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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.

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Economy

Most Americans must pull their heads out of the sand on the national debt

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Most Americans must pull their heads out of the sand on the national debt

How do you stop any conversation at a cocktail party in America? Bring up the national debt. Boredom will overcome everyone listening as the complacency associated with a very simple topic that has been rendered falsely complicated sets in. Everyone will go glassy-eyed. People will nod in agreement while simultaneously not listening to anything you’re saying.

That’s the state of the national debt in the collective consciousness of Americans. Ask if it’s a problem and everyone will agree. Ask if it needs an immediate solution and most everyone will agree. Ask how they’ve voted to fix the problem or how they’ve demanded their leaders address the issue, and suddenly the drinks in their hands become much more interesting than they were moments before.

The problem with the debt isn’t that people don’t know about it. It’s that they just don’t care. Every American alive today who has paid even a little attention to the news in their lives has heard about the crippling effects of the national debt ever since the first real warning bells were sounded. Those bells rang out following the passage of the New Deal when expected GDP growth didn’t match expenditure growth. The result was the debt breaching the 40% mark of GBP. It was the end of the world for many economists who saw no way out.

At the time the national debt was 40% of GDP at $34 billion. Today, it’s 106% of GDP at nearly $23 trillion.

This is a problem that has no face, no tangible effects on the population, and no easy solutions. Entitlement reform is grossly unpopular, yet absolutely necessary to even start the process of fixing our debt issue. But entitlement reform would mean politicians would lose elections, most likely Republicans. Most of them have no intention of taking on something that’s desperately necessary yet immensely unpopular.

The Manhattan Institute’s Brian Riedl took to PragerU to discuss the omnipresent problem that nobody likes to think about. We need to start thinking about it immediately. Otherwise, the problem will “solve” itself.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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Democrats

More is never enough: AOC calls Amazon’s $15 per hour minimum wage ‘starvation wages’

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More is never enough AOC calls Amazons 15 per hour minimum wage starvation wages

What is the limit to how high many Democratic Socialists like Representative Alexandria Ocasio-Cortez want the minimum wage to go? More. It doesn’t matter how high it is. They’ll always want it to be higher. Never mind the economic consequences of increased costs. Does anyone really care if her policies would shut down many if not most small businesses? What’s wrong with exponential inflation as a result of devaluing wages by forcing the lowest level employees to make as much or more than skilled employees?

It’s all just details to Democratic Socialists. They want to attack the rich and destroy the poor. At least that’s what their policies would do whether they’re willing to acknowledge it or not.

The latest victim of AOC’s wrath is an old foe: Amazon. She and other socialists like Senator Bernie Sanders have been going after Amazon for a while. The latest insult hurled by the freshman Congresswoman is also an old one, though with new wording. She accused the e-commerce giant of paying their employees “starvation wages.”

Here’s the problem. Amazon has a self-imposed minimum wage of $15, the number Sanders, Ocasio-Cortez, and other Democrats have tossed out as the value they want for the national minimum wage. Amazon complied, but it wasn’t enough. In fact, they pay many of their workers higher and noted in a statement that they pay more as a starting point for employees in Staten Island near Ocasio-Cortez’s own congressional district.

“These allegations are absurd. Amazon associates receive industry-leading pay starting at $15 an hour – in fact, hourly associates at our Staten Island facility earn between $17.30 and $23 an hour, plus benefits which include comprehensive medical, dental, and vision insurance. On top of these benefits, Amazon pre-pays 95% of continuing education tuition costs through its Career Choice program for associates who want to pursue in-demand careers. For anyone who wants to know what it’s like to work in an Amazon fulfillment center, sign up for a tour today.”

That’s the thing with Democratic Socialists. Whatever demands anyone meets are yesterday’s demands. If they say they want $15 per hour and that gets delivered, they will not celebrate it as a victory for long. They’ll quickly turn around and demand $20 per hour. Why? Because more is never enough.

More is the starting point for Democratic Socialists. It’s also the middle; those who deliver on the demands of socialists will invariably be told the new demands are more. And more. And more.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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Democrats

Justin Haskins: ‘Socialism is completely antithetical to human nature’

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Justin Haskins Socialism is completely antithetical to human nature

Bernie Sanders has a vision for America. A path, as he likes to call it. This path is one that takes us down a winding road of “Democratic Socialism” all the while knowing the end result can be no different from every other path to socialism that has ever been tried. Socialism doesn’t work regardless of what path or which direction you take to get there.

But that’s not stopping proponents of Democratic Socialism, which seems to include the majority of the Democrats running for president today. Led by Sanders and his ideological cohort in the Senate, Elizabeth Warren, the notion that if you take from the rich by force and give it to the poor to “earn” their vote has become the calling card of the Democratic Party. It may have always been heading in this direction, but the 2020 election is shaping up to be either a full embrace of socialism within the party or the (hopefully) final mandate handed down from the people that America refuses to adopt the destructive tenets of a demonstrably poor ideology.

Anyone who thinks socialism will not come full circle if allowed to spring forth in part clearly doesn’t understand the nature of socialism itself. Once the seeds are planted by politicians, fed and watered by voters, and cultivated into laws, it begins the inevitable and unstoppable trend of self-sustained growth. A little socialism is like a plague that spreads until it is all-consuming.

The Heartland Institute‘s Justin Haskins joined Fox News host Tucker Carlson to lambaste the Senator’s repetitive talking points. He and others in his party want to win over the people by offering free stuff. Will voters fall for it?

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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