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Tariffs on Turkey: Bad for the economy but damaging to a dangerous dictator

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Tariffs on Turkey Bad for the economy but damaging to a dangerous dictator

Say what you will about President Trump’s foreign and economic policies. Whether you support them or not, it’s hard to deny that they’ve made things much more interesting.

The latest move by the President to impose stiff tariffs on Turkish steel and aluminum may seem in line with how he’s been treating the national and world economies recently, but more is at stake with this move than previous ones.

There are two factors at play that make this move different from previous tariffs. First, it is not purely economic but is a response to Turkey continuing to hold pastor Andrew Brunson for allegedly supporting the coup attempt of 2016. Second, the tariffs come at a time when Turkey’s currency, the lira, is in free fall.

It was already starting to show signs of failure when leaders from both countries pushed it even further down. Turkish President Recep Tayyip Erdogan added more challenges for the lira when he asked his people to convert their foreign currency and gold, a sign of trouble that will likely have the opposite effect.

Erdogan calls on Turks to convert hard currency, gold into lira

https://www.reuters.com/article/turkey-economy-currency-erdogan/erdogan-calls-on-turks-to-convert-hard-currency-gold-into-lira-idUSA4N1TM024Turkish President Tayyip Erdogan on Friday called on citizens to convert their hard currency and gold into lira, after the local currency tumbled to a record low this week, reflecting investor concern about a widening diplomatic rift with the United States.

Erdogan, in a speech in Ankara, also said Turkey was diverting to the Chinese market to overcome what he said were “subjective evaluations” from ratings agencies. Erdogan has repeatedly railed against credit raters, saying their downgrades of Turkey’s sovereign debt to “junk” status were politically motivated.

Seizing on the free fall, President Trump made matters worse for for the lira with the sanctions:

Trump authorizes doubling of metals tariffs on Turkey

https://www.cnbc.com/2018/08/10/trump.html“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!” Trump wrote.

Losses in the the Turkish lira deepened on Trump’s tweet, falling as much as 20 percent vs. the U.S. dollar in Friday trading.

Erdogan is now calling this an economic war with the United States and claims he will not back down. Meanwhile, the Euro and other currencies are also feeling the heat:

Euro tumbles as investors fear bank exposures to Turkey

https://www.reuters.com/article/uk-global-forex/euro-whacked-on-turkey-turmoil-as-investors-scramble-for-safety-idUSKBN1KV07M“You’ve had a fairly sharp move lower in the euro and it’s broken through key technical levels as well,” said Richard Franulovich, head of FX strategy at Westpac Banking Corp in New York.

The euro dropped below technical support at $1.15 to $1.1421, down 0.91 percent on the day and the lowest since July 2017. Against the yen, the euro slid 1 percent to 126.79 yen, a two-month low.

Now, the criticism and praise of President Trump’s moves will be debated for days, maybe weeks.

My Take

As I’ve stated on many occasions, I’m not a fan of tariffs. They are misunderstood by most, particularly the President, and no longer yield the results they did in previous centuries. From an economic perspective, I oppose this move.

The bigger picture is how this is being used as a pressure tactic against Turkey. Currently, I like it a lot. That opinion could change based on how things go, but moves like these that apply pressure against a dangerous dictator of the false ally that Turkey has become are welcome. It isn’t just about securing Brunson’s release, though that’s extremely important. Turkey is a rising power on every spectrum that is increasingly turning to Russia and China for help instead of their “friends” in NATO.

The strategic importance of Turkey as a hub that connects Europe, west Asia, and the Middle East cannot be understated. In an ideal situation, Turkey would still be a good ally as they once were. Erdogan has taken advantage of two past U.S. Presidents and seemed poised last year to start taking advantage of President Trump. That doesn’t seem to be happening anymore.

Is this the right way to handle Erdogan? Probably not. Whether it is or not will be revealed in coming weeks. One thing is certain: we’re seeing things being done from the White House that we’ve never seen before and may never see again. It’s troubling, but at least it’s entertaining.

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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Economy

Trump’s best fiscal move yet: Telling his cabinet to shave 5% off their budgets

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Trumps best fiscal move yet Telling his cabinet to shave 5 off their budgets

I’ve been harsh towards the President when it comes to budgets and deficits. At times he has seemed more like President Obama, albeit reluctantly, with outrageous budgets signed and deficits that would make Democrats blush. His latest move is one that I can support wholeheartedly.

He just told his cabinet to shave off 5% from their 2020 budgets.

Trump asked members of his cabinet to figure out how to cut 5 percent of their budgets

https://www.theblaze.com/news/2018/10/17/trump-asked-members-of-his-cabinet-to-figure-out-how-to-cut-5-percent-of-their-budgetsI’m going to be ask each of you to come back with a 5 percent budget cut from your various departments, whether it’s a secretary or administrator, whatever. I’m going to ask everybody to come back with a 5 percent cut for our next meeting. I think you’ll all be able to do it. There may be a special exemption, perhaps. I don’t know who that exemption would be. If you can do more than five, some of you will say ‘hey, I can do much more than 5.’

Most conservatives would point to last year’s tax cuts as his best fiscal move, but it was really an action by Congress. The White House gave input and helped sell it to the people, of course, but it wasn’t really a “move” made by Trump. We’ll give him some credit for it, but most of the heavy lifting was done on Capitol Hill.

Telling his cabinet to cut 5% across the board is a Presidential move and by far his best fiscal decision to date. The key to this will be follow-up; if he doesn’t hold his team accountable, then it was simply a soundbite. If he holds their feet to the fire and dishes out repercussions to those who don’t comply, then this will represent a seismic shift in the way the White House operates.

It’s a business move made by a businessman who has had to make this move many times in the past. He brought several things to the table shifting from the boardroom to the Oval Office. Second only to his deal-making skills are his skills in operating a sound financial operation. This is indicative of his experience.

To be fair, this is more of a campaign move than an expression of conservative fiscal values, but we’ll take it no matter what motivated the move. 2020, the target for these cuts, is his reelection year. Hitting the stump and talking about how he forced every agency and department to cut their budgets by 5% will go a long way towards wooing conservatives.

One of the biggest reasons Americans put Donald Trump in the White House is because of his business acumen. This move exemplifies why millions trusted him to sit in the Oval Office. With budgets where they are, DC must cut, cut, and cut some more.

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