Did He Really Need to Do This?
If you review the dogma of Donald Trump, you will see a picture of the administration’s complete lack of intelligent design. If you wanted to bring together many nations to curb Chinese manipulation of world trade, you would sign an TTP agreement. Trump walked away from it. After NAFTA achieved years of strong economic development in the US, Canadian and Mexico, Trump tore it up.
If you want to keep track of the nuclear ambitions of Iran, you make them sign an agreement with many nations. Trump walked away from it. If you want to motivate the countries of the world to establish reasonable pollution control and climate change curtailment, you sign a Paris Accord. Trump walked away from it.
And now, Trump believes that the way to get the world’s economy under the control of American money is to slap tariffs on products from all the top economies of the world. What is a tariff? It’s a tax on imports or exports between sovereign states. It is a means to regulate international trade by taxing foreign products to encourage or safeguard domestic industry. Basically, we add taxes to products so that another country cannot undercut US products with a price advantage. This was first done by Alexander Hamilton to protect new companies from harsh competition.
Consider this. You bought a case of wine in France and tucked it into your luggage as you returned to the US. A customs inspector discovers your cache and analyzes it. Let’s say you bought a case of 36 bottles for two dollars a bottle. So, the value of your case is $72 and the tariff (really a fine in this case) is $8 per bottle or $288 for the case. Now, let’s further say you were bringing the case into America for a friend. Instead of charging your friend $72, you now must charge your drinking buddy $360 for the contraband you delivered. If we apply this to a real-world business situation, one might also have to charge the friend federal and state taxes on the goods, which would raise the cost even more. Yes, the treasury got the $288 in fees, but the tariff was paid by the importer, and the consumer reimbursed the importer for their costs. The money was a tax paid by the consumer and deposited into the treasury.
Now, if France got wind of this tariff and matched the tariff on something coming the other way, let’s say, a John Deere tractor, then their consumers would have to pay an increased price on the US-made tractor. But what if the French refused to pay the tariff and bought a Kubota tractor from Japan? That would mean the US manufacturer would lose the sale and the trade war would damage that company’s bottom-line. These complex layers of global trade are a great pitch to rabid political rally goers, but the consequences of knee jerk trade policies become highly problematic for our producers.
Idiot-in-Chief Trump has a fantasy dream that all the rustbelt states will bring back major manufacturing facilities and we will return to the calmer economy of American in post-war 1950s. This might sound like a great idea on the surface, but it took more than 70 years for these former US industries to be eliminated by sellers importing cheaper goods from other countries and that’s not a clock easily turned back.
Sure, the US could have been a protectionist economic force in the last 50 years, but the rest of the world wouldn’t have bought our expensive goods. Large markets such as China, India and Southeasts Asia would have simply bought items and sold products such as steel and aluminum to and from other nations. Our industries might have collapsed faster.
Instead of trying to bring back those high polluting industries, with no guarantee that we could even produce cheaper products, we need to look toward products of the future. To borrow a sports metaphor from famous hall of fame hockey star Wayne Gretzky, success is “not skating to where the puck was but skating to where the puck is going to be.” And that is precisely what we must do with our industrial developments and plans.
The world is migrating toward wind and sun energy. Why can’t we be the #1 producer of the gear to lead the planet to renewable energy? If the earth is all about technology, why aren’t we investing in education and finding the brightest and smartest inventors for the future? It’s a better investment than cranking up the coal burning power plants. Even investment in nuclear power plants makes more sense then putting money into old technology. We can produce without killing the world markets.
Most smart investors and economists understand how things work, but remember, they are never 100% correct. We have a president who thinks he knows everything about money and how to make billions, yet in his life he lost more than a BILLION dollars and paid no taxes for more than a decade. Sadly, his followers don’t care about the past. They don’t even care about the Mueller report. The reality is we all will lose money because of Donald Trump. WHY DO WE HAVE TO PAY FOR HIS MISTAKES? Hey, maybe that’s a good tag line for a political opponent’s commercial in 2020!
BRAND NEW BOOK ON AMERICA
Gold, God, Guns & Goofballs shows how we’ve wasted our GOLD on bad wars and corruption. While GOD is there for many people as a spiritual enrichment and the provider of glowing feelings, the truth is just praying and believing will not change our major arc. We don’t determine who gets a GUN. We aren’t sure if we have paramilitary groups ready to storm the White House or a White Castle. There is no control of weapons. The GOOFBALLS with the power constantly try to manipulate us into spending more money on bombs and tanks and wars. When all of our institutions are infected with neglect and fall in disrepair, we will only have ourselves to blame. This book is not an antidote for the left or right, it’s an accelerant to move the middle off their collective asses to go do something positive for America.