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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.

Economy

Dear America: The GOP tax cuts have helped nearly all of you

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Dear America The GOP tax cuts have helped nearly all of you

It really shouldn’t be the job of a small news outlet to tell the American people they are saving a lot of money because of the tax cuts the GOP enacted last year. It also shouldn’t just be us reminding people that job growth, pay increases, and those unexpected bonuses they’ve been receiving have been a response by corporate America to the tax cuts.

Unfortunately, one of the Republican Party’s biggest weaknesses is rearing its ugly head with two weeks left before election day. Their inability to educate the people about something as basic yet important as tax cuts is the second biggest reason (hatred by the left for President Trump is the biggest) a blue wave may be on our horizon. I’m leaning away from believing the blue wave will manifest anywhere near the degree that many analysts are anticipating, but the fact that there’s a potential for a blue wave at all is a direct result of the GOP not knowing how to explain tax cuts to the American people.

The tax cuts were far from perfect, but they had a dramatic effect on many aspects of the vast majority of American families. This was the thunder the GOP needed for these elections and they’ve squandered them. The saddest part is that their quiet roll out last year was because even Republicans underestimated the impact. They downplayed it all because they didn’t know corporate America’s response would be so powerful.

Roll back the clocks. It’s a month after the tax cuts were signed and at that point dozens of major companies had announced some variation of “giving back” to their employees. Some gave bonuses. Others gave raises. It was a welcome bit of extra cash just before the holidays. Mainstream media couldn’t help but report most of it because they were that significant.

Most Republican law makers and analysts said, “See, told ya so!” Unfortunately, they moved on. They fell into one of two camps with their assumptions. Some thought the American people were aware because the news they were watching was filled with talks of the tax cuts’ effects. The others assume the American people will never really understand it.

Both were wrong. They’re always wrong when it comes to understanding what the American people know and how to make them know more.

Now, we’re two weeks away from the election and many Democrats are actually running on REPEALING the tax cuts.

Tax cuts a bust for Republicans in midterms

https://www.politico.com/story/2018/10/22/tax-cuts-republicans-midterms-921903“Had they done what the Bush guys did by making it advance-able and giving everybody a ‘Trump check,’ then maybe people would have had something a little more tangible,” said one Republican on condition of anonymity. “Otherwise, it’s like, ‘Take a look at the third line down on your paycheck every other week.’” And Democrats, to the surprise of some, remained unified against the law.

They’ve pilloried the cuts as a gift to the rich and to corporations. Even an internal Republican National Committee poll leaked last month to Bloomberg News conceded has been effective at shaping perceptions of the law as a giveaway to the rich.

There were many ways to educate the people, but they lost the “information war” to the Democrats. Now, tax cuts are being painted as a gift to corporate America with no benefit to the people.

The GOP expected people would understand the benefits of cutting their taxes. They thought they’d look at their paychecks and see a difference. They thought the people would attribute job growth to the tax cuts. They even through people would read the news thoroughly and properly translate quotes from obscure CEOs.

Some Republicans gave the people too much credit for researching this on their own. Others didn’t give them enough credit and didn’t even attempt to explain the tax cuts. Both groups have failed their party and left Americans in the dark.

Whether through direct increases in take-home pay or through trickle down effects of business growth, the tax cuts have helped Americans and the economy. If the GOP knew how to communicate that, talk of a blue wave would have died from the start.

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Democrats

PragerU: What’s wrong with government-run healthcare?

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PragerU Whats wrong with government-run healthcare

This latest video from PragerU details how another vote-buying pipe dream from the Left can never work.

A new video from PragerU features policy expert Lanhee Chen from the Hoover Institution at Stanford, who explains how ‘Free Healthcare’ can never work in the real world. As is the case with most Leftist vote-buying schemes, the ‘The Medicare for all’ fiction is long on promises and short on how it will be funded. The tax burden for such a scheme would destroy the economy and would have to be levied on almost everyone. This kind of national socialized healthcare would also take away the incentive for innovation, which has made for the best healthcare system in the states and the rest of the world.

One often suspects that these assurances of freebies are never meant to operate as promised. Witness the much vaunted Obamacare that was supposed to eliminate the uninsured, but did nothing of the sort. Such is also the case with their push for Liberty control, since it never works as advertised.  In most cases, it should be apparent that the Left doesn’t care if their schemes will work or not. If they did actually care, they would try something else, something that actually works.

For the Left, their ‘Ends justifies the means’ mantra extends to most of their agenda. It doesn’t matter if their system of societal slavery works or not, only that it brings them the power they crave.

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Economy

Wayne Dupree on cutting entitlement programs

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Wayne Dupree on cutting entitlement programs

When the truth goes against the narrative, it’s hard for many to swallow. Entitlement reform, which has been on the Republican platform for decades, has been in the perpetual state of always getting promised but never getting delivered. The reason it keeps getting kicked down the road is because it’s simply too hard to take away things that millions have gotten used to receiving.

At least President Trump was honest enough to say from the beginning that he wasn’t touching entitlements.

What Democrats don’t want you to know and what Republicans only want you to remember on election day is that entitlements are crippling the economy. We can no longer say they’re going to hurt our children and grandchildren. It’s now to the point that we can’t make fiscal decisions as a country without considering the huge chunk that encompasses entitlements.

Conservative Radio Host Wayne Dupree has been fighting this battle for a while. He rightly contends that the pain we’d feel today if entitlements were cut is small compared to the pain we’ll feel in the near future and beyond if they’re not cut.

Yes, it’s hard to make cuts to something that supports millions of Americans, but there are ways to reform the system and still protect the most vulnerable. Kudos to Wayne Dupree for fighting this unpopular battle.

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