Crashing The Economy Is Necessary, Unfortunately

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With “Liberation Day” in our rearview mirrors, we can start to talk about the consequences of economic policy that led to the Great Depression and how implementing it now is not a good thing. But I contest it’s necessary. Let’s get into it.

In This Issue

• Smoot-Hawley, Like Wu-Tang, Is For The Children

• How Bad Will It Be?

• Employee Pricing for Everyone

• Stellantis Idling Plants

Smoot-Hawley, Like Wu-Tang, Is For The Children

Yesterday, President Donald Trump announced his sweeping new tariffs on all imported goods into the United States. This tax on U.S. citizens is the highest it’s been since 1930 and is expected to plunge the economy quickly into a recession.

For me, who was born in 1983, that would make this at least the fourth recession in my lifetime. It’s really no surprise why Millennials, especially the older ones, are like they are. Because holy fuck am I tired of this shit.

While the economic repercussions will be covered in the future, as things go from bad to worse, today I want to talk about why I think it’s necessary. I don’t like it, but it’s something we’re all going to have to endure because people don’t learn lessons without pain.

All last week, we kept hearing about how the tariff plan wasn’t going to be that bad. Trump’s cronies were on TV trying to calm the market, trying to lull investors into a false sense of security, trying to convince us all that Trump’s economic plan isn’t as batshit crazy as some were claiming it to be.

Anonymous sources kept saying, “He hasn’t decided yet,” while people with at least half a brain were bracing for the worst. But there’s a reason why the announcement came after the markets closed yesterday, and it wasn’t because it was going to be good.

Trump’s supporters have always twisted themselves into knots trying to explain that Trump’s decision-making is actually some three-dimensional chess and that he’s a business genius. They go to great lengths to tell us, “No, he doesn’t mean what he says, he’s just using that as a negotiating tactic for a better deal.”

Each time, his supporters, people in the media, and then the general public fall for it. And then each time he does exactly what he says he’s going to do everyone ends up with the shocked Pikachu face.

Trump isn’t some business savant — he bankrupted a casino, for example — but he is an authoritarian thug. The tariffs are part of a mob thug mentality. Senator Chris Murphy explains it far better than I can.

So why must we endure this, then, if it’s all bad? People need to learn that Trump is an authoritarian. They need to learn that he doesn’t have the best interests of the American people in mind. There are people out there right now defending Elon Musk and Tesla more than they’re defending the rights of trans people to even exist. They’re pledging to defend something they hated just six months ago — electric vehicles — but are okay with actual human beings being sent to a slave labor prison outside the U.S.

Trump voters need to have the leopards eat their faces if there’s any chance of them actually learning from this. The media needs to stop being so fucking gullible when an Trump source tells them something different than what Trump is saying publicly.

We all have to stop falling for this shit and realize just how serious and dangerous Donald Trump is. Because when a UAW employee stands up at the podium with Trump and defends this absolutely assinine trade policy, it tells me not enough people have suffered to learn.

I hate that it has to be this way. But as often as Democrats have bailed out Republican presidents, it hasn’t stuck yet that the propaganda being fed to the public from Fox News, Elon Musk, Sinclair Broadcasting, and so forth is actually not true, so people continue to vote against their best interests.

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How Bad Will It Be?

Depending on which analyst you talk to, the overall vehicle sales reduction can be anywhere from 1 million to 3.5 million fewer vehicles sold. If that estimate — from Bank of America if 25% is tariffs are passed on to the buyer — holds to be true, the economic damage will be substantial.

Whole plants will shut down at that rate, crippling the communities built up around them. When the automakers were “too big to fail” during the bailout, it was because of the economic effects that it would have over all the communities in which automotive production is supported. Now, our president is sending the economy careening off the cliff and is doing so with the full support of far too many people in government.

A survey conducting by AutoPacific sort of states the obvious, but if vehicle prices go up, people are going to adjust their buying plans accordingly. That might mean going for a cheaper vehicle, or trying to find something used.

Interestingly, Democratic and Republican respondents say they know how tariffs work. I don’t believe them. Republican respondents also say that increased vehicle costs won’t affect their purchasing decisions. Bullshit. Everyone’s purchase decisions are going to be affected by higher prices.

As I’ve mentioned before, we don’t know how bad it’s going to be until it actually happens. I tend to believe the analyst projects of negative GDP growth and a recession, but how bad it ends up being depends on how bad the retaliatory tariffs are, how long this idiotic trade war goes on, and how long Donald Trump stays in power.

Employee Pricing for Everyone

Today, Ford announced that it was going to offer the equivalent of A Plan, its employee pricing program, for everyone. I have some thoughts, but I’m going to look at it un-cynically first.

Anything that can make vehicles more affordable for people is a good thing. Since Ford is better suited than other automakers when it comes to U.S. production, its exposure to the new tariffs isn’t as high. There is still exposure, of course, but it’s in a better position to offer such a discount which will lead to the company buying market share. It’s smart business.

Additionally, if you buy an EV, you get the free home charger installation and equipment through June 30th, which saves you even more.

Again, I dig it.

Looking at it a bit more critically, Ford will likely be forced to raise prices as tariffs start to hit the bottom line, so the discount might not be as awesome when the pre-discounted price goes up. But Ford has always been good at marketing, and this is something they can market the pants off of. And again, I can’t argue against cheaper cars, even if the price still goes up.

I’m also old enough to remember the last time automakers had to roll out employee pricing for everyone, and it wasn’t during the good economic times.

There’s more I could say on the matter, but I want to wait to see how other automakers react and how quickly the industry — and public — respond to the new tariffs.

Stellantis Idling Plants

Stellantis is one of the first automakers to announce idling plants as a result of new tariff policies. While only temporary, it will affect some 900 individuals in the United States.

Windsor is taking a two week break. It makes the new Charger and the Pacific. Toluca will pause for the rest of the month, which makes the Compass and the Wagoneer S.

Additionally, the plants facing temporary layoffs include the stamping facilities in Warren and Sterling Heights. Plus, three facilities in Kokomo, Indiana make transmissions and castings. Those plants feed the plants that are pausing, per a Jeep spokesperson to The Detroit News.

I would expect more of this from more automakers fairly soon.