Tariffs: Populism’s Price Tag

A global reserve fiat currency, unanchored by a hard money standard, inevitably leads to trade imbalances where powerful nations exchange their currency for goods, resulting in the hollowing out of their manufacturing base and increased financialization that widens wealth disparities. This dynamic ultimately triggers democratic pushback through populist policies like tariffs, which, while disrupting free market principles and global economic efficiency, serve immediate political purposes by shifting economic costs to foreign producers and domestic asset owners rather than workers. This political intrusion into economic systems mirrors Keynesian principles in prioritizing political expediency over pure economic fundamentals, regardless of whether such measures maximize total economic benefit in the long run.

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