Connect with us

Economy

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

Published

on

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.

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

Advertisement

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy

What the partial government shutdown reveals about American’s finances

Published

on

What the partial government shutdown reveals about Americans finances

The partial government shutdown has been going on for nearly a month, with no end in sight. About 800000 government workers, according to politicians, are essentially getting paid not to work, but their paychecks won’t come until after the partial shutdown is over. Politicians are using this plight to tug at the general public’s heartstrings in the direction of their agenda. However, every politician and almost every media outlet is ignoring truth, to avoid offending people.

The truth of the matter is: if a person doesn’t have enough money saved up for such a time as this, they suck with finances. If a family is woefully unprepared for an emergency situation, they suck with money. These are objective facts, even Biblical. However, I do not write this to shame those 800000 government workers. After all, the crocodile tears of politicians would be wholly ineffective, if the average American could not see the horror is a month’s wage deferred. American’s finances are in disarray to put it mildly. NBC News reported how majority of Americans are living paycheck to paycheck.

Though the parameters of what constitutes a livable wage varies greatly according to where you live, these staggering statistics show just how few of us have the means to make ends meet. Depending on where they live, even people who earn $100k per year say they’re living paycheck-to-paycheck, and 59 percent of people making that kind of money admitted to carrying debt. Of those 59 percent, 56 percent say they’re heavily in debt.

And that emergency stash of six month’s pay that experts keep saying we should put away? For more than half of us, it’s just not feasible. According to this survey, 56 percent of us can barely save $100 per month. All things considered, when you break it all down, most of us are just one misfortune away from financial oblivion.

Yet despite the woeful unpreparedness of most Americans to finance an emergency, Americans spend. We have the latest IPhone, subscribe to Amazon Prime, have $200 doorbells on our homes, dine at fast casual restaurants, and drink Starbucks. And despite mandatory financial literacy classes in many schools, we push young people to pursue a six figure education. A recent survey done by YCharts found that nearly two-thirds of millennials aged 22 to 37 believed that they would have seven-figure wealth by the age of 45 or sooner. While seemingly outlandish, this study presented a more optimistic view of the generation’s finances than one might expect. Though with similar spending habits as Gen Xers, it’s overoptimistic to think this generation doesn’t overspend.

We often joke about Congress not balancing the budget like normal people run their finances. Yet in a country and culture of fiscal irresponsibility, it should be unsurprising, though disappointing, that there’s 21 trillion dollars worth of debt.


Subscribe on YouTube

Continue Reading

Economy

A reminder to GOP lawmakers from Justin Amash

Published

on

A reminder to GOP lawmakers from Justin Amash

When Representative Justin Amash (R-MI) hadn’t been in Washington DC for very long when he said this amazing quote. At the time, many weren’t paying much attention. After all, many Republicans say similar things when they get to DC, but over time they become jaded, corrupted, or start to get used to being in the DC Country Club.

Amash is different. He has remained consistent with his message and views throughout his career. Now, it’s time for other Republicans to remember what they were sent to Washington DC to do in the first place. Defense of the Constitution is their top priority as it’s the best protection against a government that wants desperately to control every aspect of our lives. From healthcare to the internet to how we use our energy, government intervention has become so commonplace, it’s often hard to see the fabric of our nation behind all the layers of bureaucracy that has been placed on top of it.

“I follow a set of principles, I follow the Constitution. And that’s what I base my votes on. Limited government, economic freedom and individual liberty.”

If more Republicans followed the same principles and didn’t just use them in campaign speeches, we may actually be able to return liberties that have been taken and remove layers of government that have been formed unnecessarily.


NOQ Report Needs Your Help

Continue Reading

Economy

Larry Elder, Sean Hannity discuss the shutdown

Published

on

Larry Elder Sean Hannity discuss the shutdown

Radio host Larry Elder joined Sean Hannity on Fox News tonight to break down the government shutdown. Elder pointed out that President Obama was being urged by advisers, including Rahm Emmanuel, to abandon Obamacare, but Nancy Pelosi urged him to go big or go home.

Later, they discussed the Speaker of the House’s refusal to meet with Angel Moms. Elder asked what she would say to them. Hannity said she should have given them condolences for their losses.

My Take

The talking heads on Fox News keep repeating the same narratives, but it’s not working. This is an example of mainstream media playing to the base by repeating the narrative for cheers from the crowd but failing to present better information the Republican base can use to argue for the border wall.

Many on the right, particularly in media, are failing to make a compelling case for the wall. They need to adjust their talking points if they really want their audience to help sell the idea to the rest of America.


NOQ Report Needs Your Help

Continue Reading

Facebook

Twitter

Trending

Copyright © 2019 NOQ Report