Add to that the role of U.S. universities in driving innovation and attracting international capital, and it starts to look like this whole engine is powered by the very things that Trump’s tariffs and restrictions are pushing back against. Doesn’t that make his actions — while ostensibly protecting U.S. jobs — potentially anti-university and anti-investment in the longer term?
I’m genuinely asking this as someone without a background in economics and curious how others see it. Does anyone else think this crackdown might undercut the very ecosystem that’s funded a huge part of American tech?
In any potential scheme like what you describe there would be on a time lag delay, with holdovers (tit for tat), and no real visibility.
The crackdown will undercut this ecosystem without a doubt, but that was bound to happen anyway because of the loss of the petrodollar agreement, and the money printing which has been nonstop since 2012, when we abandoned the sound dollar policy.
The money pool we inflated to meet demand for the petrodollar mandated reserves of other nations is now returning to the US domestic market (driving inflation, a 5 decade delayed debasement).
There are critical junctures where monetary properties in money no longer hold, and we are coming up on one of those junctures with the USD. Most economists I know don't appropriately consider monetary impacts on their econometric models.
In the private sector, money printing through non-reserve debt issuance has already surpassed this juncture but hasn't yet been actualized. This cycle of printing debt fuels the boom bust cycle, and when enough bad investments occur the boom bust cycle becomes the bailout cycle once every 8-10 years. So this has already occurred but its largely off the public ledger.
The public deficit will breach it also in 2030, sooner if more spending occurs. Generally it is the same behavior as what happens in a 3-stage ponzi system. Benefits are front-loaded, diminishing returns, outflows exceed inflows (and collapse of perceived and real value, stable store of value and medium of exchange will have then failed as a whole shortly after).
The short rundown is, Adam Smith has two requirements needed for any participant to continue operating in a market economy.
They must make sufficient profit to cover expenses (in purchasing power), and in individuals that includes the expense of 3 children and wife. These both have largely failed, being edged out, and out-competed by companies that have attached themselves to a money printer and removed their loss function constraints as opaque state-run apparatus forcing the trend towards consolidation through leveraged buyout, merger, and bankruptcy. This is silent nationalization.
That critical juncture at stage-3 basically collapses any market to a non-market socialist economy. The point at which production is exceeded by 'debt growth'. First order producers tend to calculate those loss constraints in a more rigorous way.
This is unsustainable because we know non-market socialism as a system fails long-term. They fail to chaotic distortions that occur in part from cooperative decision-making which violates requirements for economic calculation (it generally must independent and adversarial as a participant). This usually occurs within 50 years at the latest, sometimes within 2, and as a result of the 6 problems Mises touches on in his book from the 1930s on Socialism.
So this is actually a much more dire situation than at first glance because we can no longer print money, and the transition from fractional-reserve in 2020 to no reserve (0% reserve) is what nailed the coffin shut. Basel 3 as the capital reserve system they transitioned to fails because it assumes objective value, and that simply violates known economic principles as covered by Carl Menger in his paper on Subjective Value.
PS: If you are thinking AI driving the labor value of time in a factor market to 0 basically breaks this cycle too you'd be right.
The danger is that when economic exchange fails, food production fails following models put forth by Malthus/Catton which are to put it lightly apocalyptic, but appear to be soundly reasoned and fall under socio-economic collapse.
> but that was bound to happen anyway because of the loss of the petrodollar agreement
The agreement was informal and it "ended" about a year ago. Last I checked, most oil was still priced in USD.
> Basel 3 as the capital reserve system they transitioned to fails because it assumes objective value
citation needed.
I'm worried about the long-term value of the US$, but perhaps not as much as you ... are you putting your money where your mouth is on that?
uxhacker•14h ago