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Economy

Trump’s trade war, Harley-Davidson, and the coming depression

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After reaching record highs in January when the Tax Cuts and Jobs Act took effect, the DOW Jones Industrial Average has been on a downhill slide following Trump’s declaration of war against free trade.

Unfortunately, as we witnessed this past weekend, Trump isn’t showing any indication that he is prepared to “deal” in order to bring this self-inflicted war to an end. Instead, Trump threatened to level additional “tariffaxes” (H/T Shannon Joy for the cool new word) and “more” against any trading partner who dares to retaliate by leveling tariffs against the US.

Trump’s “Art of the Deal” approach to free trade is having an adverse effect on consumer prices. His first round of tariffs in January on solar panel and washing machine imports resulted in significant price increases. And Trump’s across-the-board tariffs on steel and aluminum in March are responsible for doubling the price of steel on US manufacturers and price-gouging by steel providers.

While the casualties in Trump’s trade war have been kind of “faceless” so far, that changed yesterday with the announcement by Harley-Davidson that the US motorcycle company would be moving more of its production outside of the US in response to Trump’s tariffs.

“To address the substantial cost of the tariff burden long-term, Harley Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden.”

Shortly after the November 2016 election, Federal Reserve officials expressed concern over Trump’s economic policies and how aggressive changes in the areas of taxes, spending, and trade could be come inflationary and cause interest rates to rise. With tariffs causing rising prices, and with the Federal Reserve raising interest rates, it would appear their concerns were justified.

Ever hear of the Smoot-Hawley Tariff Act of 1930? This law started out as a bill to raise tariffs on some agriculture products to protect farmers, but as big government is prone to do, it grew to protect a host of special interests affecting all sectors of the economy. By the time it reached President Hoover’s desk, Smoot-Hawley represented one of the largest tariff increases in history, and though they didn’t cause it, these tariffs are considered a contributing factor to the Great Depression.

By the way, Smoot-Hawley is an example of how tariffs are supposed to be created under the Constitution. Whether tariffs may be good or bad, they should originate in Congress and be signed into law, not arbitrarily imposed by the president.

Despite Trump’s sunny outlook about how trade wars are “good” and “easy to win,” could his “knee jerk impulses”—as the Senate Finance Committee recently described it—regarding tariffs be the final nail in the coffin that, when added to rising prices and rising interest rates, causes a recession or depression?

History isn’t on our side when it comes to answering that question.

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.

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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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