NIMA ALKHORSHID: Let me start with a clip from an interview that the New York Times did with Mandy Patinkin, about the situation with Israel and Netanyahu and right-wing parties.
DAVID MARCHESE (CLIP 1): Are you thinking or feeling any differently about what it means for you to be Jewish in this moment?
MANDY PATINKIN (CLIP 1): Yes, I am. I'll let them go first.
KATHRYN GRODY (CLIP 1): I hate the way some people are using antisemitism as a claim for anybody that is critical about a certain policy. As far as I am concerned, compassion for every person in Gaza is very Jewish, and the fact that I abhor the policies of the leader of that country does not mean I'm a self-hating Jew or I'm antisemitic.
DAVID MARCHESE (CLIP 1): You mean Netanyahu when you say the "leader of that country?"
KATHRYN GRODY (CLIP 1): Yes. The politics of what he's doing is the worst thing for Jewish people. It's like lighting a candle for anybody that has any antisemitic feelings. It's creating a generation of wounded and hurt kids who will understandably be very angry. I feel deeply troubled and horrified by what is happening in my name.
MANDY PATINKIN (CLIP 1): 10 or 15 years ago, I was in Philadelphia, getting ready to do a concert with my dear friend Patti LuPone. I go up to the hotel room and "The Princess Bride" was on, and just as I walked in the room was that final scene in the movie where Inigo is sitting by the window with the Man in Black, and the Man in Black asks Inigo, would he like to be the next Dread Pirate Roberts, and Inigo Montoya said these words: "I have been in the revenge business so long. Now that it's over, I do not know what to do with the rest of my life." And I ask Jews to consider what this man Benjamin Netanyahu and his right-wing government is doing to the Jewish people all over the world. They are endangering not only the State of Israel, which I care deeply about and want to exist, but endangering the Jewish population all over the world.
DAVID MARCHESE (CLIP 1): And endangering the Jews by endangering those in Gaza.
MANDY PATINKIN (CLIP 1): To watch what is happening, for the Jewish people to allow this to happen to children and civilians of all ages in Gaza, for whatever reason, is unconscionable and unthinkable. And I ask you Jews, everywhere, all over the world, to spend some time alone and think, Is this acceptable and sustainable? How could it be done to you and your ancestors and you turn around and you do it to someone else?
NIMA ALKHORSHID: I think that what's going on is universal, with the case of Netanyahu. And I want to start with Michael's take on what he said.
MICHAEL HUDSON: About a month ago, Netanyahu said that the greatest enemies of Israel were the assimilationist Jews throughout the world. And he said, basically, that they are the critics of Israel. What Netanyahu was doing was backing the extreme right-wing Orthodox Jews who support him, against the old idea of cultural Zionism where Israel was depicted more or less as working on a kibbutz and being almost like a socialist economy instead of a racist genocidal economy.
Regarding what Mandy Patinkin said, and it was a wonderful quote: in the recent New York City elections, as I think we've said, the largest group supporting Mamdani, the socialist candidate who was denouncing genocide, was the Jewish population. In other words, you have a reaction by the progressive Jewish population, in America and I think all over the world, who say "We've suffered enough from ethnic prejudice. We want to assimilate."
In the United States, you had Jewish representatives among the leaders of the support for the black movement in the 1960s, the 1970s. And this really is a decisive point.
There's no question [about what Mandy said]. When Netanyahu and President Trump say "if you don't support Israel, you're an anti-Semite; if you don't support genocide, you're an anti-Semite; if you don't believe it's necessary to defend Israel by killing all the non-Israelis and exterminating them as a new Holocaust, you're an anti-Semite"… Well, what are people to say? "Well, gee, I believe all these things. Does that make me an anti-Semite?" I think that's what Mandy Patinkin was saying.
Israeli behavior in the Near East is a crime against civilization. What they are doing breaks every international law, every element of what people think is a civilized society. Is it anti-Semitic to support civilization? This has created a split.
President Trump says "we're closing down Columbia University, because students at Columbia from the Israeli Defense Forces feel threatened by the fact that there are students saying genocide is bad." These IDF students feel that if you say genocide is bad, you're attacking Jews all over the world. The same statements are made by Merz in Germany, where any defense of the Palestinians in Gaza is banned. This is literally a dividing line. What side are you on, barbarism or civilization? And they've made it a Jewish issue.
RICHARD WOLFF: Nationalism has been used for progressive purposes, and nationalism has been used for fascistic purposes and everything in between. Every time Mr. Trump does anything that he knows millions of Americans do not agree with, it is very important to label what he's doing as American. And anybody who disagrees with him is literally un-American.
For many decades, we had in the United States Congress an un-American activities committee whose job it was to ferret out people who disagreed with policies of the U.S. government and to declare them as enemies of the state, enemies of the culture, fundamentally "un-American" – then, at least partly on that basis, to imprison them, to deport them, and in the case of some of them, drive them to insanity and every other horror you can think of. That's my first comment.
Here's my second. We have in the law the idea that if and only if you are immediately threatened with bodily harm, that you feel genuinely that your life is in danger, only then do you have anything remotely like the right to self-defense. Israeli bombing of citizens in Gaza who are not shooting at them, who have no means to shoot at them and have had no significant means for years, who are subject to mass slaughter – this cannot be justified by pointing out something that was done by a very small political group called Hamas two years ago. This violates, as Michael said, every basic notion of what is just, what is fair, what is allowable in the extreme case of feeling self-defense.
What someone in October of 2023 did to a fellow citizen of yours is never, in any law that I know of that isn't crazy, a justification for taking massive numbers of other people's lives. During World War II, it was very frequent to denounce the Nazis when, having been attacked by some partisan group, they collected all of the adult citizens in a village and shot them. The notion was that we, the Germans, being put upon by some partisans, therefore have some right to mass slaughter of people who were not involved in that effort, who were not subjected to any legal procedure to link them. We are now celebrating people doing what not so long ago we decided was beyond the pale.
I want to remind you: in the Nuremberg trials and their aftermath, the whole world sat in judgment for months, deliberating (in a way that the people they were judging never did), allowing witnesses, before it was decided that crimes had been committed – and there was specific reference to the mass killing of people who had not done anything. And those [criminals] were executed. The leaders e.g. Goering, Goebbels, the people they were able to catch, were executed by the West as a sign of the utter unacceptability of this behavior. And it is very close to what is going on in Israel. And I think for me, the worst of it is the use of nationalism.
For an American audience, it is particularly important to understand how nationalism has been used as the cover for people with an agenda we ought to be horrified by and not allow them to use nationalism. And that's really what this is.
Mr. Netanyahu wants to equate the national notion he has of Israel with the obligation of every Jewish person around the world. That's a ploy that is very common among nationalists. That's how they recruit for and sustain their movements, by suggesting that you have to be like them if you're going to wear the label – you know, French or Spanish or Jewish or anything else.
We've gone through enough in the last 200 years. Two world wars with an awful lot of nationalism.
Let me close with a story. When World War I broke out in 1914, the German parliament was roughly equally split, with the Socialist Party being by then the number two party in Germany controlling over 40% of the seats in the parliament. Kaiser Wilhelm (who was no longer Kaiser by the end of the war, but at the beginning of the war he was still Kaiser i.e. king of Germany), went on the radio and he said something that became very famous in German history. "Ich kenne keine Parteien mehr, ich kenne nur noch Deutsche." I do not recognize any parties anymore. I only recognize Germans.
There it was. To mobilize the people to fight a world war (which Germany lost) he had to try to overcome what? The fact that the Socialist Party, at least on record, was against fighting a war and would have voted against funding it. To stop that, he had to make everybody into a loyal German.
Let me remind everyone, not just outside of Israel, but a huge part of the Jewish population in Israel is against what is going on.
They consider themselves Jews. That's the part I'm talking about. They consider themselves Israelis, and they consider themselves patriotic Israelis. And in many ways, they are. But they are the sworn political enemies of Netanyahu and much, unfortunately not all, but much of what Netanyahu stands for- as you can see if you paid attention to Mr. Netanyahu's failed efforts to transform the judiciary in Israel and his failed efforts to win a large part of the Jewish population.
It is therefore doubly ironic that people who are critical of Mr. Netanyahu and of the war, have an easier time in Israel than they do in New York or Philadelphia or Los Angeles. And that's because the anti-Semitic nonsense is a cover, not just for Mr. Netanyahu, but for Mr. Trump.
The Republicans and Trump just voted to defund public radio and public television. That's who they are. They don't want public anything. They want everything to be handled either by the business community, that's their first choice, or by the paid representatives, that's the religious community. One or the other. They don't want a government that is representative in any way of the mass of people. And they want to smash national public radio. They did it. They want to smash the universities that train people to think at least critically enough to be not amenable to MAGA mentality.
The anti-Semitism is purely the thinnest of fig leaves covering a political agenda of the extreme right wing who see this moment as the first in a century and need to milk it for everything they can get before Mr. Trump is ushered out into the pantheon of horrible experiences right alongside of Joseph McCarthy.
NIMA ALKHORSHID: Michael, before going to the next topic, do you want to add something?
MICHAEL HUDSON: No, it's just to point out that after all, it was the right-wing party in Israel that assassinated Prime Minister Rabin for trying to support peace. So, of course, they kill each other politically.
NIMA ALKHORSHID: Michael, what has happened with the case of Ukraine? Europeans are trying to buy weapons. Donald Trump is bragging about selling more weapons to Europeans. These wealthy European countries are going to pay us [Americans] for the weapons. And we're going to to benefit a lot from what's going on in Ukraine. But they're going to pay, they may send it to Ukraine. But when it comes to the economy of European countries, we know that France said they're not going to pay for that. And it seems that mostly they're going to put it on Germany. And I don't know if the United Kingdom is willing to go in that direction. But considering the economy of Germany, how Merz can somehow convince the German people that they can pay for that? And nobody knows when they're going to get these weapons, if they're going to be used in Ukraine anytime soon, and the capability of the military-industrial complex of the United States to produce them as soon as possible. These are huge questions when it comes to the latest talks between Donald Trump and the NATO Secretary General Rutte.
MICHAEL HUDSON: You've put in a nutshell just about everything that I would have said.
The problem Trump is dealing with is America's deindustrialization. How can you rebuild a trade surplus if you've deindustrialized? Well, as we discussed before, the only way to do this is to say, we're not going to compete in automobiles or the usual industrial manufactured products. We're going to deal with monopoly products that will enable us to charge much more for the exports than it actually costs to produce them.
So we're not only talking about normal profits for industry, which is unable to make a profit under Trump's rules, but super profits which are monopoly rents. And arms, along with information technology, are one of the designated monopoly rent-yielding export markets.
So Trump has said, we're not going to give any more American arms directly to Ukraine. We're going to say, Europe, it's up to you to defend yourselves. You want to fight Ukraine and Russia? You want to carry the new Cold War costs in Western Europe to Russia? Be our guests, but you'll buy your arms to fight Russia from us. You will pay full price, buy American arms, and then it's up to you whether you want to use these directly to fight Russia or whether you want to donate them to Ukraine. But we're not going to spend the American budget directly on supplying the Ukraine war anymore. That's what he's doing, and that's a rational procedure.
What you're pointing out is what seems to be irrational at first sight. Why on earth would the Germans go along with it and change the rules of the European Union? There's a rule against running a budget deficit of more than 3%, maybe more than 5%. We're going to change these rules so that the European Union and Germany, its members, can spend much more, can create its own money to buy American arms to fight the war to attack Russia. It's not a defensive war, it's an attack war.
How are we going to try to balance the budget? The increase in military spending is from the 2% under NATO that was set before Trump, to 5%. That's an increase by 3% of GDP, but the entire economic growth of Europe is normally 3%. The entire economic growth each year is to go to providing military exports. And that can only be achieved by cutting back social spending, cutting back the subsidies on German residents to be able to pay for the gas and electricity to heat and power their homes now that they've stopped trade with Russia.
The cutback in domestic spending, in addition to lower living standards, is going to lower GDP. So the increase in German spending on weapons, while the economy actually goes into negative GDP growth quarter after quarter, is going to be 10, 20, 30 times the GDP growth. The German economy is militarizing.
Mr. Merz said, we're going to make the Wehrmacht the power that it used to be. The power, obviously, under Adolf Hitler. No wonder President Putin and the rest of the world are saying, this is neo-Nazism. They don't realize that World War II is over. They say, okay, let's have a replay. Let's do it all over again. That's what it looks like.
The German population, certainly according to all of the surveys, opposes Merz, opposes the Christian Democrats, opposes the war in Ukraine. It doesn't matter. What the German people say doesn't seem to have an effect on the German government or on the European Union, which has appointed the two super-hawks, Van der Leyen and the Estonian lady. I can't believe that the point you've made will not split the European Union apart.
RICHARD WOLFF: Let me approach it from a slightly different angle.
Mr. Trump promised many times while he was campaigning that he could and would bring an end to the war in Ukraine. To this day, he refers to it as Biden's war because he's so eager not to be responsible. It's a weak way of defending himself: here we are half a year since he's been president and he's not one iota closer to ending the war in Ukraine than he was when he took office.
How do you fix, in the way American politics works, a screaming failure? Well, you pick on whatever aspect of it that you can find where you can do something to try to make it look like you're doing what you're supposed to.
One of the reasons the Republican and right-wing and conservative parts of the United States were not happy with the Ukraine war was the point that Michael just made. Namely, it's the old guns versus butter. It was costing a ton of money for the United States to support Ukraine financially, politically, and militarily. And that this was our money, tax money, and so that was part of the argument.
So he can do something there. He can make the Europeans pay, so it isn't we who pay. And he can get up and talk about "See? I got them to pay, we don't pay" and hope that by talking about that, he can distract us from the fact that he didn't promise to make them pay.
He promised to bring the awful war to an end. Remember how many times he said to the consternation of the whole world that he wanted the war in Ukraine to end because, I quote him now, "people are dying over there". And the whole world pointed out that more people are dying in Gaza than are dying in Ukraine. If dying is an issue, you're not exactly consistent here. No, it made no difference. People are dying, and he's going to bring it to an end. He's not.
And this week was the failure of failures. Every effort he tried: there will be no ceasefire until they do what Putin asked them to do. They [Russia] are not prepared to do that. So we don't have a ceasefire. The war continues. What is he going to do? He promised to do what he cannot and will not do. How does he square that circle? By making an enormous issue about having the Europeans pay.
And the Europeans, having not yet decided to make the break with the United States, mumble and bumble and fumble, and yes, we will. Whether they do or not, whether Mr. Merz can even stay in office – I should remind people, he didn't win by a lot, this is no landslide or mandate-holder. This is a slim politician in a precarious situation.
It's very open how many dollars or euros will ever find their way into these programs. But for the sound bite, and to ease Mr. Trump's political difficulties, Mr. Merz will go along because he wants Mr. Trump to help him in a variety of ways as well. This is an arrangement with lots of verbiage, lots of word salad to cover a temporary fix that solves absolutely nothing.
MICHAEL HUDSON: Richard, I think we now know that Trump never intended the war to come to an end.
He never said his aim was to increase the war, to upgrade it. What he meant when he said bring the fighting to an end is a ceasefire. And during that ceasefire, Europe and the United States was supposed to rearm Ukraine, as it did after the Minsk accords, to rearm and accelerate the fighting to help Ukraine fight against Russia all the more. And it was just a trick with words to say, I want to stop the fighting and end the war, when he really wanted to accelerate the war.
I think the recent speeches of Foreign Secretary Lavrov and President Putin have acknowledged the fact that they now realize that all of this was just a trick by Trump to make them think that he wanted to end the war while actually pacifying them into stopping the fighting so that America could accelerate the war against them as a super hawk. And he's gone beyond Biden's war. He's made it not only his war, but his war with an exclamation point.
RICHARD WOLFF: I just want to acknowledge that that is possible. You know, the way diplomacy and the way the American government particularly works, all we ever do is guess. All you get from Michael and me are the best guesses we can make reading a ton of material and trying not to be too easily fooled. But so much information is withheld that it's this endless politics of speculation.
Look at all the stuff about Epstein. It's the same thing. We don't know tens of millions of pieces of information that might make it a bit easier to figure out what's going on. We are denied that. And that's very unhealthy and gives the people in charge a lot more freedom to fool around with us than we ought to allow if we took our commitment to democracy seriously.
NIMA ALKHORSHID: Yeah Michael, the Epstein case that Donald Trump is somehow trying to dodge, but in the end, the MAGA movement is asking for more from Donald Trump. Why is he so hesitant when it comes to that case?
MICHAEL HUDSON: Well, he's more than hesitant. He's disowned his own MAGA supporters.
This was one of the big things that he had promised, especially to the QAnon conspiracy people. His supporters had said the U.S. government has been captured. It's been captured not only by Trump Derangement Syndrome, but it's been captured by the secrecy of the big state, not only in the JFK files that Trump had promised to release, but Trump had made a big case all along about the Epstein files. Again and again and again, he had mobilized his MAGA supporters by talking about the Epstein files.
Why on earth would he make such a volte-face and all of a sudden call them the radical left, his own MAGA supporters on the radical right? It looks to me like he's very frightened of something.
I don't think he's frightened by the fact that Musk had accused that, well, Trump is in the Epstein files. A few days ago, there was testimony by a girl who was 14 years old at the time who described in 20 minutes the awful things that Trump did to her with Epstein. But I think there's been enormous pressure brought on Trump to say something that is to try to misrepresent what the files were. I don't think there was a file saying, here's a file of people I blackmailed. He was doing it obviously for another party, and he didn't need the file.
What he had was exactly what Bondi, the attorney general, said she had on her desk. She said she had on her desk the pictures of all of these young girls. And she said, they're really terrible pictures. To protect the girls, we don't want to release these pictures. Well, you can always black out the pictures of the girls.
The question is: who are the men with the girls? The men with the girls seem to include a lot of very powerful people who either are Donald Trump's own donors or are powerful enough to bring pressure on him to make him so frightened of the thought of actually showing who the men were in these pictures that he's caused a split among his own followers.
There's now a spreading distrust of him because of his denial that Epstein was involved in any kind of political context for all of this blackmail. Just simple blackmail. No, no, he liked young girls, but that was it. Nothing to see here. Nothing about Israel, nothing about the deep state, nothing about the CIA.
The whole context for this is that politics in America for the last 50 years is all about having blackmail files. In the 1960s, a number of groups said, Gee, Michael, you're a very good speaker. Would you like to run for political office? And I asked some political insiders, what do you think of this suggestion?
They said: Michael, don't even try it. Nobody has anything on you. You've led a normal life. You're happily married. You just do writing. They don't have anything on you. Nobody can trust you because they don't know what you're going to say that may surprise them in a way that they don't like. If you really want to run for office, you have to make sure they have enough on you, so that you can't do anything to expose something they don't want to expose.
Well, just imagine President Clinton trying to run either for governor or more important for president. The Democratic Party had a meeting with them – I'm making up a fictional conversation –
"Bill, you know, we want you to be president, but between you and Hillary, we don't want to be surprised. We're going to ask you to take a trip with Mr. Epstein. And the purpose of this trip is, we want you to get photographed. At least act as if you're doing something that would be very embarrassing when it comes out. We're not going to do anything with the photograph. We're going to keep it in our files just in case you do something that we don't like. In case you don't support Alan Greenspan, and you don't get rid of laws that Wall Street doesn't want, etc etc." Something like that.
All of this back in the 60s and for many decades was only about U.S. politics. But now, with the Epstein affair, the individuals who were his main backers and funders and sponsors all seem to have had very strong connections to Israel, like Robert Maxwell himself. And so there's a belief that what will be shown are not only individuals whose politics and statements have supported the right wing in America, the Democratic and Republican right-wing, but supported Israel too. That's the whole suspicion of all of this.
How else can you explain what's happening and the pressure that obviously is being brought in on Trump? Who is bringing this pressure and why? That's what his MAGA supporters are saying, and in fact, what the whole country is saying right now, judging from today's newspapers.
RICHARD WOLFF: If Mr. Trump has nothing to fear, as any junior prosecutor would say, and if he's in charge, he can open up the files, and there it is, and he's got nothing to worry about. He says he has nothing to worry about. Okay, then open the file! You're the authority. And if you want to protect the young women that were abused, Michael is quite right: there are 50 different ways to do that.
By the way, it might be that those women would like to have a chance to sue, to have a chance to reclaim a little bit of what was in effect taken from them by the experience, when they were young and needed money or whatever it is that brought them into that situation. He can do good by them, give them the option. If they wish to be anonymized, okay, then everything is cleansed up with them.
But if he really wants there not to be the suspicion that he's doing something stinky, well, he has the authority. It stops with him. He can order his attorney general or anybody else to open these files.
And, I love the irony (I'm a bit of a Hegelian): There's Mr. Big and Powerful. There he is working night and day to make us understand he rules the world. He can hit this country with a tariff. He can bomb over here. All the old dying empire's efforts to keep its empire alive. And yet, when it comes to here, he has to deny himself his own power. He has to use his power and use it in a way that makes everyone think less of him, no matter what happens now, right?
If Steve Bannon and all the others… Look at Mr. Johnson, the head of the Republican Party in the House of Representatives. He said he wanted the files released and literally minutes later voted against having them released.
You know, this is the power turned in on itself and makes itself undone. It is the self-negation that Mr. Hegel talked to us about.
NIMA ALKHORSHID: Michael, when it comes to the issue of competition between the United States and China, it seems that as time goes by, many people, even in the industry in the United States, who are not that much connected with the military-industrial complex or not that much gaining from endless wars, they're somehow criticizing the way that the United States is dealing with Russia, with China, in terms of competition. Here is what the CEO of Ford Motors talked about. He was talking about the competition in the car industry between the United States and China. It's somehow frightening, but here is what he said.
JIM FARLEY (CLIP 2): It's the most humbling thing I've ever seen. 70% of all EVs in the world, electric vehicles, are made in China. They have far superior in-vehicle technology. Huawei and Xiaomi are in every car. They have facial recognition.
INTERVIEWER (CLIP 2): Cell phone technology… is connected to their cell phones.
JIM FARLEY (CLIP 2): Yes, you get in, you don't have to pair your phone. Automatically, your whole digital life is mirrored in the car. You have an AI companion, that you can talk to ChatGPT equivalent in China… all the automatic payment is already there. You can buy movie tickets. It has facial recognition, so it knows who's in which seat and which media you like.
INTERVIEWER (CLIP 2): Why don't Ford cars have that? Would you need to deal with Apple or Google?
JIM FARLEY (CLIP 2): Yeah, because Google and Apple decided not to go in the car business. And even beyond that, the cost, the quality of their vehicles is far superior to what I see in the West. I mean, we are in a global competition with China, and it's not just EVs. And if we lose this, we do not have a future, Ford.
NIMA ALKHORSHID: Go ahead, Michael. Your take on what's going on with car production.
MICHAEL HUDSON: For many decades now, it's been not only the cost, it's the design. The American car companies have made their recovery of profits basically on selling sports utility vehicles, the very large gas-guzzling cars.
When Trump and his predecessors asked "why don't you Japanese import more American cars?" The Japanese explained: Your cars are too big for our streets. They're too big for our parking lots. They take up too much space. And they take up too much gas, and we have to import our gas. Our car buyers want to economize on their gas spending. They want to get a car that they can drive easily and park where they want.
And they [the Japanese] like their own cars better because the Americans have not really aimed their design at what the world wants, but what they are advertising has been able to convince American buyers: if you want to be safe, buy a big sports utility vehicle with a high center of gravity that tends to tip over if you go fast around a curve, buy one of these… and also you'll feel more powerful and it's your identity.
You can imagine what Trump's threat of tariffs on Japan of 35%, maybe 50% even, (including cars) are going to do. Trump's threat against Japan's car exports and also those of South Korea are the largest attack on Japan since the Plaza Accords and the Louvre Accords that followed in the 1980s led to Japan's lost decade of the 1990s. He's trying to block Japanese and Korean exports to the United States, leaving Americans no choice but to buy [American] cars and, of course, no ability to buy the Chinese electric vehicles anymore, largely because of the American support of Musk's company, made in America, employing American labor largely.
Even so, here's the problem with American car manufacturers. Trump has imposed tariffs on copper, steel, and aluminum. This is what cars are made out of. The car companies here have to pay much higher prices for copper and steel and aluminum – for the raw materials out of which cars are made – than foreign countries manufacturers have to pay. And American batteries are much more expensive than those that are designed to power the Chinese cars. So there's no way in which American cars can compete either on price or in design.
How on earth can this problem be cured without absolute control of foreign trade blocking Americans from buying these cars? And of course, given the role of automobiles in the American budget and the role of taking out an automobile loan to buy a car, paying a very high price given the high default rates on American automobile loans, is probably one of the major causes of the American price inflation that you have today.
In sum, Trump's moves against Japan are an attempt to protect an inefficient, uncompetitive automobile industry. Not to mention the Canadian and Mexican affiliates that are producing the parts that go into the cars are making. He's tied the economic hands of car makers behind their backs.
"We're going to tax what you buy, the parts for your cars from Mexico and Canada, and we're going to increase the cost of raw materials to make the cars. And we're not going to let you buy the batteries to power them."
You can imagine how self-destructive this policy is, and I don't see how it can last.
RICHARD WOLFF: Yeah, let's do a very quick economics of why it can't last. When you protect the American economy from the Chinese, whether you use the electric vehicles or you use solar panels or you use advanced AI equipment and so on, it's always the same story. You protect it here by excluding the Chinese. What does that mean? It means that where the Chinese have broken into the American market, it is because they produce either a better quality or offer a lower price or both.
That's it. There's no magic. No one's holding a gun to anybody's head. That's how and why, you know, the toaster you have at home is made in China and on and on and on. Because that's a cheaper, better toaster than anybody else makes, which is why Walmart or Target or any of the others has it for sale.
Now let's follow the economics. If you exclude that, you make Americans buy poorer quality or pay a higher price. That's not good. That's bad for the consumer, but no one really cares about them except in words.
Let's turn next to American businesses, or for that matter, to any businesses operating here in America. They have to buy inputs, you know, raw materials, machines, parts, whatever it is. And where are they going to buy them from? They're not going to get the good, cheap ones from abroad because the government of the United States has put a tariff. That's the point of the tariff.
So the American business will not be able to buy its raw material or its parts or its inputs. It will not be able to buy from China because we're in this competition, which means it can't get the cheapest or the best quality.
But of course, the competitors of the United States located in Canada or Mexico or anywhere else in the world are able to go to China and are able to buy at the lower price the better quality. So over time, America is shooting itself in the foot competitively. It's losing and not by the hand of anybody else, but by its own. It is following a policy that may be good for the posturing of Mr. Trump.
"I'm bringing industry back." No, you aren't. The industries aren't coming, and they're not coming because of what I just said: namely, in the long run, it makes no sense to come back here because you'll have to not be able to buy the cheapest input or the highest quality. Why would you move to a country which promises you competitive disadvantages? That's why American companies went abroad in the first place because it was more profitable. You are giving them a reason not to come back.
Why this is so difficult, I assume, is not because the idea is complex (it isn't) but because of the noise from the Trump administration, sadly not contradicted by the vast majority of Democrats and their spokespersons. So it is allowed to give this man, Trump, the opportunity to posture as if he was doing good for the American economy. He isn't. It may be bad in any case. I'm not blaming him for it. But what he's doing is really nonsensical self-promotion and making the problem worse.
MICHAEL HUDSON: Well, only one technical question, Richard. How can you shoot yourself in the foot if you first shot yourself in the brain? It doesn't work that way.
RICHARD WOLFF: I mean, it's not, this is not complicated. There are things in economics that are complicated. This isn't one of them.
It's really sad. It's almost as if we had a person who was president who said, I'm going to solve our economic problems. I'm going to erect a six-foot-tall tower and I'm going to hang yellow streamers and I'm going to have an enormous amount of whipped cream put on top. And we would listen to such a person and we would all shake our heads. How demented, how sad for him to imagine that a real problem, the declining American economic system, could be managed by this fantasy. Well, I got to tell you, with all my fancy economic degrees, I'm looking at a program that's ridiculous.
MICHAEL HUDSON: I wonder how this will affect the negotiations between the United States and Europe right now. Because European companies also not only wanted to export cars to the United States, as did South Africa that has heavy tariffs, but Trump is pressing them to set up American production plants, as many German car companies have done.
But if they set up an auto production plant in America, how can they make a profit given what we've just discussed about their increased costs? This action and the tariff policy by Trump is essentially splitting the American economy off from the rest of the world and isolating it, as we've discussed before.
RICHARD WOLFF: Yeah. And if you look, Nima's choice of that clip is very, very smart, right? To have the Ford family, which is really the family out of which the American car industry grew, right? Henry Ford, way back when, at the beginning of the 20th century, creates the assembly line and makes it possible to mass produce this odd thing, a self-driving automobile instead of a horse and a carriage.
Here you have the latest generation, a young man who you would expect, if he were like Trump, would be beating the drum of nationalism, is answering an honest question by saying, you know, we don't produce the best cars. We don't have the best technology. We can't compete.
I mean, after you listen to him describe what the Chinese car on the average can do… I know enough about American cars. They can't do those things. And they're more expensive. And we are completely lost in the electric vehicle market. Wow. From the mouth of Mr. Ford.
You know what that suggests to me as an observer? That the car industry in this country is finished. Cars, whatever their role in the world economy in the years ahead, are going to be made much better elsewhere.
Maybe the image of the United States is that we're so important, even though we are, let me remind everyone, four and a half percent of the world's people live in the United States. Four and a half, we're going to have an economy all by ourselves.
You know what that means? We're going to be the oddity that now you can see on television when a camera crew goes deep into the Amazonian jungle or deep somewhere else and discovers a community that has been living the same way for 5,000 years. We're going to be one of those.
The rest of the world is going to send tourists here. That'll be our new economic boom, the tourism to look at, look at these ancient automobiles these people still have. You know, I'm not being facetious. That's where we're going with this policy.
MICHAEL HUDSON: Well, so much for the materialist approach to foreign policy, thinking that nations are going to act in their own self-interest.
RICHARD WOLFF: Well, you know, "what your self-interest is" has never been uniformly or universally agreed. The sentence, if you think about Hegel, takes you in all the different directions. The tragedy of Europe is somehow even more poignant for me than the American.
To be transparent, I was born and lived all my life in the United States, but my parents were refugees. They came from Europe. And so I straddle in the sense that my parents are European and I'm an American and I have children and they're American and all that. But Europe was once the center of the known world because it did the knowing and it was the center.
And, you know, it carved up the whole world. I remember once studying the meetings in Berlin in 1884 where all the European countries had a big map of Africa and made lines with markers. You get this, I get that, having nothing to do with the billion people that lived in Africa at the time. Extraordinary, really extraordinary.
It's all gone. They can't unify, so they don't even have the power that a unified unit might have. So they don't even have that. They're pinched by the Chinese and Russians on one end, by the Americans on the other.
Israel and Gaza stand out as the final desperate attempt to hold on to the colonial idea project. Look at the price being paid. The lesson to the world: if you ever wanted an example of why you should get rid of colonialism, it's here.
So the Europeans, they face nothing but defeat after defeat after defeat. And you know, they deny it and they pretend otherwise. You know, when the Queen of England dies and a new king [is enthroned], they actually act as if anybody cared, as if the world would be interested in the cortege that takes the Queen to her final resting place. This is a theater piece for ancient times, held on to by people who have nothing else.
The catastrophe here is real. And I understand the danger. Societies traumatized by anything can behave in a horrible way.
The German working class, as I've tried to write recently, was traumatized. It was led to believe in the 19th century that it was going to inherit the world, that the British Empire was fading, and Deutsche Reich, the German Empire, would replace it. And they were led to believe it. And German economic development in the 19th century was like America. Those were the two up-and-coming contenders to replace the British Empire.
Then, in a very short time, the German working class was destroyed by being defeated in World War I. Four years, five years later, they had the worst inflation in modern history, wiped out their savings. And four years after that, the Great Depression of 1929 hit.
In a short period, they were traumatized by three totally destructive events. No wonder they went for Adolf Hitler. That's what happens if you are traumatized. Look what happened to people in Cambodia after the United States bombed them forever. They went to Pol Pot, and what was that? You traumatize a population. Too many defeats, too many declines, too much absence of any change, and you can get very bizarre activity. And part of the bizarreness of the Trump government is that.
Photo by Pawel Czerwinski on Unsplash
Transcript: Ton
Coordination: Hudsearch