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How Harley Davidson may expose another problem with tariffs

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How Harley Davidson may expose another problem with tariffs

The logic that many on the right and even some on the left understand about tariffs is the increase cost to overseas producers inevitably falls back on the American consumer. This is the primary argument made by many federalist-minded Libertarians and Republicans who oppose President Trump’s continued embrace of the practice. As we’re now seeing, there’s a potentially bigger problem with these tariffs.

Instead of bringing jobs back to America, they can actually drive jobs overseas. Case-in-point: good ol’ American Harley Davidson.

The motorcycle company that for many embodies the American rebellious spirit is at a crossroads. The European Union has raised its tariffs on American-made motorcycles from 6% to 31% in response to President Trump’s tariffs on steel and aluminum.

US to hit EU with steel and aluminum tariffs, report says

https://www.theguardian.com/us-news/2018/may/30/trump-administration-tariff-steel-aluminum-eu-trade-tensionThe move is likely to bring retaliatory action from European Union trade regulators, who have warned they will target US products as motorcycles, jeans and bourbon if additional US tariffs are imposed.

Signs of increasing friction between the US and Europe over trade came early on Wednesday when Wilbur Ross, the US commerce secretary, drew a sharp line with the EU over Chinese trade negotiations, telling counterparts at a trade development panel in Paris that Europe is using tariffs as an “excuse” to refuse trade negotiations.

Predictably, Harley Davidson is in a precarious situation. They must decide whether to continue exporting to Europe and pay the tariff, which averages around $2,200 per finished motorcycle, or move a portion of their operations to Europe to avoid the tariff. While they’re unwilling to admit it at this point, the latter will almost certainly force the company to cut it’s American workforce and even shut down some of their domestic facilities.

This isn’t the type of result we were promised when the President was selling us on tariffs, but it was easy to foresee.

Free trade works when it’s done right

The President was correct when he bashed NAFTA and TPP. However, his reasoning for doing so was wrong. Free trade empowers the real job creators in US companies to put Americans to work. It also allows for many to move jobs offshore, but the benefits of a freedom in trade greatly outweigh the detriments. As some jobs move offshore, more jobs are subsequently created in America.

NAFTA and TPP were never really free trade agreements. NAFTA was trade redistribution that ended up being detrimental to the whole continent and TPP was a handover of power to multinational companies without the benefit of proper oversight. To use them as the reason for imposing harsh tariffs and abandoning free trade is a farce. As a self-proclaimed master negotiator,Trump should have made better deals and embraced free trade. Let Americans go head-to-head with companies in other nations. Put their cheap workforce against our innovations and financial prowess. That type of free trade is good for them and better for us.

Harley Davidson won’t be the last company forced to make hard decisions because of the tariffs. Our best case scenario is that damage can be mitigated and some jobs truly do come back. Unfortunately, that may be wishful thinking.

Reference

Harley-Davidson offers no further detail on overseas production shift as European tariffs take hold | PennLive.com

https://www.pennlive.com/news/2018/07/harley-davidson_offers_no_furt.html“We never contemplated moving our European volume out of the United States,” Olin said Tuesday.

“Consequently we’re analyzing the capacity options that we have… and we are working on the overall plans, and when we have them we’ll provide more information.”

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Economy

Trump blaming Federal Reserve for recession created by his trade war

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Trump blaming Federal Reserve for recession created by his trade war

Wall Street had another very bad day yesterday. How bad? Well, the S&P 500 fell to its lowest level of the year, and the Dow Jones Industrial Average lost over 500 points, bringing its two-day losses to more than 1,000 points after a bad day last Friday.

Actually, yesterday’s very bad day is only a snapshot of what is officially a very bad month for Wall Street and a very bad year for the S&P 500. The Dow and S&P 500 are on track for their worst December since the Great Depression in 1931, down approximately 7% so far for the month. And the S&P 500 is down over 4% for the year.

Meanwhile, the Federal Reserve is holding its last policy meeting of the year and will likely be announcing an increase in interest rates tomorrow due to economic uncertainty surrounding Trump’s trade war and a shaky global financial market.

So, it should come as no surprise that Trump spent time on Twitter yesterday spreading fake news about the imaginary success of his economic policies while simultaneously criticizing the Feds for tomorrow’s likely interest rate increase.

Trump’s attack on the Feds is not new. When the stock market’s 2018 gains were wiped out in October, Trump blamed Fed Chairman Jerome Powell, calling the man he appointed to the job “the biggest threat” to his success. He also issued a warning at that time that he might fire Powell.

I should note here that shortly after the 2016 election and before Powell was appointed, Federal Reserve officials were very concerned about Trump’s economic policies and how they would likely lead to inflation and higher interest rates. Maybe, instead of blaming the Feds for being right, Trump could admit he was wrong and end the trade war.

Yeah, like that’ll ever happen.

Trump’s “no inflation” claim is a complete fabrication; inflation has been steadily rising since Trump’s inauguration when it was around 1%.

The reality is that his trade war has been a primary driver of inflation and has grown to become the true “biggest threat” to the US economy. This threat so real that a majority of 134 business leaders recently surveyed — including executives from companies like Ford, Verizon, and Morgan Stanley — expect a recession to hit by the end of 2018. That’s two weeks, folks.

Meanwhile, Trump can’t really be bothered with the economy right now. He’s too busy tweeting threats against Saturday Night Live because they tell mean jokes about him.

Originally posted on StridentConservative.com.

 


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.

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Economy

Daniel Horowitz says what most lawmakers hope you won’t find out about the First Step Act

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Daniel Horowitz says what most lawmakers hope you won't find out about the First Step Act

When people hear that something has “bipartisan support,” they usually assume it’s a sign that it represents common-sense legislation that made all sides happy. The First Step Act, the latest iteration of criminal justice reform, isn’t one of those. It gives many lawmakers, especially those in the mushy middle, a campaign tool they can use to target minority voters.

This is a tactic often used by the left, but even some on the right are embracing it in hopes that it won’t be as bad as some experts believe. They’re betting on enough distance between the signing of the bill and the first instance of avoidable violent crime perpetrated by one of the criminals released under the new law. Their hope is that the “good” that comes from the bill overshadows the negatives and modern day mainstream media is likely to give them the cover they need.

Conservative Review’s Daniel Horowitz posted an article today pointing out the many foibles of this reform bill. It’s likely to pass despite opposition from some on both the far right and far left (for different reasons, obviously), setting the stage for dangerous criminals to be let back out on the streets sooner rather than later.

But it isn’t just the dangers that will be unleashed as a result. There’s a clear fiscal irresponsibility attached to the bill that nobody’s wanting to discuss. We should be accustomed to both Democrats and Republicans failing to safeguard the nation’s financial future, but doing so while simultaneously putting American citizens in danger is a bold new normal.

Here’s a poignant quote from the article:

“More crime, more gangs, more drug traffickers, more strained federal and state law enforcement, and we are all left with the tab for the welfare and increased crime.”

Read the whole thing. It’s worth it:

CBO: First Step Act will release dangerous criminals … and add to the deficit

https://www.conservativereview.com/news/cbo-first-step-act-will-release-dangerous-criminals-and-add-to-the-deficit/Even if one believes there are a few individuals here and there who can and should be released early, there is no denying that if you cast such a wide net of early release on such a sizeable portion of the most advanced felons in the country, it is a recipe for a public safety and law enforcement nightmare. As a group of police officer associations, narcotics officers, and federal prosecutors noted in a joint letter to the Senate, it will “have serious consequences upon public safety and the capacity of law enforcement to effectively respond” because the “releases will involve twice as many federal prisoners as those whose sentences were selectively commuted by President Obama throughout the entirety of his presidency.”

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Culture and Religion

Harvard students figured out why women are paid less than men

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Harvard students figured out why women are paid less than men

It genuinely disgusts me that, despite how much we’ve progressed as a society, especially in regards to our treatment of minorities and women, men still earn more than women do. It makes me ashamed of my country. How can we still refer to the United States as the “Land of Opportunity” when women are only paid $0.80 for every $1.00 that men are paid despite working just as hard in the same positions? Hell, even that depressing number doesn’t accurately express how large the gender pay gap is, according to the Institute for Women’s Policy Research.

In the report, titled Still a Man’s Labor Market: The Slowly Narrowing Gender Wage Gap, published in November 2018, the organization revealed that women earn a mere 49% of what men do. What’s worse is that it won’t be until 2059 that men and women have 100% equal pay, assuming the gap continues to narrow as slowly as it currently is. This is absolutely unacceptable, and it’s well past time Congress made it illegal for employers to pay women less than men for the same work.

At least, that’s what I would say if I was a leftist moron who still pays attention to the easily debunked “women earn less than men because of sexism” argument that’s been regurgitated countless times over the years.

The reality is that Congress made it illegal for employers to pay people differently based on their sex decades ago. It was called the “Equal Pay Act” and it was signed into law by President John F. Kennedy all the way back in June 1963. Ever since then, employers have been able to pay employees differently based on their merit, their seniority, their work output, or really whatever factors the employer desires… except sex.

A man and a woman in identical positions with identical output are legally required to be paid the same amount, and employers that fail to do so run the risk of some hefty legal ramifications. But if that’s the case, then why do the numbers presented by the IWPR show that there’s such a massive gender pay gap? Is the Equal Pay Act ineffective? Did the IWPR mess up its numbers? Is there some patriarchal plot to keep women from making money?

No, no, and no. The real answer is incredibly simple, and it’s one I’m sure most of us were able to figure out on our own the first time we heard the “women earn ($0.75, $0.79, $0.80) for every $1.00 that men earn” statistic that’s been getting thrown around for years. Basically, men are paid more than women on average because they seek out more lucrative jobs on average and work longer hours on average. If you take the combined earnings of all the women in the United States in a given year, divide that number by how many women worked at any point in that year, and then do the same for men, you’ll see that the earnings-per-working-woman are quite a bit lower than the earnings-per-working-man, so clearly there is a gender pay gap. However, despite what leftists like the people at the IWPR want you to believe, this gap has nothing to do with sexism.

This was demonstrated in a report, also published in November 2018, by two PhD Candidates in Economics at Harvard University. In the report, titled Why Do Women Earn Less Than Men? Evidence from Bus and Train Operators, the two students examined the Massachusetts Bay Transportation Authority in order to figure out why such a heavily unionized agency in such a notoriously progressive city (Boston) still paid its female employees $0.89 for every $1.00 it paid its male employees. The answer was, once again, incredibly simple. Women were less likely than men to work overtime hours while also being more likely to take unpaid time off. That’s it. That’s all there is to it.

Men tended to prefer making more money to having more free time, while women tended to prefer having more free time to making more money. While an argument could be made that more employers should account for the different preferences of men and women, something the report actually advises on how to do, there’s no basis for the argument that the gender pay gap is a result of sexism.

It should be noted that the Harvard report examined just one industry in one metropolitan area, which means the findings aren’t applicable everywhere, but the gist of them is. Yes, there is a gender pay gap. That’s an objective fact. However, it has nothing to do with sexism. The causes of the gap vary from industry to industry and place to place, but they almost always have to do with the inherent differences between men and women. I think there’s a conversation to be had about whether or not this is an issue, and if it is, whether it’s up to employers, society, or women themselves to solve it, but to even have that conversation requires us to abandon the idea that sexism is the cause. There are certainly some instances where it is the cause, but the vast majority of the time, it’s not.

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