Thanks to Barry Ritholtz
One of the inevitable results of scumbag supply-side economists. The only sort employed by the fake president.
Donald J. Trump @realDonaldTrump 7:44 AM – Jun 15, 2019: “The Trump Economy is setting records, and has a long way up to go….However, if anyone but me takes over in 2020 (I know the competition very well), there will be a Market Crash the likes of which has not been seen before! KEEP AMERICA GREAT”
Just another supply-side creep who hopes the inevitable crash from mediocre economics happens after he lies his way into a second term. [In case you don’t recall Ronald Reagan’s White House career]
The Commerce Department said Wednesday that the United States last year posted an $891.2 billion trade deficit in merchandise, the largest in the nation’s 243-year history despite more than two years of President Trump’s “America First” policies.
The results were a sobering reminder that the laws of economics still apply to a president who had promised to supercharge economic growth while simultaneously shrinking the chronic U.S. trade deficit.
Those twin promises proved incompatible, as economists had predicted…
“Macroeconomics end up ruling. You can’t wish it away. You can’t tariff it away,” said William Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies.
The same supply-side foolishness Republicans seem to love were trotted out by Trump advisors like Navarro and Kudlow offering up the same economic bible that failed – most recently – Ronald Reagan and George W. Bush. There are masochistic terms for fools who continue to repeat useless acts in hope of a different result. They describe politicians who really don’t give a damn about decent jobs, good wages, good education and good health for the working families of this nation..
As Paul Krugman pointed out, it’s a fallacy to think that foreigners are the only ones paying the tariff bill. U.S. consumers pay as well. Believing that tariffs are a tax on foreign countries is like believing that sales taxes are a tax on Wal-Mart.
It’s also makes little sense for Trump to brag about the tax revenue his tariffs are creating, when his own tax cuts have increased the deficit by enormous amounts. So far the tariffs have raised a few billion in revenue, while the tax cuts are expected to cost about $100 billion every year.
…The burden of tariffs falls mostly on domestic consumers — in other words, Americans — because the prices of many traded goods are set in world markets. Suppose a Chinese company is selling a washing machine in the U.S. for $1,000. Trump then sets a tariff of $200 on the washing machine. The Chinese company knows that it can go sell its washing machine somewhere else without the tariff — France, or Japan, or Russia — and still get about $1,000 for it. So in order to make it worth the Chinese company’s while to sell the machine in the U.S., it’s going to have to raise the sticker price to $1,200.
That’s an idealized example, of course — in fact, the U.S. domestic market is large enough where it has some power to affect global prices, so Chinese merchants will pay some small portion of the tariff. But much of the cost of the tax will be borne by the American consumer.
Nothing new here. Incompetent economists like Peter Navarro – and crooked politicians like Trump and Reagan have been pushing models like this for decades. They fail to grow our economy every time. American taxpayers pick up the tab every time.
❝ ’Tis the quarter before holiday shopping season, and the president just announced tariffs on another $200 billion worth of Chinese goods, in addition to the $50 billion in products he imposed duties on over the summer.
The new tariffs could jack up prices on all sorts of standard Christmas purchases, including televisions, computers, mittens and knit hats…
More to the point, Trump’s tariffs could make Black Friday truly bleak.
❝ That’s true for the consumers whose wages are barely keeping up with inflation, and who don’t have the spare change lying around to cover a 10- or 25 percent price hike if Trump’s tariffs get tacked on to the cost of presents they plan to stash under the tree.
But it’s also true for U.S. companies, including major American success stories such as Apple. The consumer products giant counts on holiday retail sales for about a third of its annual revenue. It has already warned investors that its watch, wireless headphones and Mac mini computer, among other products, might take a hit.
Unless you are the sort of Republican Party donor who loves truly grotesque indulgences like, say, ostrich jackets or Gucci golf bags, the average wealthy American doesn’t spend a whole helluva lot more geedus on family presents than an upper middle class family. There are limits to consumerism before you reach neurosis.
The Fake President and his Congressional flunkies consider saddling future generations with a quick Trillion$ addition to the national debt just part of the election game. The part of this nation defined by the words “working families” has to guide their economic lives with some form of budget. And, now, the Washington Clown Show is making it even harder.