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Economy

President Trump, this is what happens when you meddle in the economy

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President Trump proved me both wrong and right simultaneously this week: right because the consequences of his actions are precisely what I predicted they would be if he decided to go there, and wrong because for some reason I haven’t fully accepted that if you don’t think Trump will do something, he almost inevitably will.

Earlier this week, I was discussing the highs and lows of a Trump presidency with my co-workers. Some of the major highlights of his rookie year in office were the massive rollbacks in business regulations and record-breaking stock values. I argued that the market’s rise can be attributed not necessarily to anything Trump has done, but specifically to what he hasn’t done. Where investors are confident that they will not be burdened by regulations, penalized for expanding their wealth, and sideswiped by unpredictable and unstable economic policy, they feel confident investing in the economy, and the national market booms.

Any time the government gets overly involved in business, business declines — especially to the detriment of middle-class workers. This has been established time and time again through the Smoot-Hawley Tariff Act of 1930, mandatory wage and price controls under Hoover, the Wagner Act of 1935, the Bush tariffs of 2002, subsidized subprime mortgages leading up to the 2008 housing crisis, and the Fight for 15, which is estimated to cost around 400,000 low-wage jobs by 2022 in California alone.

My co-workers agreed. Not only is it logical, but it’s observably true. The 1987 crash could’ve had far more dire results, after all, if Reagan hadn’t kept his distance from corrective measures.

But leave it to Trump to ruin one of the approximately four good things he had going for him.

When the president announced on Thursday that he would be imposing steel and aluminum tariffs, the Dow Jones nosedived 600 points, recovering about 150 of those by the end of the day. This just one week after his announcement of the imposition of solar panel and washing machine tariffs.

All told, the Dow has fallen 1,200 points since Monday, and it will be far worse once these tariffs are officially imposed. Investors are uneasy, but they can at least hold onto a semblance of hope that the president can be talked out of his suicide mission.

Not only is Trump’s claim that a country without steel isn’t really a country patently ludicrous, but so is his assertion that we can have free, fair, and smart trade together. “Fair” means “controlled;” “smart” means controlled;” “controlled” means “not free.”

As for his claims that the steel industry is in bad shape, he apparently hasn’t cracked open a single study on the matter. As amassed by Daily Wire, steel production rose last year, the U.S. handily controls the market on steel, the nation’s leading steel manufacturers have seen exponential growth in stock, earnings, and wages, and by and large any loss of steel jobs can be attributed to technological advancements (which lead to job growth in other fields) rather than trade deficits.

Speaking of supposed trade deficits, President Trump claims that spending more on a country’s goods than they spend on ours is “not fair or smart.” This is a fundamentally flawed approach to business. I’ve given far more money to Costco than it’s given to me, but presumably, I chose to spend that money because I valued the product higher than the purchase price. In a voluntary transaction, assuming no fraud, both sides are better off.

Trump’s insistence on “America First” to the detriment of America reminds me of one of my local city council members, who campaigned (and won) on the promise that she would only shop within our city limits, even cutting up her Costco card (the nearest Costco is two cities away, a roughly fifteen-minute drive) to emphasize the point.

Here’s the problem: there are hardly any shops or restaurants in my city, due to exorbitant taxes and a hostile business environment. We boast a half-dozen chain restaurants and a Wal-Mart next to our freeway exits, but everything else is an absurdly priced mom and pop shop, and I don’t have the money for that kind of constant virtue. As such, my wife and I almost exclusively drive two cities up on date nights to where we can find virtually every kind of restaurant and store we could hope for.

Capitalism thrives on providing the greatest service for the lowest price, incentivizing innovation and public accommodation. Trade wars excuse local stagnation, allowing businesses to become complacent and cease to progress. That is not good for any economy.

Moreover, foreign imports affect domestic jobs far more than Trump gives them credit for. Tariffs incur higher costs on manufacturers, making production more expensive. This will lead to either price hikes, wage cuts, layoffs, or a combination of the three. Steel tariffs will cost thousands of American auto jobs, and aluminum tariffs will force significant layoffs in the beer industry.

This is rudimentary economic awareness, of which it appears Trump has none.

Finally, this proposal has major international implications. Jean-Claude Juncker, president of the European Commission and leader of the E.U., has declared that if Trump wants a trade war, he’ll get one, according to a New York Times report. Juncker has announced tariffs on Harley-Davidsons, bourbon, and blue jeans, with an intention to match trade penalties tit for tat with the United States.

Still, Trump insists that “trade wars are good and easy to win.” Perhaps he could name one if he’d ever read a book.

One of the great lies of modern America is that free markets led to the Great Depression. In reality, a crash that could have ended after only a moderate recession resulted in a massive, decade-long depression thanks to government intervention by way of a trade war, job stimulus, and the New Deal, and it only ended thanks to World War II’s global devastation and its reallocation of twelve million workers into the military. Trump is on the verge of creating his trade war, and with his proposed $1 trillion infrastructure package, look for the sequel to the Hoover Dam.

If Trump continues down this path, things will get much worse before they get better. Hopefully, if dissenting voices are loud enough, the president will be dissuaded from this disastrous course.

Those who don’t know history are doomed to repeat it, and those who claim to not read books because they already arrive at correct decisions “with very little knowledge other than the knowledge I [already] had, plus the words ‘common sense,’ because I have a lot of common sense and I have a lot of business ability,” don’t know history and clearly don’t know economics.

Richie Angel is a Co-Editor in Chief of The New Guards. Follow him and The New Guards on Twitter, and check out The New Guards on Facebook.

Richie Angel is a Co-Editor in Chief of The New Guards, Co-Host of The New Guards Podcast, lifelong fan of the Anaheim Ducks, and proud Hufflepuff. He graduated Magna Cum Laude in English from Brigham Young University in 2017. One day later, his wife gave birth to a beautiful daughter. Richie is a constitutional conservative and doesn't see any compassion in violating other people's rights.

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Economy

Obamanomics damaged the economy, and Trumponomics isn’t fixing it

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While Trump and the GOP want you and me to believe that Trumponomics has singlehandedly saved the US economy by reducing taxes and creating jobs, the reality for those of us living in the real world is quite different.

It was Mark Twain who once said, “There are three kinds of lies: lies, damned lies, and statistics.” When it comes to politicians in an election year, Mr. Twain could have been describing the Washington establishment owned and operated by the Republicans and Democrats.

No doubt you’ve heard the much-ballyhooed news that unemployment has dropped to its lowest level since 2000, coming in at 3.9%. But just as it was when Obama manipulated unemployment numbers to cover his pathetic economic policies, this recent jobs report has been manipulated to hide the truth about our very unhealthy economy.

Unemployment numbers can change for any number of reasons:

  1. People move from the unemployed category into the employed category
  2. The number of employed grows faster than the number of unemployed
  3. You simply add people to the employed category without changing anyone’s status
  4. You simply stop counting people in the unemployed category, making them magically disappear

When we consider that the number of jobs added in April was 164,000 while the number of unemployed dropped by 239,000, we can conclude that reason #4 is how the latest unemployment rate was manipulated to make things look better than they really are. Unemployment went down because the labor-participation rate fell to 62.8 percent after being 63 percent in February and 62.9 percent in March. Three consecutive months of declines.

Quite simply, when you are no longer working or looking for work, the government no longer includes you as a part of the equation to calculate the unemployment report.

Meanwhile, Trumponomics is also creating a slower growth rate than Trump is claiming while his tax cuts and record government spendingdespite the recent rescission cuts—is creating another threat to the US economy, an apocalyptic debt spiral adding trillions to the already unsustainable national debt.

Obamanomics caused a great deal of damage to the US economy, but Trumponomics isn’t doing anything to repair it; in fact, Trump’s plan will likely destroy what’s left of it.


Originally posted on The Strident Conservative.

 

David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

Follow the Strident Conservative on Twitter and Facebook. Subscribe to receive podcasts of radio commentaries: iTunes | Stitcher | Tune In | RSS

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Democrats

Forget lowering unemployment, Bernie Sanders will eliminate it!

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During his 2016 Democrat primary campaign, Bernie Sanders was “absolutely sympathetic” to the idea of a universal basic income; however, he felt that his plans for a $15/hr. minimum wage, expanding Social Security to pay for guaranteed healthcare, and providing free college would do more than creating just another government handout.

But now Bernie has apparently found a way to accomplish his goals as well as the goals of the universal basic income crowd.
Yesterday, we learned that the self-proclaimed Democratic-Socialist is ready to announce a plan that will guarantee every American “who wants or needs one” a lifetime government job paying at least $15/hr. and proving paid family and medical leave plus retirement, health, and vacation benefits.

While the details are still being worked on, Bernie has admitted that he currently has no idea exactly how much his plan will cost or where the money to pay for it will come from. However, if his 2016 campaign is any indication, the cost will be irrelevant, and the money to pay for it will come from “the billionaires and oligarchs” he refers to as the “top one percent of income earners.”

While it would be tempting to shrug off Bernie’s plan as the rantings of a socialist loon living to the left of the left-wing, we should remember how his Marxist beliefs concerning income inequality caught fire with a generation of Constitutionally ignorant voters raised on the socialist ideology taught in today’s public schools indoctrination centers.

And a poll conducted during the 2016 primary season showed that a majority of millennials rejected capitalism.

Democrats would see a huge voter advantage by creating a new state-run workforce dependent upon them for their jobs. And politicians from both parties would have a new voter-bloc to advance their ideological and political agendas.

Bernie’s plan is being called a guaranteed-jobs program, but the only guarantee it gives us is the destruction of capitalism and Constitutional America.


Originally posted on The Strident Conservative.

 

David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

Follow the Strident Conservative on Twitter and Facebook. Subscribe to receive podcasts of radio commentaries: iTunes | Stitcher | Tune In | RSS

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Culture and Religion

PragerU: As the Rich Get Richer, the Poor Get Richer

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The rich are getting richer, and the poor are… also getting richer. What’s driving this wealth creation process? In this video, Daniel Hannan explains why it is capitalism — and capitalism alone — that has led to the unprecedented enrichment that is the central fact of Western life.

As the Rich Get Richer, the Poor Get Richer

Published: Apr 9, 2018

 

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