TRUMP’S TRADE WAR

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.

Get the Kindle Version HERE. Or order your paperback edition HERE.


THE MATH FREE PRESIDENT

Trump Doesn’t Understand Economics

Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi had as many names as he had schemes to bilk people out of their money. You probably know him as Charles Ponzi and, yes, the “Ponzi Scheme” was named after him. Many of Donald Trump’s fiscal moves can be traced back to this famous Italian conman.

Let’s mix in some words here from Plato’s character Phaedrus. “Things are not always what they seem. The first appearance deceives many. The intelligence of a few perceives what has been carefully hidden.” If just one person had seriously questioned Mr. Ponzi early on, he would have never been able to get away with his plot to defraud people out of their life savings. Sooner or later, someone must pay up.

Plato also warned us that we shouldn’t judge a person, or an idea based on what we first think. We can go from 400 B.C. (Plato), to the 1900s (Ponzi), to 2008 (Bernie Madoff), to 2016 (Donald Trump) and see con artists trying to convince us that we are going to benefit from their special ruses.

One of Trump’ tricks is a spontaneous burst of an opinion during one of his rallies that then gets baked into his routine, that then becomes policy. The game of chance that this man is playing with the world-wide economy is treacherous.

Donald Trump probably had a difficult discussion with someone on his team who disagreed with him on his tariff ideas. He caught everyone else in the White House off guard by blurting out his decree in a meeting. Without any details, he simply peed on the tree to claim ownership of his turf on this subject. He said, in a forceful kind of disagreeable manner, that the United States would be placing a 25% tariff on steel and a 10% fee on aluminum. And the stock market freaked out.

Rather than weighing the pros and cons to develop a logical argument for doing this now, when the Fed is about to raise interest rates, and explaining his position to the American public, Trump just blasted out his new “plan,” which seems devoid of any sane rationale.

Much like your drunk Uncle, who sits on the front porch railing against all our products coming from other countries, there is little desire by the Donald to understand how and WHY this has happened. Rather than trying to change a worldwide economic trend with a RULE, Mr. President, why not know the side effects of your “remedies” before making everyone in the country swallow your bitter pill? It’s ironic that the cure for the “rest of the world taking advantage of us in trade” is a rule. Deregulating has taken on this “for us only” status. Strange.

Forcing protectionism on the rest of the world might make Donald Trump feel good personally, but if it leads to trade wars we will all have to pay. Consider Trump’s “clean coal.” It’s a chemical myth to help an industry of 51,000 workers when wind energy is already supporting 100,000 jobs in the renewable fuel industry. Then there’s the Donald’s plan to protect 100,000 steel jobs, while hundreds of thousands of building projects will have to cut jobs to pay for the increased cost of metals. America doesn’t make enough steel and aluminum to provide resources for all the ongoing projects. And while we scramble to build and reopen plants, the President’s measures plunge us into inflationary turmoil.

The weekend brought early sparks of a retaliatory trade war with the European Union’s discussions of taxes of their own. Then Trump tweeted: “If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

Once again, our President has decided he knows best and his actions will make everything cost more. And who must pay more? The people Trump and Congress just awarded a big tax cut will now get to pay more for everything we buy.

Donald J. Trump doesn’t know anything about economics. He’s the big orange kid who has been living in a bubble his whole life. He talks with other rich men who breathe that same uninformed air of how economies work. Trump is in violation of one of the most important aspects of our economic model. Like a balloon, pushing too hard on one side will force a change on the other. When you make changes, you should do so gradually, measure whatever fallout takes place and then make appropriate adjustments.

What Donald Trump has miscalculated is that no one in the world respects him or cares about his insane attitudes and beliefs. They won’t even blink when given the opportunity to make him look bad. The will add tariffs to make it harder for him to bully them. And when Trump has his next corporate CEO meeting at the White House, those white-collar, button-down leaders will have no problem explaining it all to him. In their minds, this will be a rich payback for all the tough love they have received from their public board of directors. Payback is a bitch, Donnie.

Ponzi was an unbelievable scheme, but people fell for it. Bernie Madoff was able to trick the richest people in New York. And Donald Trump is still fooling 35% of the country. The bad news is all of us will have to pay for his Trade War, while he will continue to promise more unbelievable benefits.

 

The First 200 Days Of Trump – ONLY ONE MILLION LEFT

These daily diatribes from a delusional blogger give you a day by day overview of the 45th President’s first two-hundred days in office. Follow Donald Trump through the tough times on his way to impeachment. Kindle Version HERE, or Get the printed book now, CLICK HERE.

 

New Book about Terrorism

One of the most eye-opening stories about terrorism. The famous cable TV talk show host, Jonas Bronck, leaves New York on his quest to find truth. He finds himself in the middle of terror and personal torment in the name of journalism. He once again asks, If God Could Cry, would he be crying for us, or with us?

Now available on Amazon.