I have questions.
I have some pretty bold ideas for dealing with the current economy, which is being set up to collapse to further build the wealth for the United States, as the Rest of the World (RoW) scrambles so as not to lose access to the world's largest economy. This needy and clingy behaviour is what the US government is hoping for, to continue controlling the relationship, like an abusive partner. The RoW is fighting to stay in the relationship, rather than letting go of it and building a healthy relationship elsewhere.
The first question I have concerns the tariffs on software. If a car is built in the US it isn't taxed, but if it is using parts that come from outside of the US, those parts incur the tax. This pushes up the price. Similarly, a product like an iPhone that is produced entirely outside of the US and mostly in China, will incur the full tax. However, a company like Microsoft sells a largely software product, but their revenue in the US alone is 260 billion. However, 10% of their staff (mostly devs and support) are from India alone. This means that "part of their product" is built outside of the US and therefore should incur the tax. This Indian component would add 26 billion to the cost of Microsoft products in the US. Move those jobs back to the US, and the cost goes up even more. The impact on business costs across the tech stack is extreme.
So, what happens to these tariffs?
Amazon has 45,000 employees in India. They aren't all developers, but what percentage of their platform is developed outside of the US? What about Meta, Google? However for those last two, the majority of their revenue comes from ads, so they aren't selling that many "products". But my point is, that there are industries that happen to be the world's largest companies, that are conveniently "falling between the cracks" of the tariffs, and these companies happen to be those that were almost uniformly, bending the knee to Trump prior to the tariffs going live.
Coincidence?
Software and service aside, as I was saying above, this exhibition of neediness of the RoW is unnecessary, except in order to maintain the status quo, and amplify the problems of the current system. Rather than doing this, the EU for instance could use the good relations it has with China and India for production, to position itself as the largest economy in the world and surpass the US. The US has underestimated what the RoW is able to design and produce, and over estimated the appetite the US has for US-made products.
Here is a little story.
Back in the 80s, Finns would travel to the USSR as "vodka tourists" on buses and when they would get off the bus, they would be swamped by Russians trying to buy their belongings - right down to tubes of toothpaste. But cultural items like international vinyl albums and tapes were highly sought after and highly paid for. This was because behind the Iron Curtain, they only had access to Soviet products - and no one wanted that. Conditions weren't good for the people, as the central authority took from the citizens to keep power and control, and a military.
My point is - no one wants to drive a Lada. And anyone who has driven a Lada, will understand why. However, while the US has a long history of car manufacturing, there is still an appetite for for foreign-made cars. In 2024, over 55% of cars sold in the US were foreign. Not only that, the majority of the US cars sold were the large truck and 4WD types. The normal passenger cars and many of the SUVs, are from Asia. And the luxury cars are German.
The thing that the US doesn't yet understand though, is that the RoW doesn't really need anything from the US. Sure, you can argue for the military presence, but that is only possible because of the world's largest economy being financed by external countries that want access to the market. If the European Union for instance said that it would do the same as the US and run a large deficit economy that gave people the purchasing power to consume, there is plenty of products and services that are found within the borders or with allied countries that people would choose over American products. Not many Europeans dream of driving a Mustang - they want a BMW, Audi, or a Mercedes. They want quality.
Where the US has a major advantage is in the digital products and services, but the interesting thing about those is, a lot of the production and support isn't coming from the US anyway. And, it is not like Europe, China, Japan and India don't have any pedigree for software and technology. The other area is military development, but again - the pedigree potential is there.
for the economy to distribute in a more healthy way for the majority of the global population, the current conditions have to collapse because they are continually centralising control into what is predominantly US hands. This might be good for the US government and the top corporations, but for the US people, this will continually encroach on whatever freedoms they have left, as evidenced by the activities of the current government.
Does the average America really want the rich of America to become richer?
I don't think so. A strong US economy doesn't mean a strong US culture of wellbeing and thriving of the people - quite the opposite these days. The people in the US should be rebelling hard against this further centralisation of wealth and power into fewer hands, yet they are split in two minds, because most still have been conditioned to believe that strong economy is good for the people.
It is only good, when distribution of wealth is broad.
These tariffs reduce distribution of wealth and concentrate it further, by taxing citizens under the false belief that it will generate jobs and wellbeing locally. But, the US still won't be able to produce most things cheaper than where they are produced now, even with the tax on top, so it is just the US government reaching deeper into citizen pockets and taking more.
It really is incredible to see working-class people celebrating the Trump administration, as the majority are going to be punished, with no future gain. This initial cost and economic pain isn't an investment into the wealth of Americans, it is Americans investing into the growing wealth of the few. It is a massive money, power and control grab, and the more people try to maintain the status quo, the faster the money will pour into the top pinnacle of an ever heightening distribution curve, where more and more people move toward the poverty end, while fewer and fewer hold the majority of wealth.
In my opinion, the American people need to wake up and see this for what it is, and the people of the Rest of the World need to do the same. The distribution of value needs a massive change, and this is an opportunity to start the process of decentralising resources, be redistributing the market demand shares. The US shouldn't be the world's largest market, because they aren't the world's largest population. This fact alone shows the inequality of the marketplace. The RoW shouldn't by looking to keep selling to the US, they should be looking at how to build the RoW so that the US is no more an attractive market than Germany, France, or Indonesia.
Healthy distribution of wealth requires the ability for a wider distribution to consume. Yes, it might be at a lower level, and the products and services might seem slightly more inferior to begin with in soma capacity, but that wider market generates the incentive for more businesses to grow, more opportunities to innovate, and for control to distribute more evenly, so that there is less chance of scaled corruption. And make no mistake, what is going on now is corruption, including the narrative being sold to Americans that the rest of the world taking advantage of them. It is not the case, it is the polar opposite. That is how the US has become the world's largest consumer economy to begin with.
But, this isn't an attack on American people, because they have seemingly been conditioned to believe that the US is indeed the best at everything and everyone is envious. In some cases, maybe this is the case, but the epitome of life isn't driving an oversized truck around places where they don't even fit into standard carparks. Wellbeing isn't being able to eat yourself into obesity at a low cost, nor is it having the opportunity to become addicted to prescription drugs to numb the pain of life. And the Rest of the World needs to stop relying on a market that is literally eating itself to death, and start building many markets for stability and the wellbeing of people.
Having the US as a single market that everyone is looking to maintain, is a massive risk, and it puts even more risk in the economy because it ties all of the banking and financial mechanisms together to that one failure point. This failure point controlled by a centralised authority, means that it is a massive mechanism for manipulation, which we are seeing now, but that isn't for the benefit of the people of the US, it is for the gain of the wealthy in the US. The 0.1% - or less.
Wake up America - and wake up the Rest of the World.
Taraz
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