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I’m a free trade capitalist, but I’m backing the President’s China play

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Im a free trade capitalist but Im backing the Presidents China play

Fiscal conservatives may be prepared to pounce, but they’ll need to hear me out. Fans of President Trump’s “fair trade” tariff policies may be ready to cheer, but they should also read further before jumping up and down. I’ll keep this very short before I change my mind.

I’m a free-trade-loving, fiscal conservative capitalist who thinks tariffs are the work of progressives who want to generate revenues any way they can to help fund their big government ambitions. For the last three years, I’ve written many articles calling on President Trump to back down from his tariff plans and promote stronger incentives for America-First business practices. If you want businesses and jobs to come back to America, cut taxes even more. If you want to promote industries like steel and agriculture, cut taxes and use our technological and logistic advantages to overcome the cheap labor offshore. There are ways to achieve the President’s goals without making Senator Chuck Schumer giddy over the adoption of his Chinese tariff plan by a Republican President.

But here we are. The trade war has been building up with trade skirmishes and economic battles for over a year and we’re now in the early stages of an all-out trade war. It’s not the call I would have made, but now that it’s happening, we have to go all out. Half-measures will fail. If we’re going to get back to the proper path of free trade and dominance of the global market from where we are today, then the fastest path is to ramp up pressure on China using Trump’s (well, technically Schumer’s) tariff technique all the way through.

The reality is this: China will blink first. For political reasons, the President needs them to blink before the 2020 election season, which means putting our economic might up against their economic size. They are already showing signs of weakness, from retail sales growth hitting a 16-year low to a yuan that was showing weakness even before the tariffs started making a real impact.

Some are expecting China to sell off Treasuries. They might. If they do, it won’t be out of retribution even though most mainstream media outlets will report it as such. They’ll sell off Treasuries (which they’ve been doing little by little for a while already) to prop up their currency, not to hit back at President Trump.

“China selling Treasuries is a risk, but it would have less to do with any retaliation they might pursue in response to tariffs and more to do with managing their currency,” said Gene Tannuzzo, deputy global head of fixed income at Columbia Threadneedle Investments. “But if the capital account is leakier than they want it to be and they have to defend the yuan, then they’d need to be selling Treasuries.’’

As Jeffrey Black and Xiaoqing Pi noted over at Bloomberg yesterday, China’s economy is showing weakness at the worst possible moment. This may be why President Trump is confident enough to make this risky play before his reelection.

Faltering credit and consumption at home coupled with a weaker global economy means China is running out of steady growth engines right when it needs them. The soggy data spurred expectations the government will need to boost stimulus to cushion the blow from the escalating trade war, sending Asian stocks mostly higher. The yuan was little changed.

After looking at all the data I could find, I may not like what the President is doing, but now’s not the time to lecture him on the tenets of free trade and global dominance through improved business atmospheres stateside. He’s going with tariffs, which means we go all out. It’s similar to how real war is waged. I may have been against the Iraq War, but once the first troops landed, I knew the fastest way to get them home was to completely annihilate the enemy as quickly as possible.

I posted something similar to this yesterday and felt a need to clarify my position again today. See, Doug. One critical exchange can have an impact. Thank you.

I don’t like trade wars, but if we’re going to have one, let’s do it right. No half-measures. We go in, make China’s economy feel the pain, and bring them to the negotiating table beaten and desperate. Just get it done quickly, please.

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Democrats

Elizabeth Warren’s wealth tax won’t work

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Elizabeth Warrens wealth tax wont work

There’s a popular sentiment that’s present in many circles across America. The “rich” are the bad guys who plot against the common American to keep us down. In some cases, this is actually true; wealth has been used by many throughout history to buy favors, subvert prosperity for the economic middle- and lower-classes, and steer governments to do things that benefit them while hurting others. But corruption is much less of a driving force for the hatred towards the rich than envy. Few people would take the “moral high road” and turn down opportunities that would allow them to be rich. Just ask Bernie Sanders.

But this envy of the rich is manifesting into something much more dangerous than we’ve seen in the recent past. Senator Elizabeth Warren, a top contender for the Democratic nomination for president, has built her campaign around offering as much free stuff as possible and claiming that she’ll pay for it all through her wealth tax, which she currently proposes as 2% on any household with more than $50 million and 3% on any household worth more than a billion dollars. It’s a yearly tax that is designed to help her get elected. It isn’t designed to work, and either she knows this but hopes the people won’t see it, or she doesn’t realize it and she’s an idiot.

Wealth taxes have never worked. They hamper the ability of actual job-builders to build jobs. They also incentivize the rich to take their money elsewhere, which has a cascading effect on the economy when done in bulk. But perhaps most importantly is that the revenues projected to be generating from them never come to pass.

The saddest part is based on Warren’s own calculations of how much revenue she’ll generate compared to non-partisan estimates of how much her proposals will cost, it isn’t even close. We’re not talking about being off by millions, billions, or even trillions. If she gets her way, we’ll experience a budget shortfall of tens or even hundreds of trillions of dollars over a decade. This isn’t insignificant, but it may be part of the plan.

Who would plan for economic collapse? Someone who wants to install Modern Monetary Theory in America. That’s the only realistic conclusion that one can come to unless we’re to believe she’s a total liar. And that’s possible. She could be so eager to be a one-term president that she’s willing to make promises she knows are impossible to keep. But more likely, she’s going to try to keep those promises by taking us down a path in which we print money to pay our bills, leading to hyperinflation and the total collapse of the United States of America as a viable nation.

If that happens, she’ll have the ultimate form of socialism in which everyone is suffering equally. Well, everyone other than the elite.

This video by Reason breaks down other examples of hour Elizabeth Warren’s proposed wealth tax is either based on ignorance, deceit, or both. Her calculations are off by a few decimal points, but in a post-truth society, Democrats don’t care.

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Democrats

Rashida Tlaib says $15/hr minimum wage is too low. She wants $20/hr.

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Rashida Tlaib says 15hr minimum wage is too low She wants 20hr

There is nothing more progressive than taking something radical and destructive and doubling down on the spirit of the proposal. That’s what Representative Rashida Tlaib did today when she said the movement that’s pushing for $15 per hour nationwide may be behind on the times. $15 per hour is what whey needed before, but since the costs of milk and eggs have gone up, the new minimum wage should be $20 per hour.

It has already been established by the non-partisan CBO that $15 per hour would kill off 1.3 million jobs. While most Democrats balked at the number and said it was too high, the radical progressives saw it as an opportunity – there’s plenty of room to kill off even more jobs, from their reckoning.

Costs of many items are going up, but as the Washington Free Beacon pointed out, eggs and milk are actually lower than their peaks in 2015 and 2014, respectively, around the time when the “fight for $15” started ramping up. As usual, Tlaib is making things up to support her points.

The real minimum wage is zero, as anyone unemployed knows. But jobs have been rising across the board since the President took office. The economy is humming. In many industries, there is a shortage of workers able to fill positions, forcing many companies to raise wages organically. That’s how it should be. We don’t need Washington DC placing a blanket minimum on the country, especially considering the economic norms in West Virginia are very different from the economic norms in California. Leave it to the states to regulate the economies properly.

This is just further evidence that Rashida Tlaib and “The Squad” aren’t interested in helping America. They want to tear it down and rebuild it in the Justice Democrats’ image. This is no longer a secret, but it’s an under-reported fact.

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Democrats

The real reason Kamala Harris and others keep dodging on Medicare-for-All funding

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The real reason Kamala Harris and others keep dodging on Medicare-for-All funding

Arguably the first major “dumb” moment for Alexandria Ocasio-Cortez was when she replied to a question about paying the $32 trillion price tag associated with Medicare-for-All. She said, “You just pay for it.”

Conservatives were laughing at the response while many Independents and even some Democrats were scratching their collective heads. But she meant exactly what we said. Let’s put a pin in that for a moment and move on to an interview Kamala Harris did with CNN.

Even the Democrat-friendly CNN reporter couldn’t help but press Harris about how she plans to pay for Medicare-for-All without raising taxes on the middle class. Bernie Sanders has acknowledged he’d have to raise taxes to pay for Medicare-for-All. What strange math does Harris know that Sanders does not? Is it simply artful dodging of the question over and over again as the Senator kept calling it an “investment”? Is she just pandering, knowing darn well she’ll have to raise taxes on everyone in order to fund socialized medicine but pretending like she won’t? Or is she being absolutely serious?

I’m going with that. She’s saying what she means. In essence, she’s saying what AOC said. Harris is just going to have the U.S. government pay for it even if tax dollars won’t cover it.

At this point one might be thinking that both Harris and Ocasio-Cortez are delusional. If that were the case, I wouldn’t be too worried. But they’re not delusional, at least not to the point that they don’t really know what they’re insinuating by saying the government is going to “invest” in Medicare-for-All and we’re just going to pay for it. There’s only one way to do this without drastic tax increases. It’s called Modern Monetary Theory and AOC has been on board with the disastrous concept since before she was elected. Now, it seems Harris is going to invoke the same methodology to pay for her version of Medicare-for-All and whatever else she has up her sleeve.

In essence, Modern Monetary Theory erases the fear of budget deficits and skyrocketing national debt by printing money. And more money. And again. Rinse. Repeat.

It’s the precursor for hyperinflation, though its proponents claim otherwise. They’ll tell you we’re already running trillion dollar deficits and nothing bad is happening, so why not keep going? Why not run five trillion dollar deficits? Or more? The government and the Fed have the power to keep printing as much money as they want, and as long as the U.S. Dollar is the world reserve currency, there’s really no way for hyperinflation to set in.

But it will. There’s no possible way to avoid it once the world takes note because they’ll instantly seek other avenues to replace the Dollar. That includes OPEC and the designation of the petrodollar being shifted. Nobody wants to rely on a currency that is being devalued by its own government. They’ll bail. And when they do, hyperinflation will set in.

When radical progressive politicians give strange responses about how they’re going to pay for their huge projects, take them at their word when they say they’ll just pay for it. They have a plan in mind that’s more dangerous than anything our economy has faced.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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