March 30, 2026
Opinions on Donald Trump range widely. Is he a despot aiming at dictatorship, or is he a forceful and effective leader, beset by victims of Trump Derangement Syndrome ? Whatever you may think of him, one fact should not be controversial. He constantly changes his policies, veering from one position to another as the spirit moves him.
He is what Ayn Rand called a "whim worshiper." As she said in 1964, "What does it mean, to act on whim ? It means that a man acts like a zombie, without any knowledge of what he deals with, what he wants to accomplish, or what motivates him. It means that a man acts in a state of temporary insanity. Is this what you call juicy or colorful ? I think the only juice that can come out of such a situation is blood. To act against the facts of reality can result only in destruction."
Our economy depends on investors who make sound business decisions. How can they do so, when they are always in doubt about the effect of Trump's policies on the economy ? The great economist Robert Higgs has aptly called this state of affairs "regime uncertainty." In discussing the failure of the American economy to recover from the Great Depression, Higgs wrote that "I shall argue here that the economy remained in the depression as late as 1940 because private investment had never recovered sufficiently after its collapse during the Great Contraction. During the war, private investment fell to much lower levels, and the federal government itself became the chief investor, directing investment into building up the nation's capacity to produce munitions. After the war ended, private investment, for the first time since the 1920s, rose to and remained at levels sufficient to create a prosperous and normally growing economy. I shall argue further that the insufficiency of private investment from 1935 through 1940 reflected a pervasive uncertainty among investors about the security of their property rights in their capital and its prospective returns. This uncertainty arose, especially though not exclusively, from the character of federal government actions and the nature of the Roosevelt administration during the so-called Second New Deal from 1935 to 1940. Starting in 1940 the makeup of FDR's administration changed substantially as probusiness men began to replace dedicated New Dealers in many positions, including most of the offices of high authority in the war-command economy. Congressional changes in the elections from 1938 onward reinforced the movement away from the New Deal, strengthening the so-called Conservative Coalition. From 1941 through 1945, however, the less hostile character of the administration expressed itself in decisions about how to manage the war command economy; therefore, with private investment replaced by direct government investment, the diminished fears of investors could not give rise to a revival of private investment spending. In 1945 the death of Roosevelt and the succession of Harry S Truman and his administration completed the shift from a political regime investors perceived as full of uncertainty to one in which they felt much more confident about the security of their private property rights. Sufficiently sanguine for the first time since 1929 and finally freed from government restraints on private investment for civilian purposes, investors set in motion the postwar investment boom that powered the economy's return to sustained prosperity notwithstanding the drastic reduction of federal government spending from its extraordinarily elevated wartime levels."
Let's look at Trump's tariff policies, if they can be called that. As I said about a year ago, the last excuse that diehard defenders of President Trump's tariff policies have advanced now lies in ruins. Trump had put in place exorbitant tariffs, these defenders acknowledged, but this was just a negotiating tactic, to get the targeted countries to lower their own tariffs on American goods. But if that is his aim, he is pursuing it in a blunderbuss fashion. As Paul Craig Roberts, a strong defender of tariffs, says: "Trump's position on tariffs is problematical for many reasons. First, let me say that historically tariffs were a legislative issue. The Morrill Tariff was voted by Congress. The Smith-Hawley Tariff was voted by Congress. How is it that the executive is imposing tariffs ? Assuming the president has this authority and assuming that we don't have tariffs on others but others have tariffs on the US, the way to success is for Trump to sit down with the offenders and explain that the situation is not working for us. How do they propose to rectify the inequality ? This would have given Trump the upper hand. Instead, he is portrayed as issuing threats not only to China but also to American allies. Retaliation has become the game."
Ron Unz, who is a master of statistical analysis. offers the best account of where Trump has gone wrong. Unz, like Roberts, isn't opposed to protective tariffs, but he explains fully Trump's irrationality. Trump has confused trade deficits with tariffs, leading him to absurd figures: "For example, our factually-challenged president declared that his new tariff rates were 'retaliatory' and indeed the first column of the chart he displayed showed the foreign tariffs that had allegedly provoked his retaliation, but everyone quickly noticed that these figures were total nonsense. Switzerland hardly imposes a 61 percent tariff on American goods, nor does Vietnam maintain a 90 percent tariff rate against our products. Instead these figures were merely calculated using a formula based upon America's existing trade deficit in goods, which was something entirely different. So if another country sold us more goods than they themselves bought, that was described as due to a tariff even if no such tariff actually existed. In a perfect example of this absurdity, Trump incorrectly claimed that the penguins of Norfolk Island near Antarctica maintained huge barriers against American products, with his counter-vailing tariff of 29 percent aimed at punishing those waterfowl for their unfair trading practices. Obviously, Trump's claims justifying his new tariff rates were totally ridiculous, but they were actually ridiculous in several different ways. Suppose that this weren't the case, and our trade in goods with the rest of the rest of the world were totally in balance, just as Trump wished it to be. Under those circumstances, we would naturally have trade surpluses with some countries and trade deficits with others, with all of the different figures netting out to zero. But according to Trump's framework, those countries with which we had a trade surplus would still be hit with a new 10 percent tariff while those with which we had a deficit would suffer much larger tariffs, and these would then be jacked up if those countries decided to retaliate. So the apparent goal and endpoint of Trump's policies would be to sharply reduce or even eliminate all our trade with the rest of the world. Thus, Trump was self-sanctioning America much like he had sought to do against Iran, Russia, North Korea, and all the other countries he and previous administrations had regarded with considerable hostility. Yet oddly enough Trump seemed to believe that cutting off the global trade of countries he didn't like would severely hurt them, but cutting off our own trade would strengthen our country and benefit the American people."
Now let's turn to Trump's barbarous and unconstitutional war against Iran. Once more, you never know what Trump has in mind. Ron Unz again hits the nail on the head: "Our war against Iran is now three weeks old and the Trump Administration has apparently reached the point of total desperation. The best proof of this came late Friday when Treasury Secretary Scott Bessent announced that America would assist Iran in obtaining a massive inflow of additional funding for its war machine, thereby supporting Iranian efforts to kill American servicemen. Although reported in the New York Times, few have apparently noticed this bizarre development, or at least it has hardly received the attention it warranted. The backstory was ironic. Soon after winning the White House in 2016, Trump tore up the existing American nuclear agreement with Iran, an agreement that imposed strict international monitoring to guarantee that the enrichment activities were solely for civilian purposes and could not be used to produce a nuclear weapon. Reneging upon the solemn treaty that our country had signed, Trump instead began imposing severe economic sanctions, intending to strangle Iran's economy and prevent anyone from buying its oil.
"Given America's control over the existing dollar-based world financial system, this effort was largely successful and over the years these sanctions were steadily tightened, greatly reducing the oil sales that were the main source of Iran's foreign exchange income. Eventually, nearly all of Iran's oil was going to China while the only Chinese companies willing to buy it were refiners so small that they were not much impacted by American financial retaliation. So during 2025 Trump boasted that he was strangling Iran, and to a considerable extent this was true. With Iran unable to sell much of its oil, the surplus was parked at sea in leased oil tankers until a buyer could somehow be found. But this economic strangulation eventually proved too slow a process for our impatient president, and at the end of last month, he joined Israel in launching an all-out military attack on Iran, killing its top leadership and beginning a massive bombardment campaign that he was confident would end the war in total victory within just a few days.
"For decades, the Iranians had warned that if their country were attacked by America, they would retaliate by closing the Strait of Hormuz to the tanker traffic of the Persian Gulf, and for decades all our intelligence and military analysts had confirmed that they would probably do exactly that. The loss of those energy supplies would produce global economic devastation, with America suffering along with everyone else. Therefore, all previous presidents had firmly resisted massive political pressure from Israel and the Israel Lobby for an American attack on Iran.
"Trump, however, was made of sterner stuff. Although he had been warned of the dire global consequences of an Iranian blockade of that vital waterway, he was confident that the risks were negligible. After all, he and his Israeli partners would quickly win the war, forcing a total Iranian surrender within just a few days, long before any loss of oil traffic would have any impact. Unfortunately for his strategy, such brash optimism proved mistaken, and after the Iranians closed the Strait of Hormuz to most oil shipments, the loss of supply quickly spiked oil prices to over $100 per barrel, inflicting considerable damage on the world economy. There were growing prospects of a severe global recession or worse. Although Trump had never considered offering sanctions relief to Iran during peacetime, now that Iranians were killing Americans in wartime he did so, with his desperate need to put additional oil on the world markets overriding all other considerations. Thus Trump officials announced late on Friday that they were lifting all existing sanctions on Iran's unsold oil, and urging their friends and allies to buy it, paying twice the original Iranian asking price.
"Even this step was not sufficiently contradictory for the Trump Administration. In addition, thousands of American marines and their amphibious assault ships were dispatched to the region, with suggestions that they would be used to seize Kharg Island, the main Iranian site for the loading of oil. The declared intent was to eliminate such oil shipments, thereby greatly reducing Iranian revenue. But oddly enough, that news story ran on the very same day as the other report that Bessent had lifted all sanctions on Iranian oil. So even as Trump's Pentagon was seeking to minimize Iranian oil sales, Trump's Treasury was simultaneously seeking to maximize them, a rather strange juxtaposition of polar-opposite policies."
Let's do everything we can to encourage a return to a constant policy of limited government at home and nonintervention abroad!