As the “Tariff Man,” Trump is creating the Second Gilded Age

Count on one thing if Mark Twain the famed American author of Tom Sawyer and Huckleberry Finn were alive in the current era he would certainly have written a novel about Donald Trump After all his novel The Gilded Age A Tale of In contemporary times distinctly caught a th-century version of our Trumpian moment tariffs and all They want me to go in with them on the sly says Colonel Sellers the anti-hero of that novel Lowering his voice to a conspiratorial whisper the colonel explains to his wide-eyed dinner guest how they would buy a hundred and thirteen wild cat banks in Ohio Indiana Kentucky Illinois and Missouri and then all of sudden Whiz the stock of every one of those wildcats would spin profit on the speculation not a dollar less than forty millions With Twain s uncanny insight into the American character his novel presaged the quarter-century to follow so accurately that in the end it lent its name to the Gilded Age that era of rapid industrialization and rising robber-baron fortunes Ripped from two centuries of Puritan moral moorings by an inflamed desire for sudden wealth the novel s archetypal American families are caught in a fever of speculation that sends them scrambling across the continent in a frenzied search for jackpot profits With money then breeding its own morality the era s capitalist excess naturally begat Trumpian-style corruption When unpaid wages stopped the construction of his railroad out West Twain s character Colonel Sellers sent the project s chief engineer to the head office in New York City to find out what had happened to the missing money The matter is simple enough the company s president explained matter-of-factly to the astonished engineer A Congressional appropriation costs money A majority of the House Committee say apiece a majority of the Senate Committee the same each say a little extra to one or two chairmen of two such committees say each and there s of the money gone Beneath the spectacle of soaring stock prices spreading railroad networks smoking steel mills powerful trust monopolies and conspicuous consumption by the country s ever-increasing number of millionaires Twain discerned a deep underlying insecurity to be the very essence of what became known as the Gilded Age It is a time he wrote when one s spirit is subdued and sad one knows not why when the past seems a storm-swept desolation life a vanity and a burden and the future but a way to death Looking at contemporary America through Twain s somber vision can teach us something essential about our own time that has so far eluded the mainstream media particularly the profound political implications of President Trump s wild global tariff regime Those duties on foreign imports will not just raise prices and stoke inflation as the media has indeed been telling us but all too crucially undercut the fiscal foundations of a middle-class American society that we ve known for more than a century creating a new Gilded Age of rising private fortunes in our time billionaires and deepening social inequality And with Donald Trump in mind let s take a little trip through a history that s anything but Tom Sawyeresque Cycles of Change Give Twain full credit When writing that novel he also intuited that the economic juggernaut driving his Gilded Age would come crashing down in what proved to be the devastating panic of The country had indeed suffered previous panics greater part of them regional or relatively short-lived This one would be different As New York banks held fire sales of assets to meet a cash crunch particular banks nationwide exclusively suspended operations while industrial output shrank by and unemployment hit an unprecedented Adding to the difficulties of workers the McKinley Tariff of named after then-representative and future president William McKinley had imposed record-high duties of on imports and so raised the price of countless basic consumer goods which should sound all too familiar in the age of Trump The panic then became a full-blown four-year depression that sent thousands of the unemployed then called Coxey s Army marching on Washington to demand redress from Congress Not only was that panic an economic situation of unprecedented severity but it was also the first in a boom-and-bust cycle that has marked America s unbridled capitalism up to the present moment with each boom producing spectacular private wealth and each bust fostering abject society misery and mass restructuring movements Like Icarus whose wings of wax carried him too close to the sun the U S market system sometimes flies so high that its wax wings melt The ensuing crash is so searing immiserating so a multitude of for so long that it can inspire sustained movements for change The severity of the protracted depression that ended the Gilded Age sparked myriad calls for social change and led to the Progressive Era during which labor unions organized workers the NAACP started its struggle for civil rights and women marched for suffrage Investigative reporters called muckrakers also began publishing expos s of financial power and political corruption in mass-circulation magazines like McClure s and Collier s Weekly setting an agenda for political adjustment In major cities middle-class reformers opened settlement houses for poor immigrants enacted housing codes to ban cold-water tenements and set up free inhabitants schools At the state level progressives like Wisconsin governor Robert La Follette battled the railroad monopolies that gouged farmers desperate to get their crops to region Meanwhile at the national level in Democratic reformers in Congress slashed the country s high tariffs long a regressive tax on working-class consumers replacing them with a progressive income tax whose top rate was then on incomes over Since the federal establishment had long used tariffs as its prime source of revenue Progressive era legislators fully grasped just how fundamentally regressive they were and fought successfully to cut the tariff rate from President McKinley s in to just by Typically the import duties that refiners in Brooklyn and Philadelphia paid on raw Cuban sugar would be passed on to consumers as higher prices And clearly the cost of a cup of sugar then took a far more important slice out of a worker s wages than it did from the kitchen budget of a millionaire s chef Requiring those who had the least to pay the majority was a glaring economic injustice that would inspire progressive reformers to fight tariffs with an impassioned intensity that seems almost incomprehensible in the current era Related Aid groups prepare for a big beautiful spike in poverty The Roaring s But all that momentum for change stalled when in the United States entered World War I and then segued to a postwar decade of speculative frenzy At war s end in Forbes magazine published its first ranking of the country s richest men with oil baron John D Rockefeller then America s first and only billionaire followed by millionaires whose fortunes corrected for inflation would make them billionaires in the present day Industrial tycoons like Andrew Carnegie steel J Ogden Armour meatpacking Henry Ford autos Daniel Guggenheim mining and Pierre du Pont II chemicals After the stock field started roaring in the s however it minted hundreds of new millionaires while sales of cars telephones radios and appliances boomed Between and the Dow Jones Industrial Average for shares on the New York Stock Exchange surged by As a parallel tide of political repression swept the country American Legion veterans broke up socialist rallies a young J Edgar Hoover rounded up radicals for deportation and bloody race riots swept Chicago and Washington D C While Republican conservatives took control of Congress and the White House a revived Ku Klux Klan ran the legislatures of a half-dozen states lobbied Congress to enact immigration restrictions and presided over various lynchings of African-Americans The Depression Decade of the s The stock industry that came in like a roaring lion at the start of the s went out like a bleating lamb at decade s end On Black Monday October it suddenly dropped lost another on Black Tuesday and kept sliding into the summer of losing of its value in a fall so steep it wouldn t reach that peak again until By the time President Franklin Delano Roosevelt was inaugurated in March the nation was in dire straits About of the workforce or selected million people were unemployed with thousands of hobos riding the rails long lines snaking outside soup kitchens and shanty towns dubbed Hoovervilles after the indifferent president who had preceded FDR huddled outside cities large and small In the industrial northeast factories shut down In the Great Plains thousands abandoned their farms in the country s dust bowl and headed for California So deep and desperate was the Great Depression that President Roosevelt had ample populace encouragement to enact a New Deal of unprecedented socio-economic reforms creating nothing less than the modern federal ruling body To provide work for the unemployed FDR formed the Civilian Conservation Corps and the Works Progress Administration that mobilized nearly nine million people to build parks bridges and miles of roads Private sector workers won the right to form unions and strike under the National Labor Relations Board largely ending the union-busting and goon violence of decades past Since the country had no form of retirement savings FDR formed the Social Defense Administration in which as of now sends benefits to million Americans To fully electrify the financial system the New Deal dotted the U S with massive hydroelectric projects like the Fort Peck Dam and delivered cheap power to farms through the Rural Electrification Administration To make air excursion affordable the Roosevelt administration built airports nationwide notably LaGuardia Airport in New York City To end the bank runs that periodically wiped out customers deposits his Banking Act of created the Federal Deposit Insurance Corporation to enforce restrictions on banking speculation and a year later formed the Securities and Exchange Commission to protect ordinary investors from fraud As the New Deal raised the tax rate for the top income bracket from to a historic high of by the share of all U S income earned by the richest fell from a peak of in to just after World War II and it would remain there until That change would be foundational for the middle-class democracy that countless still regard as archetypally American In sum by the time the New Deal was done in the Roosevelt administration had brought high-flying U S capitalism down to earth with regulations that curbed speculative excess while preventing spectacular crashes A New Gilded Age As the Cold War drew to a close during the s President Ronald Reagan advanced a conservative agenda of tax cuts and deregulation sparking the start of a new Gilded Age that over the next -plus years would produce a level of economic inequality not seen for nearly a century That era also coincided with a succession of financial crises that could have sparked serious economic depressions had they not been constrained by the regulatory mechanisms the New Deal had put in place By slashing the tax rate on the highest incomes from to just President Reagan catalyzed a steady climb in private wealth that would continue unchecked for decades to come By the richest were already earning of the nation s income putting them right back where they had been in the s Want more sharp takes on politics Sign up for our free newsletter Standing Room Only written by Amanda Marcotte now also a weekly show on YouTube or wherever you get your podcasts Just as railroads were the iconic industry of the original Gilded Age so the Internet and its corporate spin-offs became the prime driver of our current era of excess The release of system developer programs like Mosaic combined with a sharp increase in U S households with a personal computer from just in to by became the prime ingredients for the dot-com bubble of the late s Growing numbers of Americans started shopping at Amazon com searching on Google and booking expedition online at Expedia As the Telecommunications Act of opened up the broadcast spectrum and the Taxpayer Relief Act of cut capital gains taxes on stock transactions the Nasdaq stock exchange which features tech listings rose by in a five-year frenzy of speculative trading for almost any stock with com in its name Adding fuel to that blazing fire in President Bill Clinton encouraged Congress to repeal the New Deal s Banking Act of allowing financial speculation through the merger of retail and outlay banking In March the dot-com bubble absolutely burst and the Nasdaq stock index started a sustained fall that virtually wiped out the previous decade s gains Over the next two years markets were also shaken by serious scandals after company officers falsified returns to feed the sphere frenzy bankrupting a half-dozen major corporations including WorldCom the country s second-largest telephone company Enron a top power corporation with revenues of billion and Adelphia a prominent cable television provider with over two million subscribers To correct what one leading law firm called a broader practices of greed and deception that had taken root in the corporate world Congress passed the Sarbanes-Oxley Act in that tightened financial regulations to protect investors from systemic fraud Nonetheless an even greater panic soon followed Freed from the New Deal Banking Act s restraint on speculation financing banks began engaging in predatory lending of subprime mortgages and aggressive marketing of mortgage-backed securities producing a profit-taking craze that came crashing down in the Great Recession of - As the country s fourth-largest expenditure bank Lehman Brothers collapsed and its fifth-largest Bear Sterns was liquidated in a fire sale the financial system trembled at the brink of collapse Recognizing the seriousness of the dilemma Congress hurriedly authorized corporate bailouts funded by a billion appropriation under the Troubled Asset Relief Plan By the time the Great Recession ended in mid- unemployment had doubled to and the Dow Jones Average had fallen by But the country had indeed been spared another Great Depression The Advent of Donald Trump During those years of boom and bust however one trend remained remarkably steady the rich just kept getting richer The number of global billionaires listed by Forbes would increase tenfold from in to in with a total wealth of trillion During the presidential campaign Forbes included Donald Trump among them estimating his wealth at billion In past periods of conservative Republican rule Congress and the White House served the interests of the richest whether industrialists or Internet tycoons But in for the very first time the American people put a genuine billionaire in the White House and to nobody s surprise he soon made it clear that his only consistent concern was serving the interests of his peers In the first year of his first term in fact Trump enacted the tax cuts that the New York Times called the the greater part sweeping tax overhaul in decades By cutting the corporate tax rate from to reducing the top individual income tax rate from to and doubling the size of estates exempt from being taxed to million those Trump tax cuts economists ascertained produced a marked increase in after-tax income for high-income households Indeed the bottom of wage earners saved just each while the upper gained each and the top at least When the budget s tax cuts for the rich are combined with his escalating tariffs that are bound to raise prices for ordinary consumers those twinned policies are guaranteed to produce a massive transfer of wealth to the wealthiest of Americans creating an ever steeper version of social inequality that is fast fostering a new Gilded Age and the economic disasters that are bound to go with it Yet even that landmark regulation would pale before the inequitable impact of Trump s tax policies in his second term in office which all too literally sought to overturn the fiscal foundations of the Progressive Era reforms that had shaped American middle-class society for more than a century If we combine the social impact of his new Big Beautiful budget bill which extends the tax cuts with his skyrocketing tariffs Trump seems to be trying to undo the landmark tax law of by reducing or replacing the progressive income tax with tariff revenues that are really a regressive tax on the poor When the budget s tax cuts for the rich are combined with his escalating tariffs that are bound to raise prices for ordinary consumers those twinned policies are guaranteed to produce a massive transfer of wealth to the wealthiest of Americans creating an ever steeper version of social inequality that is fast fostering a new Gilded Age and the economic disasters that are bound to go with it Apart from his agreement war with China in his first term Trump in fact had little impact on tariffs By the time he left office in he had raised the average import duty only incrementally from to a far cry from the record rate of the McKinley Tariff and so still an insignificant factor in both federal revenues and the average American s cost of living In his inaugural address last January however Trump praised his distant predecessor saying President McKinley made our country very rich through tariffs and through talent he was a natural businessman and gave Teddy Roosevelt the money for a large number of of the great things he did including the Panama Canal In a Rose Garden ceremony on his April Liberation Day Trump ordered record-high tariffs for all the world s nations with duties of on imports from Lesotho and on those from China Then in an interview with Fox News on April the president suggested there is a chance that the money from tariffs could be so great that it would replace the income tax As the average import duty started climbing to his transaction adviser Peter Navarro projected that Trump s tariffs could raise billion in revenues or more than a third of the trillion in individual income taxes the IRS collected in During the four-month blitz of tariff orders that followed the Trump White House has insisted on the fiction that other countries will purely pay those import duties After proclaiming himself a Tariff man during the voting process campaign Trump informed his rallies that a tariff is a tax on a foreign country A lot of people like to say it s a tax on us No no no it s a tax on a foreign country In May when Walmart s CEO exposed the transparent falsity of that declaration by stating Higher tariffs will consequence in higher prices an apoplectic president narrated the company to EAT THE TARIFFS In mid-July when Trump disclosed another round of tariffs that were to reach a McKinleyesque level of a White House spokesman repeated that exculpatory falsehood saying The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American business sector We need your help to stay independent Subscribe the present day to sponsorship Salon s progressive journalism Rising Resistance With surprising speed Americans are starting to see through such sophistry and resistance to the Trump administration is rising Despite his repeated denials a Gallup poll taken in April uncovered that of all Americans believe that higher tariffs will upshot in paying more for products And in late June as Trump s Big Beautiful budget bill neared legislative approval with massive cuts to wellbeing care for millions of Americans a Quinnipiac University poll detected of the country opposed the bill and only supported it Those polls reflected a growing opposition to Trump s policies In April his then-ally Elon Musk poured a record-breaking million into the poll for the Wisconsin state Supreme Court but the opposing Democratic candidate still won a stunning double-digit conquest In June five million Americans in cities and towns across the country marched in anti-Trump No Kings rallies which added up to the largest single day of mass demonstrations in U S history After only six months of Trump s term it is still not clear whether his erratic economic policies disrupting supply chains creating labor shortages from mass deportations and inducing record inflation will inflict sufficient social pain to inspire a sustained movement for change But one thing is already quite clear Without such mass protests and a determined democratic opposition at the ballot box the Trump administration will persist with a tax and tariff initiative aimed at creating the sorts of social inequity and economic privilege not seen since Mark Twain s original Gilded Age Consequently the grim economic results down the line are painfully predictable Read more about this topic Trump and the GOP don t care for wellness helpers Greed vs integrity in Trump s Gilded Age How the big beautiful bill will deepen the racial wealth gap The post As the Tariff Man Trump is creating the Second Gilded Age appeared first on Salon com