Tragedy and Farce: Dealing with President Donald Trump

In 2005, we gathered up all of our college credits and enrolled to complete our baccalaureate degrees. It is no surprise that academia is politically progressive and bringing with me a more open mind I learned a lot mostly about paying attention to questions. What is an art? What is a science? What is proof? What is evidence? What is a theory? 

I read The Art of the Deal soon after it was published, courtesy of my local branch library in Lansing, Michigan, and I was impressed: you can always make something attractive to someone else. Over the years, perceptual check marks tagged the news about Donald Trump’s real estate projects and then his television shows, but he was always only somewhere between Lee Iacocca and Madonna. Then he got serious.

 

Donald Trump was always a Democrat because of his involvements in real estate with planning & zoning commissions and labor unions. So, when he ran for the Presidency, it was clear to me from Day One that his concern was only for the best of all possible marketing. 

In my estimation, he did not want to face Hillary Clinton in the primaries where he could be beaten and discarded early on. Instead, he chose the Republican party because he knew that he could take out the lightweights such as Ron Paul, Ted Cruz, and Carli Fiorina. Even if he lost to Clinton in the general election, he still would have run as a major party candidate and earned a place in history. He was greatly helped in 2016 by Robert Mercer who brought him Steve Bannon. (See "Jim Simons and the Quants" on NecessaryFacts.) Bannon convinced Trump to broadcast a narrative that would resonate with the untapped reservoir of available voters. 

 

Just ahead of the 2016 general election, Michael Moore
warned Democrats (and others) why Donald Trump
would be elected.

Just ahead of the 2016 election, Michael Moore spoke to several groups, warning them of how and why Donald Trump was going to win by tapping into the unvoiced angst of the masses. 

"Donald Trump came to the Detroit Economic Club and stood there in front of Ford Motor executives and said, 'If you close these factories as you're planning to do in Detroit and build them in Mexico, I'm going to put a 35 percent tariff on those cars when you send them back and nobody's going to buy them'," said Moore.

It is the art of the deal, a mass mediated hyper-reality in which the broadcaster Donald Trump played to the people what they told him that they wanted to hear. 

Donald Trump treated Marine Corps General James N. Mattis as if Mattis were an Apprentice. And Mattis was not the only one to be summarily fired. Nonetheless, on the second and now third time around, Trump still had the support of people who never thought that he would betray them. Of course, you can only betray your friends because your enemies already do not trust you. Trump had the support of anti-communist Venezuelans in Miami. Having lived here since fleeing Hugo Chavez and then Nicolas Maduro, they had businesses and homes. And then came the revocation of protections against deportation. Just ahead of the 2024 election, Donald Trump stood on a stage in Detroit with leaders of the Arab community, and they believed that he agreed with them. 

 

Those of us who advocate for laissez-faire capitalism easily point to the fact that successful marketing impels toward a common benevolent morality because you have to get along with other people. But there are businesses that succeed “one customer at a time” because there is always a (new) sucker born every minute. 

 

And then there is the “long con,” the somewhat complicated confidence game, portrayed in the 1973 movie, The Sting. In any negotiation, the Art of the Deal can involve offering terms that you do not mind abandoning as the cost of gaining the next and more important advantage. Donald Trump’s wavering and waffling upsets traditionalist markets because uncertainty is uncomfortable to most people. 

"An entrepreneur is born with the mentality to take risks, though there are several important characteristics: courage, faith in yourself, and above all, even when you fail, to learn from failure and get up and try again."  - Sheldon Adelson, 2013

Scientists and entrepreneurs live with the unknown and therefore with uncertainty. Einstein was married three times and retracted what he called his biggest mistake twice because he was wrong about being wrong. Get over it and move on. Donald Trump is willing to abandon a resource or a plan and try something new, something else. It is the very definition of pragmatism, a distinctly American philosophy. 

He has filed four bankruptcies. As the insurance magnate, Thomas Caldecot Chubb said, when his clerks were panicked because a ship had gone down with an insured cargo, “If there were no losses, there would be no premiums.” Investors sometimes suffer losses and at the level of  The Trump Organization  all investors practice their own due diligence. So, Donald Trump accepts the losses—2200 points on the Dow Jones for Friday, April 5, 2025—but what are the premiums that he expects? President Trump assures us that in the long run, this all will be good for America. 

• Some goods will not be subject to the Reciprocal Tariff. These include: (1) articles subject to 50 USC 1702(b); (2) steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors, and lumber articles; (4) all articles that may become subject to future Section 232 tariffs; (5) bullion; and (6) energy and other certain minerals that are not available in the United States. 
• “Made in America” is not just a tagline—it’s an economic and national security priority of this Administration. The President’s reciprocal trade agenda means better-paying American jobs making beautiful American-made cars, appliances, and other goods.
• These tariffs seek to address the injustices of global trade, re-shore manufacturing, and drive economic growth for the American people.-- White House Fact Sheet for April 2, 2025.

 

The Dow Jones Industrial Average fell more than
2200 points before settling for a 1600-point tumble

The economy is the active total of trillions of individual choices. Perhaps no stochastic theory is sufficient to predict the next fashion craze but it is possible to analyze the past, to explain it, and to test that theory against other (different) facts, especially when those are submitted as predictions to allow falsification of the theory.

 

The rubrics of the early 20^th century—broad socialisms and fascisms, anti-democratic coups and attempted coups, the contraction of international trade, the Great Depression, and ultimately, World War II and the Cold War—were not isolated events, unrelated to each other, causeless or chaotic and complicated beyond comprehension. 

 

The Roman senate continued to vote on consuls who really were emperors as the coinage was debased, plagues swept the population centers, earthquakes proved impossible to rebuild from, foreign hordes invaded the outer districts and then Italy. Decline and retreat affected the philosophers at Athens, the scholars at Alexandria, the jurists at Rhodes. In those days, all of that took lifetimes over generations, and each day seemed very much like the previous day. We understand it now by compressing the retrospective.

 

In high school history, I learned that the real “American revolution” took place in the minds of people between 1756 and 1775, when the leading thinkers and writers expressed the understanding that the Bill of Rights of 1689 would never be allowed to them. The events after the July 1776 were the War for Independence. 

The failed Continental dollar and the ephemeral money issued by new States (in paper and copper) presaged the Alien and Sedition Acts. In France, the same kinds of events ultimately brought regicide, the Directorate, the failed assignat paper money, and then Napoleon Bonaparte, initially as First Consul, and inevitably as the Emperor. Again, though, it took 20 years and through each of those 7000 days, people lived their own lives as best they could under the circumstances—which is always true.

 

Now we communicate at the speed of light with images and sounds enhancing and eclipsing words. Centuries, decades, lifetimes, days, hours, all are compacted into minutes and seconds as historical events become daily news and then hourly updates. 

 

It may become history that cash inflows to the government from President Trump’s tariffs, coupled with his drastic cuts to the federal workforces (both salaried and subsidized) will balance the federal budget and reduce the federal deficit while cutting direct taxes, and all of that will allow the general economy to expand and extend. It may be that a later round of deal-making will bring among nations a broad reduction in all tariffs.

 

However, reality cannot be cheated. I believe that the likely outcome will be an economic depression and eruptions of armed conflicts all of which President Trump will declare to be fake news, insisting that prosperity and peace are here and we are enjoying them.

 

Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce. 

...

The tradition of all dead generations weighs like a nightmare on the brains of the living. And just as they seem to be occupied with revolutionizing themselves and things, creating something that did not exist before, precisely in such epochs of revolutionary crisis they anxiously conjure up the spirits of the past to their service, borrowing from them names, battle slogans, and costumes in order to present this new scene in world history in time-honored disguise and borrowed language. 

The Eighteenth Brumaire of Louis Bonaparte by Karl Marx. 

Transcription/Markup: Zodiac and Brian Baggins for Marx/Engels Internet Archive 1995, 1999; Proofed: and corrected by Alek Blain, 2006, Mark Harris, 2010. --https://www.marxists.org/archive/marx/works/download/pdf/18th-Brumaire.pdf

 

Pamela Graves was my professor for Modern Europe
at Eastern Michigan University. She taught me that history
is a science and we write it in the past tense.

 

Previously on NecessaryFacts

Tycoon Dough is Democratic 

When Did the “Great Depression” Begin? 

Venture Capital 

Capitalist Culture

The Remarkable Story of Risk 

The Cure for a Failing Empire 

America Pawned is America Pwned

Rod Steiger in The Pawnbroker. 
It does not matter which side
of the counter you stand on.

Pawn shops have taken one or two thousand years of criticism.  The bottom line is that they are resources for the community.  If you want to go into business, which would offer the best opportunity: a pawn shop or a lending library? That said, the fact that pawn shop have proliferated in the suburbs is a stark narrative not captured in government statistics about gross domestic production and unemployment claims.

A new suburban tradition

The fact is that the Reagan-Clinton years were the longest period of economic expansion in American history because America was involved in no large wars and no strong government programs.  Moreover, the House and Senate majorities were close and changed frequently, denying an "imperial presidency" to the White House.  All of that changed with the 21st century.  From the Dot.Com Meltdown to 9/11 and the subsequent wars in Iraq and Afghanistan, the so-called Mortgage Crisis and the Bush/Obama Bailouts - protested by Occupy and Tea Party alike - America and the world have suffered a long recession.

Can't tell a pawn shop from a bank.

Recessions are not necessarily bad.  The last "long recession" ran from the "Crime of '73" to the Panic of 1907.  Workers formed unions and agitated for the eight-hour day while farmers called for cheap silver money to pay off their debts.  In fact, prices fell because of increased productivity from industrialism, just as our "information age" lowered transaction costs.  Back then the new technologies were the railroad, telegraph, telephone, and typewriter. That did little to assuage the farmer or factory worker who found their incomes falling faster than the prices of the things they wanted to buy.  So, too, today, are suburbanites ready customers for pawn shops because their own real incomes have fallen because  the federal government tripled the money supply.

ALSO ON NECESSARY FACTS

Supplies and Demands

Employee Theft

The Pretense of Sociology

Money Without Banks and Governments

The Stock Market Crash of 1929 marked the onset of the Great Depression, but it took 30 months for the banks to fail. After all, the stock market had crashed often, sometimes twice in a decade. While the effects were not to be ignored, they were negligible in an agrarian, frontier society.  More than two years of government intervention were required before total economic collapse occurred. And even so, all that was missing was money. Most people had the same assets and liabilities that they held the day before and would hold the day after. What they needed was a medium of exchange. So, the Howell Board of Commerce issued "stamp scrip." In fact, perhaps 12,000 separate communities across the USA and Canada created a plethora of emergency currencies.

The First National Bank in Howell was placed in conservatorship on February 13, 1933. (Michigan governor William Comstock issued a midnight order to close all the banks, lest Henry Ford withdraw his money. Full story on Necessary Facts here.)  The Howell Trade Dollar was issued on February 22. Within two weeks, all 5000 notes were in circulation. This is telling because in order to get one, you had to spend $5. Some people bought automobiles in order to acquire many of them. Other people paid off accounts three years old. The notes circulated for 6 months and were widely regarded as having been successful.

Back of Howell Trade Dollar with Stamps

What made this scrip special and subject to study on the national level is that it depended on the "velocity" of money. The holder of a note had to spend it every three days. When the note was spent, a 2-cent stamp was affixed to the back. After 52 transactions, the note was redeemed by the Howell Board of Commerce for a real dollar. (If the note was not spent, the holder still had to buy a 2-cent stamp.) The idea was to keep this money in circulation.  Stamp scrip in particular and alternative currencies in general were a special interest of Irving Fisher, the creator of the Chicago "monetist" school of economics championed by Milton Friedman.   

The back of this Fostoria, Ohio, scrip has a simple bank endoresement

The notes had a natural tendency to accumulate in the shops of retail merchants. Therefore, they were sold to businesses, school boards, etc., at a 5% discount. Citizens Insurance of Howell was one of many businesses to pay wages in Howell Trade Dollars.

Some of the details of how the scrip was actually used are no longer clear. Some issues show some kind of tally. It is not likely that these are final evaluations, since about half the places are still open. Many of the stamps have double zeroes written across them. The tallies could represent the whole dollar value of the purchase which necessitated the stamp. If so, the 00 would indicate that the stamp was bought as a penalty for holding the note without spending it.

Also, according to the legends on the back of the note, stamps were required every 10 days. The notes seem to have been intended to circulate from July 25, 1933 to December 6, 1934, a total of 509 days, 519 allowing for a 10-day period before the first stamp was due.

During economic depressions, people invent new forms of money to fill the gaps. Two from the 1990s were Time Dollars and Bone Money.

Ithaca, New York, has developed a local currency called "Time Dollars." People there trade services in units of an hour with an hour being worth about $10 more or less. The idea of Time Dollars has been copied by other communities in both the United States and England. As of this moment, Ithaca Hours are alive and well, celebrating over 20 years of continuous use. (See their website here.)

During the Autumn of 1993, people in Berlin saw the arrival of so-called Bone Money, "Knochengeld". The paper notes originated in the Prenzlauer Berg district. This neighborhood is popular with young artists and writers, similar to New York City's Greenwich Village or the Left Bank of Paris.

They called it "bone money" because the numbers were designed in the form of bones. Neighborhood retailers and restaurants accepted these notes. The experiment ran for three months. Then, the remaining notes were sold at an auction to raise money for charity.

Time dollars and bone money may not take the place of the coins and bills you carry, but they have certainly earned their place in history along with wooden nickels, prosperity scrip and Hard Times tokens which were invented during other economic recessions.

This work was taken from these previously published articles.
"The Howell Trade Dollar" by Michael E. Marotta,  Michigan Token and Medal Society Junkbox, Winter 1995
"Homegrown Currency has a Rich Past" from The Northern Express.
"Passing the Bay Bucks" from The Northern Express.
"Creating a Local Currency" the MSNS Mich-Matist, Summer 2004

PREVIOUSLY ON NECESSARY FACTS

The Art of Finance

Numismatics: History as Market

Forgery and Fraud in Numismatics

William Sheldon: Psychologist, Numismatist, and Thief

Scripophily

History or Hysteria: When Did "the Great Depression" Begin?

No mythology faces as many problems as the folktale of The Great Depression. The Austrian economist, Ludwig von Mises, pointed out in Human Action that capitalists and socialists usually agree on the raw data, but then disagree on what the facts mean. In 1929, the New York Stock Exchange recorded dramatic price collapses on October 24 ("Black Thursday") and October 29 ("Black Tuesday"). What is missing is a connection between the NYSE of October 1929 and the banks of Detroit in February 1933. It was there, in Detroit, on February 14, 1933, 40 months later, and 600 miles away, that the bank failures of the Great Depression began.

To be sure, bank failures were common in the years before 1929-1933 – and so were bank openings. From 1884 to 1921, the number of banks had sextupled from 5000 to 30,000. Not only were these generally small banks – some capitalized near the minimum $25,000 – but after 1921, the new operations were often branches. The federal Comptroller of the Currency had opened the door to allow city banks to compete in towns and villages. From that point, bank failures increased, as is to be expected from increased competition. In January 1933, it seemed that the summer of 1931 had been the lowest point possible and that a recovery was unfolding. 

Depression-Era scrip issued by the City of Detroit
against property taxes due



            Speaking to a United Press reporter in Dearborn, on February 1, 1933, Henry Ford called the period 1923-1929 “the real depression.” At that time, two holding companies dominated finance in Detroit. One was the Detroit Bankers Company Group. The other was the Union Guardian Group, colloquially called “The Ford Group.” When the Union Guardian Group experienced pressure from withdrawals, it turned to the federal government for a loan. However, the Reconstruction Finance Corporation required that the Fords subordinate $7 million that the banks owed to them, which Henry Ford refused to do. President Herbert Hoover set up a meeting with Ford, Arthur Ballantine (Under Secretary of Treasury) and Roy D. Chapin (Secretary of Commerce). Chapin was a former Olds executive and co-founder of the Hudson Motor Car Company. He appealed to Ford as a fellow manufacturer. Ford replied that Hudson stock was traded on the NYSE, which Ford’s was not, and that a washout of the banking industry seemed inevitable. Chapin replied that if people do not have money to buy cars, Ford was in for hard times himself. Ford said that he felt young enough to start over from scratch. Ford said that everyone else ought to be prepared to get up a little earlier and work a little harder. He also said that he would withdraw his $25 million from the banks in the morning. He did not get to do that.

The next morning, February 14, 1933, Michigan’s governor, William Comstock, declared a banking holiday. The proclamation had been signed at 1:00 AM, published, and delivered to bankers when they arrived for the start of the business day. Two weeks later, outgoing President Hoover hesitated to declare a national bank holiday, so the newly-inaugurated President Roosevelt did just that. On March 21, 1933, the Michigan Legislature passed the McNitt-Green bill, granting the governor “dictatorial powers” over banks. Unlike Hitler, Mussolini, and Stalin – to whom he was favorably compared by newspapers in those troubled times – Gov. Comstock had modest goals and eventually declined further powers to control the insurance industry as well.

Contemporary Reports: Panic or Puffery?

It is possible that the “Panic of 1857” is another anti-capitalist delusion?

 

Historians are trained in school to give precedence to first-hand accounts from newspapers, journals, and diaries.  However, even these must be evaluated against an objective standard.  Narratives depend on perspectives.

The anti-capitalists believe that fluctuations in prices, supplies, and demands are examples of the failure of society based on personal enterprise. The socialists claim that their government planned centralized economies would eliminate ups and downs, booms and busts, gluts and famines. History proved them half right.

We know about the "Panic of 1857" from history books that looked to sensational news stories about frenzied mobs of otherwise honest and intelligent folk hopelessly demanding the return of their hard-earned money from inept bankers forced to close their doors. The truth may be different – certainly more complicated – than this. The 1907 History of the United States by James Ford Rhodes gives the Panic of 1857 one line, never calling it by name. To Rhodes, the importance of the financial event was only that it temporarily drove “bleeding Kansas” from public attention. John Fiske’s History of the United States published in several editions by Houghton Mifflin from 1894 to 1907 says nothing about the Panic of 1857, mentioning instead the Dredd Scott Decision. However, Fiske does cover the Panics of 1837 and 1873. William Graham Sumner’s History of American Currency, published in 1874, does tell the story – including the loss of the S. S. Central America – but Sumner puts the word “panic” in quotes. Perhaps that is where it belongs.

Certainly, the Chemical Bank of New York, in its self-published history of 1913 is rightfully proud of its directors for having carefully managed the assets of depositors and thereby surviving whatever actually happened in the autumn in 1857.

We expect news to be objective, distinct from editorial comment. That was possible only after the estate of Joseph Pulitzer endowed an award fund to the Columbia School of Journalism in 1912. In the spirit of Pulitzer’s better side, the Pulitzer Prize Committee itself admits: “He crusaded against public and private corruption, filled the news columns with a spate of sensationalized features, made the first extensive use of illustrations, and staged news stunts. … Pulitzer was drawn into a bitter circulation battle with William Randolph Hearst's Journal in which there were no apparent restraints on sensationalism or fabrication of news.”


While it may well be true that "panic" was in the streets of New York City in the autum of 1857, the fact may be that this was a temporary, local event.  Bank failures - such as they were - were caused as much by the law as by economic reality.  State law demanded that banks make good on withdrawals by the end of the business day.  No other business was so constrained.  If a druggist or livery owed you money, you would wait, like any other creditor until cash came in and you got yours.  Not so with banks.  So, fear of default may well have been real for a few days.  How long that lasted and how far it spread is not well recorded.