The Economic Illusion of Donald Trump: Why Powell Is Right, and Tariffs Are Not a Plan

 

The Economic Illusion of Donald Trump: Why Powell Is Right, and Tariffs Are Not a Plan

By Germanico Vaca

While many media outlets remain paralyzed by fear of Trump’s wrath, or addicted to the clicks his name generates, the truth is being ignored: Donald Trump has no economic plan. His constant criticism of Jerome Powell and the Federal Reserve reveals not economic understanding, but desperation. His “plan,” if one can even call it that, consists of tariffs, tax cuts for the rich, arms sales, and noise. Nothing more.

Meanwhile, Chairman Powell is being accused of bias and obstruction, particularly for refusing to lower interest rates ahead of the election. But contrary to Trump’s bombastic narrative, Powell isn’t the villain here — he’s the adult in a room full of political arsonists.

The Tariff Delusion: A Fake Fix to a Real Problem

Trump insists tariffs are the silver bullet for restoring American greatness. But tariffs are not a growth strategy — they are a tax on consumers and businesses. They:

Raise prices of imports,

Trigger retaliatory tariffs from trade partners,

And do not guarantee a return of manufacturing jobs.

Even worse, there's no complementary plan to rebuild industrial capacity. No industrial policy. No incentives for high-tech reshoring. No real infrastructure investment. Just empty slogans and a growing trade deficit.

Where Is the Production Plan?

Every serious economy grows through production and innovation. Trump has offered:

No energy plan beyond “drill more oil” — even as energy independence becomes more complex.

No education or retraining plan to upskill workers displaced by automation or globalization.

No digital infrastructure or manufacturing retooling plan to compete with Europe or China.

Instead, he delivered massive tax cuts to the ultra-wealthy, hoping the old lie of “trickle-down economics” would somehow work this time. It hasn’t. It never has.

 

Subsidies to farmers devastated by his trade wars don’t count as strategy — they’re damage control. A band-aid over a self-inflicted wound.

Weapons Sales ≠ Economic Policy

Trump’s embrace of the military-industrial complex is not new, but it’s dangerous. His foreign policy increasingly revolves around destabilization, weapon exports, and inflammatory rhetoric. But selling missiles and drones is not how you sustain an economy.

It’s how you enrich defense contractors, deepen dependency on war, and risk global economic fallout — including skyrocketing oil prices, should a wider conflict with Iran or its allies erupt.

The Real Reason Powell Won’t Cut Rates

Critics claim Powell is "politicized" for refusing to cut rates. But let’s be clear: Powell sees the full picture, and he can’t say it out loud.

After years of massive debt issuance, foreign buyers like Japan and China are dumping U.S. securities. America is increasingly forced to buy its own debt, often masked through shell investors in offshore locations. This is dangerously close to monetizing the debt — a polite term for money-printing.

Meanwhile, crypto markets — dollar-denominated — expand liquidity even further, feeding inflation in ways most politicians don’t even understand.

If Powell cuts rates now, the U.S. dollar could begin to unravel. Foreign confidence would evaporate faster than any tariff-induced price increase. High interest rates are now a necessary defense, not an obstacle.

The Cow and the Dumb Farmer: An Analogy That Says It All

In Ecuador, a wise economics teacher once said:

“If the cow is more expensive, the grass is more expensive, and a dumb farmer tells you the milk will cost the same, he’s either lying or he’s stupid.”

Tariffs (grass) raise input costs. A hollow economy (no cows) can’t produce value. But Trump insists milk (consumer goods) should stay cheap and growth should stay strong. It’s pure fantasy.

Powell, whether people like it or not, is simply acknowledging economic reality. Trump is the loud farmer screaming nonsense.

The Road to Stagflation

If Trump gets his way — slashing rates, launching wars, imposing tariffs, giving tax breaks to the rich — the result is predictable:

Slower production, due to global instability and lack of domestic investment.

Higher prices, driven by tariffs, energy shocks, and currency devaluation.

Stagflation, the worst of both worlds: low growth and high inflation.

 

And when that happens, Trump will do what he always does — blame everyone else.

 

Conclusion: It's Time to Stop Pretending

Trump has no economic plan. What he has is chaos disguised as bravado, economic vandalism dressed up as nationalism, and a desperate hope that no one will look too closely at the numbers.

Meanwhile, Jerome Powell is doing what any responsible central banker would do: protect the credibility of the dollar, and avoid catastrophe. He cannot say everything he knows. But those of us who understand the deeper mechanics of monetary systems, capital flows, and fiscal smoke and mirrors — we see what’s happening.

And we must speak up. Loudly.