I am listening to yet another news story where economists from across the ideological range are warning that Trump-scale trade wars will lead to recession. The latest warning came from the head of the Bank of England — the British equivalent of the Federal Reserve banks in the USA.
We can wonder why Trump is so stubborn about this trade war when allies like the Kochs and the Chamber of Commerce and several visibly alarmed GOP Senators and House Members are critical.
The answer may lie in history — the history of the democratic German Weimar Republic sliding into Fascism.
In May 1924 the proxy Nazi Party in Germany was still quite fringy — it won just 6.5% of the national vote. That 6.5% fell by half seven months later when the country went to the polls for the second time that year.
By 1928, with German prosperity on the rise (and financed by American loans from Wall Street) that 3% dropped to 2.6%, and the National Socialists lost 2 of their 14 seats in the 491-seat Reichstag. Barely a decade before the formal declaration of WWII in Europe, the Nazis were still a marginal force in German politics and German life.
Nine months after the 1928 election the stock market crashed in New York — which triggered the Great Depression and which led to American banks calling in most of their loans to German industry. In a country that was still paying WWI reparations to the 1918 victors, the depression hit Germany harder and more suddenly than other western countries like the United States.
In the 1930 election (a few months after the crash) the Nazi Party, led by Hitler, increased its popular vote seven-fold and its legislative seats nine-fold. It went from marginal party to second-place, and never went back to marginal until Germany lost the upcoming war 15 years later.
This leap occurred because German voters lost faith in the "old school" politicians who had been unable to prevent the crash of 1929 from destroying the German economy. They basically said “what the fuck -- let's send in the guy who’s promising an end ‘politics-as-usual’ and who’s going to kick all those wealthy bankers in the ass.”
German voters voted for the crazy man because none of the sane ideas were working any more.
In 1932 the Nazis became the largest party in the Reichstag, and in 1933 — with only a third of the seats and 43% of the popular vote — they convinced a majority coalition of parties in the legislature to give the Nazis dictatorial powers to deal with the economic crisis and an ongoing political crisis (worsened when a Nazi arsonist burned down the legislative building and the party blamed the fire on communists).
Within months of the first 1933 election the Nazi government had banned (and violently suppressed) all political opposition and a second 1933 election elected a legislature composed 100% of Nazis and Nazi-approved members.
Most historians agree that the rise of the Nazis to power in Germany was only possible because the country was suddenly plunged into an economic depression in 1929 and 1930. Two years later the traditional parties were still not offering anything new in the face of this hardship.
In the prosperity of 1928, only one in forty Germans supported the Nazis, and the conventional wisdom was that Germany would never have to worry about a bunch of kooks and misfits ever being elected to govern the country that gave the world Johann Sebastian Bach and Albert Einstein.
So — is Trump’s trade war simply a case of narcissism meets economic illiteracy or is there something more sinister at work here — is Trump deliberately trying to plunge America into a chaos that is scary enough to justify the end of the American experiment as Americans have known it for 240 years?
Bear in mind that Steve Bannon is a big fan of Lenin’s political tactics — which called for deliberate chaos to create opportunities for radical, revolutionary change — and that Bannon and Trump are apparently back on speaking terms.