothing like a reciprocal tariff arrangement. It is not connected to the tariff rates that other countries are charging us. The trade deficit that we have with any particular country is an entirely different matter. And what he apparent basis of this is the idea that we should be engaged in balanced trade with every country out there. And the world hasn't worked that way. And I don't think it's ever worked that way. But it certainly does not work that way in recent times. And the tariffs are very unlikely to achieve that result. But I don't understand why you would want to wear. You look at particular cases. Well, you find that with certain very poor countries like Madagascar, Lesotho, you have countries which export vanilla or diamonds or something like that to the United States and don't import very much from the United States because we don't produce anything they can afford to buy. And why would you hit their exports with a big tariff? It's a very strange strategy, but that's a really sidelight. The major thing here is the effect on our major trading partners. And I think here there are two separate broad cases. One is with Mexico and Canada, the tariffs are relatively light. And the idea there, I think is to basically make it survivable for those companies which have very, very deeply integrated supply chains with those countries. And the other part is with China and with the extensions of the, of the Chinese trading block in, in East Asia, Vietnam, Myanmar, Thailand, where countries have been, companies have been leaving China in order to establish export platforms for the United States. And all of that's coming under very heavy tariffs which, against which the Chinese are retaliating. And so what I think you're going to see there is just deepening integration of the Eurasian economic sphere. Japan, South Korea and China have already gotten together. Very remarkable meeting to coordinate their response. And I think you're seeing it to the extent that there's a strategy behind this rather strange formula. It is it will consolidate the Asian economies as a internal trading block and reduce the across Trans Pacific trade by substantial amounts in favor of North American trade.

[Aaron Maté]

So here's an example of how the Trump administration made its tariff calculations. This comes from James Suraecki on Twitter. Just figured out where these fake tariff rates come from. They didn't actually calculate tariff rates plus non tariff barriers as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us. So we have, for example, a $17.9 billion trade deficit with Indonesia. Indonesia's exports to US are $28 billion. So 17.9 out of 28 billion equals 64% which Trump claims is the tariff rate Indonesia charges US. What extraordinary nonsense this is. I mean, first of all, do you agree, James Galbraith, that this is nonsense and you know, explain more nothing to.

[James Galbraith]

Do with the tariff rates that Indonesia charges or the Vietnam charges or the China charges. It's not connected to the tariff rates at all. Which I say it's not that the tariff that's being imposed is not a reciprocal tariff in any normal meaning of that word. So it's a confected number which is supposed to represent trade barriers generally, but it doesn't and represents the pattern of trade which has a lot to do with the income levels of different countries and what, the composition of what they export and what they import. The United States exports very high value products to the extent that we still have them and those tend to go to high income countries to a larger extent. So there's only a certain number of aircraft and a certain number of, let's say oil field systems and a certain number of medical imaging devices and so forth that low income countries can absorb. So that's, this is the, the, you know, there's an underlying, if there's an underlying idea that we should have balanced trade with everybody. It's, it's obviously something of a, of a pipe dream. But again, I don't think that's, I mean, I think you look that you look at the results and then you say, well, this is really going to hit the suppliers that are based in, in, in East Asia, Southeast Asia. And it's going to, because of the easier deal that Canada and Mexico got, it will hit them less and maybe there will be trade substitution which will strengthen their trade with the United States, although even they will experience substantially higher tariffs than they've had before.

[Aaron Maté]

And what do you think this means for the goods that these countries produce that provide cheap products for American consumers? Like is this era of cheap goods, cheap merchandise, is it over?

[James Galbraith]

Yes, I think we're going to see very substantial increases in all kinds of consumer goods. Anything that's coming is coming from Asia. That supply chain has just been hit with a very big tax and that will show up basically as a kind of sales tax on American consumers. Lots of food products will be subject to very substantial cost and price increases coming from, I was just reading about seafood. 85% of that's imported and a lot of it is imported from Asia. And you're going to see that's a product with a very short shelf life and you're going to see price increases there quite substantially. So the American consumer has been living for a long time on the strength of the dollar and on the free trade system and the willingness of other countries to ship U.S. goods at, at low prices. And the Trump administration come in Put an end to that. And they certainly have a tool that will make that happen. And the first effect will be on living standards. A second effect will be on the financial system, I think, because companies that are caught up in supply chain disruptions are going to have trouble meeting all of their commitments. So we'll see that. I think that's why what you're seeing in banking stocks, there may be an effect on the dollar as well, which contribute further cost increases down the road. What they're hoping for is that there will be investment and increase in import substitution, we call it increase in jobs in the United States. And that's a very problematic proposition. And my view is it would take a lot to reverse the damage to the industrial base of the United States over the last 40 or 50 years. You would need a lot more personnel who are capable of doing that. You need a lot of investment in infrastructure. You need regulatory structures that will press corporations to make those investments. And they're just relying on the market for that. And that's a good luck. You're not going to get it. What you're going to get is the empowerment of a small subset, a subset of American companies that will take advantage of the higher prices that they can charge and the American consumer will, will absorb the blow.

[Aaron Maté]

We're talking about the impact of Trump imposing global tariffs with James Galbraith. He is an economist and professor at the University of Texas, Austin, author of many books, including his latest, Entropy the Living Basis of Value and Production. Now, while there are many Wall street analysts and economists that have been critical of Trump tariffs, he has gotten support from some workers and they were among the crowd at the White House for Trump's so called Liberation Day announcement. A group of autoworkers were there at the White House and one of them spoke alongside Trump. We can't thank you enough.

[Dennis Kucinich]

And in six months or a year, we're going to begin to see the benefits. I can't wait to see what's happening three or four years down the road.

[Aaron Maté]

Thank you, Mr. President. So that's a clip from the White House announcement where Trump enacted the executive orders imposing global tariffs. And you see there a contingent of auto workers saying that, you know, yes, there might be some short term pain right now, but within six to 12 months this is really going to help us. So, so James Galbraith, can you respond to that? This is not just.

[James Galbraith]

There's no doubt they're speaking to their interest. One can't fault them for being happy with getting a protective barrier against a body of Imports that have been undercutting them for a long period of time, for sure. No question about that. The question is for, the larger question I would ask is if we're going to see a significant decline in imported automobiles, are we going to see a corresponding increase in high quality American automobile production? That is again an open question. That's the question I would focus on. I don't know that we, I think we will see some. I think also I should have added here that the position of the European producers is even weaker and they are almost surely going to accelerate the movement of European factories to the United States. So we'll see some of that for sure. I'm not saying this isn't going to work in the interests of some segments of the company.

[Aaron Maté]

And what do you make of the critique that basically whatever Trump might be doing wrong here, at least he's doing something. Whereas Democrats have talked about some Democrats like Bernie Sanders. Well, Bernie's an independent, but Bernie is an independent on the Democratic side. And Barack Obama, they've criticized these so called free trade deals, but they've done nothing about them, including Obama when he was in office. I mean, here for example, is David Sirota pointing out that workers, some workers are applauding Trump's tariffs. Neither Democrats nor elite media seem interested in exploring the other side of the tariff debate. And he quotes Sean Fain, the head of uaw, saying, we applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities. And here's Bernie Sanders back in 2008 and listen to what he said about the impact of these so called free trade deals on the working class.

[CNN Reporter]

Further, what they have said is that we need to not worry about manufacturing in America because what we should establish is a policy of unfettered free trade. We don't need tariffs. What we need is to allow corporate America the freedom, the freedom to throw American workers out on the street. People are making 15, 20, 25 bucks an hour. Health care, pensions, throw them out on the street. Because somehow, Madam President, we are going to create wealth in America and good paying jobs in America. As we shut down plants, we move to China. Corporations there's pay workers 20, 30 cents an hour and we bring the product back into this country. And anyone who goes shopping in a mall knows how difficult it is today to find the product made in America. But that is the philosophy and I have to say in that regard, the champion, and he is honest on this one. Senator McCain has been criticized recently for not being the most honest candidate we have seen in terms of his ads and so forth, he has been honest on this one. He is the lead advocate of unfettered free trade.

[Aaron Maté]

And that's here's Barack Obama the same year 2008. We can't keep passing unfair trade deals like NAFTA that put special interests over workers interests. And it's because of this longstanding commitment to working families that I will not sign any trade agreement as president that does not have protections for our environment.

[James Galbraith]

And protections for American workers.

[Aaron Maté]

NAFTA needs to be amended. And I've already said that I would contact the president of Mexico and the prime minister of Canada to make sure that the labor and environmental agreements are actually enforceable in the same way that patent protections and other things that are important to corporate America are enforceable. So what would you say, James Galbraith, that someone who might look at this and say, well, you know, Democrats have been talking a big game for a long time but have done very little about it. Here is Trump finally coming along and doing what progressive voices have been promising to do for a very, very long time and wanting to do for a very long time?

[James Galbraith]

No, that's entirely true. Again, I was working for the Congress at the start of this, which predates NAFTA by well over a decade in the early late 70s and early 80s with the so called Reagan revolution and Paul Volcker's shock to the dollar which devastated the American industrial base in the recession of 1981 and 82. The point I would make is we're a long way from that. It's not simply a question of putting up a trade barrier and then saying it's all going to get better very quickly. You can set the conditions where it might start to get better, but it's very likely that the same American corporations who rapaciously outsourced and deindustrialized are going to look for the easiest way to make a few dollars off of the tariffs without producing the great expansion of industrial capacity which has been lost and which may well be at least very slow to return if it's possible to bring it back at all. Remembering that to do this successfully, you probably need larger markets than just the United States. You need to be competitive in the world. And out there in the world, the situation has changed dramatically. In the 1980s, China was not an industrial power with any significant presence in the world. And it's now the world's largest industrial economy with, you know, high, very cost effective products and very great market access around the world. So we are reentering you know, if we are truly re entering the race at this point, we have two great disadvantages. One is that we have a serious competitor on a scale that, that we didn't have before. And the other is that we are trying to do this with one tool, which is to say the tariffs, and not with any of the other tools that would be required to map out a plan for effective reindustrialization. So that makes me not very optimistic. If you think you're just going to set up a tariff wall and then the market will fix everything else, then you're basically handing the initiative to, say, people who are not going to execute. And that's the point I would make. So I'm not disagreeing with the position that Bernie Sanders just described. I'm not disagreeing with the happiness of the auto workers. There obviously are still significant interest and workers interest in this country that will benefit from the tariffs. That's clear enough. But that's only a very small part of what this project was supposedly setting out to achieve.

[Aaron Maté]

And just very briefly, as we wrap, if you were advising President Trump, what other tools would you be advising him to use to achieve the goals that he says he wants, which is to rescue American jobs?

[James Galbraith]

An effectively functioning federal government. An effectively functioning federal government with the expertise to give you advice over a wide range of industrial and other areas and to understand what you are doing to the financial sector and to be prepared to cope with that. And so far as I can tell, judging from, among other things, the clips you've just been playing, that's precisely what it doesn't have. And they've set out and since to further degrade the government, which was already deeply degraded from the time of Bill Clinton, but especially the time of George W. Bush, onward even earlier. And so the capacity of the federal government to be a partner and an effective force for a major economic strategy is not there, as it was in the 1930s and the 1940s when Roosevelt came in with a New Deal and then built up the country in such a way that it could provide the, the armaments necessary for basically all the combatants on the Allied side to prosecute the Second World War. You can imagine if you go back and look at that history, the government was deeply involved at every level of the transformation that was required. It didn't just call on the private sector to go do it. And that's the concern I have. I don't think we have that capacity anymore. I don't think we even have a contract of the need for that capacity.

[Aaron Maté]

James Galbraith, author, professor of economics at the University of Texas, Austin. His latest book is Entropy the Living Basis of Value and Production. James Galbraith, thank you so much for joining us today on the Jimmy Dore Show.

[James Galbraith]

Thank you for having me. It's a pleasure talking to you.

[Aaron Maté]

All right, we're talking about Trump threatening to bomb Iran. And one person who was not upset by these threats is the Republican Senator, Tom Cotton. And in fact, he doesn't understand what the big fuss is about, to the point where, when he recently questioned the incoming chairman of the Joint Chiefs of Staff, Dan Kaine, Tom Cotton asked, Dan Kaine, will you be ready to execute an order to bomb Iran if the.

[General]

President asks for military options to support what he has said publicly, that if Iran is not willing to make a deal that there will be bombing, do you commit to provide him the best and candid advice you can about viable military options and the likely consequences of each?

[Aaron Maté]

Senator, I think that's what the job of the Joint Staff is to do, is to provide a range of options.

[James Galbraith]

For the President to consider and then.

[Aaron Maté]

Allow him to select whatever those options work best for him.

[General]

Thank you. And finally, there's some hysteria about the prospect of the President ordering these strikes or someone like you in uniform providing him advice that it's going to lead to another forever war or another endless war. Are you aware of operations, maybe operations against Iran, like the tanker wars in 1988, in which the forceful but discriminate application of military power did not lead to a forever war or an endless war, but rather led to peace?

[Aaron Maté]

Yes, sir, Those examples in our history do exist.

[General]

Maybe the Qasem Soleimani strike in 2020 as well, that caused Iran to pull in its horns for the rest of President Trump's first term. Thank you, General Kaine.

[Aaron Maté]

Thank you, Senator. All right, let me bring in former Democratic member of Congress Dennis Kucinich. When he was in Congress, he had a much different take on the prospect of war. He was leading the charge against it. He was the leading congressional opponent of George W. Bush's invasion of Iraq. So, Dennis Kucinich, when you hear that from Tom Cotton, he's mocking people who are afraid of attack on Iran. He calls that hysteria. And then he tries to argue that, look, we've done this before, we've had wars with, we've had battles with Iran before, and things went fine. So what's the worry about? What do you make of that argument from Cotton?

[Dennis Kucinich]

A couple things. First of all, I've met Senator Cotton a few times. He loves America. Otherwise he wouldn't be serving in the U.S. senate. And he wants to protect America. I understand that the general who he had a colloquy with has a responsibility to follow orders. He wants to protect America. That same kind of thinking existed when we were told back in 2002 that Iran had weapons of mass destruction that they were going to use against the United States. Iran didn't have those weapons. But we were lied to. Iran didn't have the intention or the capability of attacking America. Iran was not involved in the anthrax attack. We found out later on the anthrax came from Fort Detrick, Maryland, from an army lab. Now let's compare that to where we are right now. Iran doesn't have the intention or capability of attacking the United States. Iran hasn't, you know, done, has not developed a nuclear weapon. Our own intelligence agencies say that. So if that's the case, what is compelling senators, congressmen to say, yeah, go for it, Bomb Iran. People aren't thinking, America's not at risk here unless we do bomb. And this is as old, you know, this is an old story in history which historian Barbara Tuchman brilliantly analyzed in her book the March of Folly. You know, she did a sweep of history from the Trojan wars all the way through to Vietnam to show how leaders, wooden headedness, she calls it, made worse the better reason and ended up attacking other countries to the detriment of the country that did the attacking, you know, and of course to the, of the people they attack. So this is, we have to evolve as a species here. You know, this is about, do we have a capacity to do that? We have to or we're going to destroy ourselves. And so I see the, even the talk about the bombing, you got to think there is unity of thought, word and deed when people think about it and then they articulate it. And when it's the President of the United States who's doing this, you have to pay a very small, close attention. And then they get ready to do it. You know, there's a chance they might go ahead and bomb Iran's nuclear infrastructure. No one's thinking about the consequences of that. And if they are, they should share that with the American people. Because what I did in my column and substack was show that if you bomb a nuclear reactor or a nuclear lab, radiation is going everywhere. If you use nuclear weapons. And every one of those bombs that the B2 bomber can carry, each one of them is 80. Hiroshima, 8, 0. What are we talking about? You know, presidents Obama and Biden talked about moving the B83 bombs out of the American inventory. President Trump kept them alive. Again, this is not just about President Trump and who he is. This is about who we are. We ought to be calling our members of Congress and the Senate and saying, hey, wa. Stop it. Stop this madness. You know, most people aren't. If you ask most people where Iran is on a map, they wouldn't be able to find it. But let me share some information. Iran is a technologically advanced society. They're part of the Persian culture, very famous for art and literature and mathematics. 90 million people. 90 million. You're talking about a country bigger than Texas. Okay, where are we going with this? We're actually thinking about bombing the nuclear infrastructure with nuclear weapons of a country with 90 million people. And we don't think there's going to be any consequences to that. If you bomb one place out of the over dozen installations that are nuclear, you're talking about radioactivity that is going to result in radioactive poison, increases in cancer, genetic defects, and of course, the more place you bomb, the more, the wider it spread. You know, this is a doomsday scenario we're talking about here.

[Aaron Maté]

Yeah, and this one that Trump campaigned against. What's funny about that clip of Tom Cotton mocking people who are concerned about what he calls forever wars, which he puts in quotes derisively, is that, you know, Trump campaigned against forever wars explicitly. This is Trump back in 2020.

[Dennis Kucinich]

We are ending the era of endless wars. In its place is a renewed clear eyed focus on defending America's vital interests. It is not the duty of US Troops to solve ancient conflicts in faraway lands that many people have never even heard of. We are not the policemen of the world.

[Aaron Maté]

And slash, Trump in 2020 and during this most recent cycle, he explicitly criticized Joe Biden for bombing Yemen. I look at your policies, I see.

[Dennis Kucinich]

Secure the borders, bring jobs back. I look at the Democrats and many Republicans and it's foreign war and foreign expansion.

[Aaron Maté]

What is that?

[Dennis Kucinich]

I think it's just a failed mentality. It's crazy. You can sell problems over a telephone. Instead they start dropping bombs. I see recently they're dropping bombs all over Yemen.

[James Galbraith]

You don't have to do that.

[Dennis Kucinich]

You can talk in such a way where they respect you and they listen to you.

[Aaron Maté]

Dennis Kucinich, I mean, you're a rare Democratic politician who's tried to reach across the aisle. And I know that there are people in Trump's base who agree with this message. It's what they voted for which he now seems to have completely abandoned, at least when it comes to ending the wars in the Middle East.

[Dennis Kucinich]

Well, we have to ask why? And it's a tragedy because as you played that tape, and I'm listening to it, I'm thinking, yes, he gets it. He understands that what America risks. But what's happened, what's happened is that President Trump, as many presidents have been, is open to influence by individuals who are not necessarily Americans, who don't have America's interests at heart and who have their own political agenda. And when you look at Prime Minister Netanyahu, he is trying to stay out of jail. In order to do that, he's got to keep his coalition together. His coalition are some of the most devastatingly right wingers, hardcore Zionists who are dedicated, you know, who are okay with killing Palestinians and they're okay with killing Iranians. Now this, if there is a war against Iran, it will not be without consequence for people in Israel. Iran has the ability, even if being bombed, they have a missile system that is all over their country. They have the ability to launch multiple independently targeted missiles that they can change the direction in flight, defeat Israel's missile shield. They have the ability to strike Israel. And I don't have any doubt that if the United States bombs Iran, that Israel is going to pay the price. The people of Israel will pay the price. In addition to that, if it's a full scale attack on a nuclear infrastructure, the radiation could reach the Middle east and Israel, Syria, Lebanon, the wider region. People have to think about consequences here. One of the things we do with the child at the earliest age, we teach them the consequences of their action. And no one's talking consequence. They're just like, well, if we can do it, we'll do it. Really. That's not what life is about. You have to make decisions based on what's rational and what's right. Now, President Trump is a celebrated deal maker. He broke the deal in 2017 that it took Six Nations 13 years to construct, but he set it aside. Iran continued with its program not to make a weapon. They continue with their nuclear program. Nuclear power, just like we have nuclear power, provides energy to our communities. But what's happened here is that the President has now decided that, you know, he's, he's not going to negotiate or he's going to make a non negotiable demand which isn't negotiation. And while the content of the letter that he sent to Iranian leaders has never been released, it's pretty clear from the sense of Things that he's just telling Iran. You got to get rid of everything that is nuclear, your nuclear reactors, your nuclear research labs, everything else, or else we're going to bomb you, the likes of which you've never seen before. Now, come on. I mean, he's president of the United States. When a president of the United States says that, you better take it seriously.

[Aaron Maté]

All right, here's the headline from the Hill. New poll, Democrats approval remains at low point. And to break it down, let's go to CNN1.

[CNN Reporter]

Holy Toledo. Voters views of the Democrats in Congress. Among all voters disapproving 68%. And look at the approved number, just 21%, even lower than the Democratic Party at large. This is the lowest on record for Democrats according to Quinnipiac University polling. You think these numbers are bad? Let's go to this side of the screen. We'll look at how Democratic voters feel. Get this, the plurality of Democratic voters disapprove of Democrats in Congress at 49% and just 40% approve. Horrible, horrible, horrible. My goodness gracious. You just can't get worse than these numbers. And this is the number right here.

[Dennis Kucinich]

Really driving all of this.

[CNN Reporter]

As Democrats have turned, if Democratic voters have turned on Democrats in Congress and the Democratic Party, that's what puts the.

[Aaron Maté]

Numbers at historic lows.

[Dennis Kucinich]

What is it they want to be seeing these voters?

[CNN Reporter]

What is going on? I'll tell you what's going on. They don't like what's coming out of some of those Senate Democrats like Chuck.

[Aaron Maté]

Schumer, because let me bring in former Democratic member of Congress Dennis Kucinich, who's ran for the Democratic presidential nomination. Try to take your party in a different direction. Economic populism, Medicare for all, being about peace, the party decided they didn't want that, went in a much different direction and now they're at a record low approval rating. What are your thoughts on the state of the Democratic Party brand? DENNIS Kucinich?

[Dennis Kucinich]

Well, because the American political system, which is essentially a two party system, although I've run as an independent at times, I was actually elected defeating both political parties when I was mayor of Clavin. This system, this system is, requires parties to offer something different in order to, you know, create like the dialogue that is like a dialectic that somehow could benefit the American people. What's happened is this about 40 years ago, the Democratic Party started to take corporate contributions. As a matter of fact, you know, when I first came to Congress, you get a book, the party will give you a book that's like this thick and it'll have potentially hundreds and hundreds of people. You could dial for dollars and they'll give to your campaign. Well, a lot of them are corporate PACs. You take that money and you're marked. And so when the Democrats started taking corporate money, they changed the tune of the party. The opportunities for economic reform started to whittle away. I ran into this when I was advocating Medicare for all, and I was the last person standing when President Obama was pushing the Affordable Care act and he wouldn't hear about even a public option where states would have the ability to be able to have their own public system. They didn't want to hear about that. The Democrats and the political system are held captive. The decision of Citizens United basically put that in, you know, stone money, free speech, Corporations can buy elections now, and other interest groups weigh in, buy elections. So what happens is you have a homogenization of our politics. It's all the same people. And so when people are being told by the Democratic Party, vote Democrat. Well, why? So here's the Democrats need to go back to that old time religion of economic reform. In 1932, Franklin Roosevelt demolished Republicans at the poll. Herbert Hoover won big in 1928. But when Roosevelt proposed a way of getting out of an economic depression and put a New Deal forward, that really lifted people from the bottom up, okay, this was the cardinal principle of a Democratic Party, that you protect everyone. 1932. The Democratic Congress, which was in bad shape in 28, suddenly rocketed to control in 1932 with the Roosevelt banner. When Medicare was formed under Lyndon Johnson. That was a seminal moment where Democrats recognized the economic needs of the people. What happened is that we forgot as a party, we forgot that history of Roosevelt and the New Deal, of Johnson and the Great Society, Medicare and the trade deals, NAFTA and things like that, it was like all of a sudden, people are just being used. So Democrats know they're being used. And Trump's election and his reelection was not so much that people were in love with Donald Trump, although, you know, he does have a lot of supporters. But there's also a good number of people who say the Democratic Party has failed us and we're not going to give them support just because they exist. So there needs to be a dramatic change in what the Democratic Party stands for. And you got to go back to what were the motivating principles in the New Deal. What were the motivating principles of the Great Society? I mean, we can do that, but it's going to require dramatic change in our politics. And whether or not, and frankly, based on those poll results you just put on the screen, you know, American people I think are ready for something different inside the Democratic Party or maybe an.

[Aaron Maté]

Entirely new party altogether.

[Dennis Kucinich]

Look, that's quite possible. You know, I can tell you, as you know, in this past election I ran as independent for Congress because, you know, I had it up to here with the Democrats being for war. I'm not for war. War is stupid. You defend your country, but you don't need to aggress against other countries. What I found out was this. I got more votes than any independent running for Congress in the House, in the whole country at over 50,000 votes. But the polarization in the country right now is so great, Aaron, that people, even if they don't know the candidates, they'll vote the label R or D. And that's something you got to think about. It's not like just because you come up with all kinds of great ideas or people know you may not be enough. So, you know, does America need more options? Of course. How about a two party system?

[Aaron Maté]

Dennis Kucinich, former Democratic member of Congress representing Ohio, former mayor of Cleveland and and former Democratic presidential hopeful and consistent advocate for peace and justice. Thank you so much for joining us on the Jimmy Dore Show.

[Dennis Kucinich]

Thanks so much. And read my substack and see where I stand. Thanks again.

[Aaron Maté]

Thank you, Dennis. Thank you.

[Jimmy Dore]

Hey, become a premium member. Go to jimmy dorecomedy.com, sign up. It's the most affordable premium program in the business.

[Dennis Kucinich]

Don't freak out. Don't freak out.

[Jimmy Dore]

All the voices performed today are by the one and only, the inimitable Mike McCrae. He can be found at mike mccrae.com that's it for this week. You be the best you can be and I'll keep being me.

[Aaron Maté]

Out.

[Dennis Kucinich]

Don't freak out.

[Aaron Maté]

Don't, don't.

[Jimmy Dore]

Don'T freak out. Don't freak out.

[Dennis Kucinich]

Don't freak out.

[Jimmy Dore]

Don't freak out. Do not freak out.

[J.D. Vance]

I'm not in it.

[Aaron Maté]

Do not, do not freak out.

[Jimmy Dore]

Do not freak out.