Economics – Again (Sorry…)

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Read a piece in The NY Times talking about the same topic I’ve been discussing for the past week or so. They featured a manufacturer in the midwest that makes recliner chairs for movie theaters. Where do most of his raw materials come from? Yep – from China. Tariffs on imports from China will make his products LESS competitive than his competitors in Mexico, Colombia and Australia. So what will he likely have to do? If he raises his prices, he’ll sell less and likely lay off workers. If he pays more for raw materials and charges the same price, he’ll be out of business in rather short order, and lay off ALL his workers. So with higher priced raw materials from China, he’ll turn to suppliers elsewhere, like Vietnam. And which group of manufacturers are looking in relocate to places like Vietnam and even Africa? Chinese manufacturers.

Obama caved to pressure in 2009 from American tire manufacturers and slapped a 35% tariff on Chinese tires. 45% is the number that’s being bandied about by spokespeople for Trumponomics. What was the result of that Obama tariff on Chinese tires? 1200 tire manufacturing jobs were saved. But the cost to consumers increased by over a billion dollars. What did those consumers do? They spent less elsewhere. The net result? The loss of 2,500 retail jobs. This is all according to the Peterson Institute for International Economics, ostensibly a non-partisan think tank. But it’s run by Pete Peterson, who is no bleeding heart liberal. So I think these numbers are real.

Here’s the thing: at some point, DtheT will get bored with all this and turn it ALL over to the Republicans. Those folk are not the sharpest knives in the drawer, and have been preaching this kind of nonsense for so many years, they’ve convinced themselves that it’s truly the way to proceed. So when DtheT “lets go” and lets the “Freedom Caucus” run things, we will see tariffs, potentially withdrawal from the WTO and other insane moves. Be prepared to see a party very much in disarray within a year of DtheT and President Pence taking office. A whiff of limbaugh-trumpimpeachment will fill the air…the last thing we need. Won’t be too long before all these folk that voted for Trump will be wishing they had Barry O back. Ironic, eh?

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