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Atlantic
12 hours ago
- Business
- Atlantic
A Reboot for Capitalism's Operating System
The world economy is like a supercomputer that churns through trillions of calculations of prices and quantities, and spits out information on incomes, wealth, profits, and jobs. This is effectively how capitalism works—as a highly efficient information-processing system. To do that job, like any computer, capitalism runs on both hardware and software. The hardware is the markets, institutions, and regulatory regimes that make up the economy. The software is the governing economic ideas of the day—in essence, what society has decided the economy is for. Most of the time, the computer works quite well. But now and then, it crashes. Usually when that happens, the world economy just needs a software update—new ideas to address new problems. But sometimes it needs a major hardware modification as well. We are in one of those Control-Alt-Delete moments. Against the background of tariff wars, market angst about U.S. debt, tumbling consumer confidence, and a weakening dollar watched over by a heedless administration, globalization's American-led era of free trade and open societies is coming to a close. The global economy is getting a hardware refit and trying out a new operating system—in effect, a full reboot, the likes of which we have not seen in nearly a century. To understand why this is happening and what it means, we need to abandon any illusion that the worldwide turn toward right-wing populism and economic nationalism is merely a temporary error, and that everything will eventually snap back to the relatively benign world of the late 1990s and early 2000s. The computer's architecture is changing, but how this next version of capitalism will work depends a great deal on the software we choose to run on it. The governing ideas about the economy are in flux: We have to decide what the new economic order looks like and whose interests it will serve. The last such force-quit, hard-restart period was in the 1930s. In the United States, the huge liquidity crunch caused by the 1929 Wall Street crash combined with the Smoot-Hawley Tariff Act of 1930 to kill commercial activity and trigger the Great Depression. Bank failures swiftly turned into a mass failure of firms and industries; wages tumbled and unemployment shot up, in some areas to a quarter of the workforce. Despite the state interventions of Franklin D. Roosevelt's New Deal program, the economic situation stabilized and returned to sustained growth only in the '40s, when wartime re-armament delivered a huge industrial stimulus. The computer built for the postwar period was solving to avoid a repeat of the '30s. The software update was a new governing idea of full employment. Achieving that aim as the central raison d'être of the economy also entailed several hardware modifications. One was a policy of forcing wealth owners to use their capital locally by limiting their ability to move it out of the country. To maintain their profits, they were obliged to invest in technology that would increase productivity. In this virtuous cycle, high productivity allowed for high wages, which the state could then tax to fund social transfers. Combined with the government-spending power of revenues raised by high marginal taxes, America's welfare state was born. Labor unions were seen more as partners in business enterprises, and political parties needed to appeal to the median, middle-income voter. These changes produced a political system in which the two main parties competed over a centrist consensus so bipartisan that people struggled to see the difference between Democrats and Republicans. The New Deal did indeed avoid a repeat of the '30s, but its software had a bug. If full employment meant running the economy hot to keep unemployment down, then eventually employers' ability to keep their profits up by augmenting productivity would fail as workers' demand for higher wages outstripped firms' ability to pay them. By the mid-'70s, profits were falling as wages and inflation rose, so the U.S. investor class reached for the reboot switch. Holders of capital founded political-action committees, funded think tanks and media outlets to promote free enterprise, and helped get Ronald Reagan elected in 1980. Reagan busted unions and deregulated markets, accelerating the movement of capital from union strongholds to 'right to work' states, which was effectively an onshore tryout of offshoring. Simultaneously, the Federal Reserve under Paul Volcker raised interest rates to almost 20 percent to squeeze inflation, a measure that induced a harsh recession, which disciplined labor further by raising unemployment. As all of that implies, full employment ceased to be the governing economic idea. The software rewrite of this era instead made price stability, capital mobility, and the restoration of profits via globalization the new priorities. The hardware modification was to make central banks more independent—the better to enforce price stability and enable the recovery of profits. These new priorities were justified by Margaret Thatcher's famous nostrum that 'there is no alternative.' This reboot has come to be known as neoliberalism. The computer was humming along again when I arrived from Scotland to attend graduate school in New York in the summer of 1992. The U.S. had entered a period that Ben Bernanke, then a Federal Reserve governor (and later Fed chair), called the 'Great Moderation.' Globalization was good; finance was the future. Central banks had delivered sustainable prosperity, and the investor class saw its profits restored on a transnational scale. Once again, however, the system had a bug. The increase in profitability came not only as a result of improved domestic productivity but also at the expense of once-stable industrial regions of the U.S., as jobs, skills, and capital flowed out. Meanwhile, the authorities had presided over the deregulation of financial markets, which supplied the economy with copious credit. But one effect of this credit was to mask a chronic lack of wage growth and a rising level of inequality. That turned out to be a major hardware issue: Neoliberalism's financialized solutions to economic problems became liabilities when the next crash came, in 2008, as a tsunami of credit became an earthquake of debt. The hardware modification of the era—independent central banks—saved the system with colossal bailouts of the private sector, paid for by the public sector in the form of ever greater debt and more stringent fiscal policies. This liquidity dump enabled the economy to stagger on through the slowest-ever recovery from a recession—but only by pushing the bulk of the costs of those bailouts onto those least able to bear them. Signs of profound public disaffection in Western countries started to show in 2016: first with the Brexit vote in the United Kingdom, then with Donald Trump's rise in the U.S. Trump has acted as a catalyst for the next reboot. His hostile takeover of the Republican Party was leveraged by a new, more working-class electoral coalition based on a populist politics of resentment. His antipathy toward China may lack analysis, but by articulating a sense that American workers had lost out in the neoliberal era, it gave voice to authentic grievance. Trump's chaotic first term made only limited progress in forcing another reboot, but his second term seems likely to foreclose on the Biden administration's interim solution of keeping the neoliberal system running with a limited New Deal–like reindustrialization in new sectors such as renewable energy. The Inflation Reduction Act was a significant reinvention of industrial policy, something not seen for decades outside a national-security context, but Trump is abandoning this sort of intervention. Instead, he has chosen tariffs as his singular tool for reshoring industry. To the extent that the Trumpian approach coheres, the economy's new goal is to benefit native workers by restoring carbon-heavy industrial jobs while removing immigrants from the labor pool and encouraging women to have more children and become homemakers. This is not so much the building of a new computer system as the retrofitting of several old ones—a version of what a critic of Thatcherism once called ' regressive modernisation.' The MAGA economic ideal derives from a blend of the 1950s, which saw a huge expansion of manufacturing jobs for men, and the '40s, when women were pushed out of the wartime jobs and back into the home, and immigration was tightly restricted. This boost for the native labor force is in turn yoked to a 19th-century, mercantilist 'spheres of influence' foreign policy. This hodgepodge of historical impulses speaks to the unsettled nature of Trumponomics. No new economic order is discernible, because the governing idea is still contested. The national-conservative movement, which seeks to rebrand the GOP as a workers' party, has one vision, but other forces are also trying to shape this moment. The 'Dark Enlightenment' wing of the tech sector is a player, too. Overinvested in AI and keen to grab government funding that was earmarked for elite research universities, the Silicon Valley billionaires imagine an economy that runs not as a return to hard-hat industry's glorious past but as a posthuman future of automation and space exploration. The problem with such projects is that we cannot go back, any more than we can leap into the future; we can live only in the present. The populist-right reset will fail because tariffs may spur some reindustrialization, but robots will be the main producers, not working-class men on an assembly line. And little suggests that most women will relish the return to hearth and home that is planned for them. The techno-futurist update has nothing to offer the great mass of humanity and would benefit only the tech lords most invested in its realization. So we seem to be stuck, which is why this moment is so perplexing. The system upgrade is pending: The right is offering its regressive modernization as the update. The left has yet to figure out which one of three paths it wants to take. One possibility is to stay put with the gerontocracy of the Democratic Party and wait for Trumpism to implode. That might happen, and the Democrats' current position as the party of the institutionalist status quo makes this the most likely path. But this will be a losing proposition if no reversion to the mean of the pre-MAGA American politics occurs. The effort by Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders to rally an anti-oligarchy movement advocates for a second option, of left-wing populism. But whether this appeals to young men who have been drawn to Trump, as well as young women who poll as more progressive, and can create a broad-enough coalition remains to be seen. A third approach is the 'abundance' agenda, promoted recently by Ezra Klein and The Atlantic 's Derek Thompson, which proposes a progressive political program based on lower-regulation, pro-growth policies as a spark for renewed economic growth—though critics on the left accuse this approach of failing to confront corporate power. To develop an alternative to the regressive modernization underpinning Trump's reelection, the left must come up with a governing economic idea that can compete. Technocratic fixes of the old system look very unlikely to inspire a broad-enough coalition to defeat the potent, if unstable, electoral alliance that reelected Trump. The most promising avenue—one that could address the needs of millions of Americans who feel shut out of growth and prosperity and alienated from America's governing elite—might be a fusion of AOC/Bernie populism with a more political, less technocratic version of abundance. Regardless of whether such a project can materialize, we have to accept that a transformation is under way. A new economic order is forming—which means that it is not yet fixed and can still be shaped. But time is running out. As jumbled as the regressive modernization is, it could win the day if we do not come up with a different governing idea of what the economy is and whom it is for. And we need enough people in our democracy to agree that this new purpose is the right one. The ideas are there to be found. They just need politicians with the courage to try them.
Yahoo
12 hours ago
- General
- Yahoo
Nature: Clyde Gosnell and Omie Warner are extraordinary conservationists
The year 1930 brought momentous impacts for conservation in Ohio. The Great Depression was setting in, but the dates of Jan. 19 and June 24 launched two people, who would eventually have an outsized impact on the stewardship of the Buckeye State's natural resources. Louise 'Omie' Warner was born on the earlier date, and Clyde Gosnell the latter date. It would be some time before their paths would cross, but they'd eventually become a power couple in conservation. Warner was married to Dr. Jack Warner until his death in 1996, and Gosnell was married for 44 years to his first wife, Sue. When Gosnell and Warner met, there was an instant attraction, and they married in 2001. They remain deeply in love to this day. Even at the age of 94, both are hearty, hale, creative thinkers and whirlwinds of ideas and activities. Both became interested in nature as kids, but career paths followed different trajectories. Warner became an anesthesiologist, and Gosnell an architect. Warner had a long and distinguished medical career, and Gosnell left a big architectural imprint on Columbus. Nature: Eastern tent caterpillar nests can be seen throughout Ohio He specialized in hospital design and had major roles in the design of Grant, Mount Carmel and St. Ann's hospitals — and about 45 other medical centers. He also designed parts of the Pontifical College Josephinum, but undoubtedly, his best-known work was the iconic Christopher Inn on East Broad Street. Warner did not let the grass grow under her feet, even while actively working. Her first husband had purchased 236 acres of land in Delaware County in 1953. He decided to preserve the wetlands and woodlands and use part of the property for sustainable agriculture. Inspired by their daughter Gale's vision, the two turned the property into the Stratford Ecological Center, an educational showcase of the best agricultural practices. Woodlands on the property host scads of breeding salamanders and other wildlife. Stratford opened in 1993 and hosts around 16,000 visitors annually — over half of them children. Because of her contributions, Warner was inducted into the Delaware County Agricultural Hall of Fame. Prior to his architectural career, Gosnell enlisted in the army and spent 15 months on the ground during the Korean War. At one point, his unit received airstrike support from two young Air Force aviators who would later achieve fame as astronauts: Buzz Aldrin and John Glenn. Much later, inspired by astronomer Brad Hoehne, Gosnell and Warner worked tirelessly to establish the John Glenn Astronomy Park at Old Man's Cave in Hocking Hills, which opened in 2018. Astronomical education was by no means their only contribution to the betterment of Hocking Hills State Park, which sees over 4 million visitors annually. After much leg work, along with naturalist Paul Knoop, they convinced both the Ohio Departments of Natural Resources and Transportation to reroute State Route 664, which passes near Old Man's Cave. The former alignment forced visitors to cross the busy road near a blind corner, creating a dangerous situation. The new risk-free reroute was completed in 2011, and millions of people are the beneficiaries. Many people, especially birders, appreciate the massive prairie/wetland complex at Battelle Darby Metro Park in southwest Franklin County. Nature: Orchids grow spectacularly in Ohio Gosnell, along with his buddy Jack McDowell, visited relict prairies to collect the seed that spawned the prairie, which now harbors bell's vireos, blue grosbeaks, sedge wrens, northern harriers, short-eared owls and much more. Consummate naturalists and born educators, Gosnell and Warner have long hosted Trillium Fest at their Mathias Grove property on the northern fringe of Hocking Hills. Thousands of people have attended the mid-April event over the many years they've opened their property. The lure is an awe-inspiring forest blanketed with red trillium and large-flowered trillium — the latter is Ohio's state wildflower. Gosnell also expresses the beauty of nature through his art. He got interested in painting decades ago and has produced scores of works. Several years ago, he gifted me a beautiful watercolor of darters in Big Darby Creek. It features four species of the little perch family members, including the rare Tippecanoe darter. The eye-catching painting owns space on a prominent wall of my home. This brief column can only cover the tip of the iceberg regarding Gosnell and Warner's accomplishments. The numerous awards they've received over the years reflect their many achievements. Insatiable intellectual curiosity, out-of-the-box thinking and a tireless work ethic are rare attributes. Combine them all in one person and you've got a one in a million. Put two one in a millions together and you've got Gosnell and Warner. We owe a huge debt of gratitude to this power couple, whose work will benefit people for generations to come. Naturalist Jim McCormac writes a column for The Dispatch on the first and third Sundays of the month. He also writes about nature at jim This article originally appeared on The Columbus Dispatch: Nature: Clyde Gosnell and Omie Warner are top conservationists
The Mainichi
a day ago
- Business
- The Mainichi
U.S. tariff rate hits historic level of 25.9%: Japan trade report
TOKYO (Kyodo) -- The effective U.S. tariff rate on all imports rose to as high as 25.9 percent under President Donald Trump, surpassing levels not seen since the protectionist policies of the Great Depression, the Japanese government's annual trade report showed Friday. The U.S. tariff measures as of early April, including an increase in the levies on China to 145 percent, reached a "historic scale," the Japanese trade ministry said, adding that frequent changes in Trump's trade policy are creating "heightened uncertainty." According to the ministry, the effective tariff rate -- the actual rate applied to imports -- was 19.8 percent in 1933, after the United States enacted the Smoot-Hawley Tariff Act in 1930 to protect American businesses and farmers from foreign competition by significantly raising tariffs on imported goods. The report by the Japanese Ministry of Economy, Trade and Industry cited data from the International Monetary Fund as a reference. The April rate also reflected new tariffs on the auto sector. The U.S. effective tariff rate has since declined after Washington and Beijing agreed in May to roll back a significant portion of each other's steep tariffs, marking a de-escalation of their tit-for-tat trade war. Japan's simple average tariff rate stood at 3.7 percent in 2023, according to data from the World Trade Organization.
Buzz Feed
a day ago
- Business
- Buzz Feed
9 Affordable Foods Safe From Trump's Tariff Hikes
Trump's new reciprocal tariff plan has pushed the average US tariff rate to about 15.8% — the highest it's been in almost a hundred years, according to Yale's US economic research center. We haven't seen a rate with a percentage sign that high since the Great Depression. The fallout from Trump's widespread tariff announcement on April 2 (which he called 'Liberation Day') has left many Americans feeling the same way I like my eggs: soft scrambled. Soft, because we feel helpless against the tariff-powers-that-be. Scrambled, because we're spinning, trying to figure out how these massive import taxes are going to mess with our daily lives. Between the dramatic rise and fall of egg prices, the spikes in cost for items we love like potato chips and matcha, and the ever-changing news around global tariffs, grocery shopping in 2025 has us, to put it bluntly, crashing out. If you're staring at your cart wondering how your receipt says $86 when you just came in for 'a couple things,' same. And while we can't fix the economy, we can help you figure out what foods are still holding it down when everything else is going up. So, whether you're already feeling the recession vibes, inflation spirals, or just don't want to give up your particularly particular current fixation meal, here are some tariff-proof(ish), recession-resilient foods that are budget-friendly and, for now, drama-free: Dry legumes Bad news: Because of the recently announced tariff on imported steel and aluminum, there will likely be a spike in the cost of canned legumes (like chickpeas and lentils), but the good news is dried beans are more cost-effective anyway! Okay, because of the recently announced tariff on imported steel and aluminum, there will likely be a spike in the cost of canned legumes (like chickpeas and lentils), but the good news is dried beans are more cost-effective anyway! While cooking dried beans and lentils is time-consuming, it's pretty much entirely hands-off, and the money you save is so worth the pesky overnight soak. Eggs It was borderline traumatizing to check egg prices just six months ago, so I'm honestly in disbelief about this one. That said, a few caveats: avian flu still looms over egg production, and tariffs could impact imported egg products (like processed or powdered eggs used in packaged foods). Pork Some of us have straight up been bypassing the meat section of the grocery store because it's simply too expensive per serving. And while beef prices are high (and still rising), the USDA reports that pork prices are holding steady. So, swap those grilled steaks for pork chops on the grill this summer and bring on the baby back ribs! Fresh fruit and vegetables grown in the US, Canada, and Mexico Hold on, consulting my notes from 10th-grade social studies to confirm that NAFTA (North American Free Trade Agreement) protects tariff-free trade of agricultural products between the US and bordering nations. It is. Phew. Peanuts (the American ones, at least) American PB&J lovers, rejoice — your sandos are safe. The US is one of the world's top producers of peanuts (shoutout to Georgia, Alabama, and Texas), and most of that peanut goodness stays right here at home. In fact, we export relatively few compared to how much we grow, which means the domestic supply is strong and less vulnerable to global price swings or import tariffs. American-made cheese It may be time to swap that French Roquefort for some Maytag blue cheese (made in Iowa), and trade your Irish cheddar cheese for Vermont cheddar! While fresh agricultural products from our bordering nations are protected from US tariffs, imported processed foods — like many of our favorite cheeses — are not. Cheese from Europe, for example, is subject to a 20% tariff, according to the USDA. And who pays the price? We do. Potatoes (Idaho's finest) While a bag of chips might be flirting with $6 these days, the humble potato itself is actually doing just fine. In fact, wholesale potato prices are lower now than they were just a few years ago. That's because potatoes are grown in huge quantities across the US — from Idaho to Maine — which makes them less vulnerable to the kind of global supply chain chaos or tariff drama that's affecting imported goods. Rice (except the imported kind) The average American eats a lot of rice, about 27 pounds per year, but US farmers grow a lot of it! US-grown rice is still affordable, tariff-resistant, and built for bulk meals. Short grain, long grain, basmati, arborio — it's economically stable as long as it's US-grown! Bread The US grows a ton of wheat, so your basic sandwich loaves are likely to stay consistently inexpensive and won't be subject to the wackadoodle market fluctuations hitting other groceries. Biggest takeaways: Stick to US-grown basics, keep an eye out for sneaky import drama, and follow the advice moms around the world have known for centuries: rice and beans is all you really need. Now that you've got the groceries decided, need help deciding on what to make? We've got you. Download the Tasty app for full access to over 7,500 recipes — no subscription required.
Yahoo
a day ago
- Business
- Yahoo
Global economy to slow amid 'most severe trade war since 1930s', says Fitch
The world economy faces a sharp slowdown induced by the most severe trade war since the 1930s, according to Fitch. The credit rating agency has pointed to the ongoing tariff conflict between the two economic superpowers as one of the sharpest confrontations in recent years. It notes that the scale of this trade war has been unprecedented since the Great Depression. Fitch has recently adjusted its forecast for the US effective tariff rate, now estimating it at 14.2%. This is a revision downwards, significantly lower than the 27% rate Fitch projected in April. The agency attributes the adjustment to US president Donald Trump's decision to dial down his aggressive stance on imposing widespread tariffs on other countries. However, despite this recent shift in policy, Fitch cautions that the economic outlook remains weak. "Our latest GDP forecasts reflect extreme volatility in US trade policy in recent months, which has increased uncertainty and will further weigh on growth," the agency said. Read more: FTSE 100 LIVE: Stocks higher as Trump says US 'signed' China deal, traders look to inflation data Fitch looked at the broader economic disruptions caused by the trade conflict, noting that tariffs have dampened US business and consumer confidence. This, in turn, led to a surge in imports in the first quarter of 2025 as US consumers and businesses rushed to preemptively stock up on goods before expected tariff hikes. Alongside this, inventories rose sharply. Despite these trends, Fitch found little evidence of an immediate impact on the US consumer price index (CPI). However, the agency noted that upstream producer prices and various price pressure measures from surveys have seen an uptick, signalling potential inflationary risks down the line. "The tariffs have reduced US business and consumer confidence and prompted a spike in US imports in 1Q25 as US residents sought to front-run tariff increases. Inventories also rose sharply. There is little evidence of any impact on the US CPI so far, but upstream producer price and survey measures of price pressures have risen," Fitch said. The agency also pointed to downward pressures on US financial asset prices, marked by increased equity market volatility, a weakening dollar, and rising long-term 30-year government bond yields. While the trade conflict between the US and China has been a drag on global economic growth, recent months have offered some reprieve. This truce has provided the space for some positive revisions in growth expectations for key global economies. Read more: UK economy likely to grow at moderate pace amid inflation 'uncertainty', warns Bailey Fitch has revised its US GDP growth forecast for 2025 upwards, from 1.2% to 1.5%. Meanwhile, China's growth is now expected to reach 4.2%, up from a previous forecast of 3.9%. In Europe, the outlook for the eurozone has also improved, with Fitch upgrading its growth forecast for the region from 0.6% to 0.8% for 2025. However, even with these positive revisions, inflation risks remain elevated. Fitch pointed out that the volatility in oil prices, particularly the expected average crude price of $70 per barrel in 2025, could further strain inflationary pressures across the global economy. As the world continues to navigate this uncertain economic landscape, the long-term impact of the US-China trade war remains a critical factor in shaping global growth in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
