Not-So-Merry Christmas?

I keep remembering the line Yul Brynner used  whenever he was faced with a conundrum in The King and I?  “It’s a puzzlement.”

As Americans count down to the 2020 elections, those of us who view the Presidential contest as a critical referendum on the American Idea and the rule of law are torn. We want to stop this corrupt and incompetent administration from doing even more harm between now and then, but we also know that preventing the worst consequences of Trump’s madness will work in his favor.

Take the damage being done to the economy by his ham-handed imposition of tariffs.

As an article in the Washington Post recently put it,

There’s a case to be made that Trump has the upper hand in these trade disputes because the United States buys more from China and Mexico than those countries buy from the United States. To put it another way, China and Mexico need Trump economically more than he needs them.

But that’s just the raw economic calculation. Trump is also facing a campaign for reelection in 2020, and he’s banking on a strong economy to propel him to victory. There are already signs that Trump’s trade policies are making the markets and economy jittery, and the pain is likely to escalate if he doesn’t make some deals by September.

People who actually understand economics and trade policy (a category that clearly excludes Donald Trump) are warning that America’s economy is losing steam. Despite Trump’s fantasies, coal is dying, factories aren’t coming back and companies that are still here are pocketing their tax windfalls, not creating new jobs.

Tariffs are taxes on the American people. So far, those costs have been modest. As Trump and top White House officials frequently point out, inflation (a good gauge of price increases across the economy) has remained low, which helps explain why there hasn’t been widespread public revolt over the tariffs, except among farmers and some manufacturers who have been hit the hardest.

Experts who follow economic trends warn that the costs of Trump’s delusional “dealmaking” are likely to ramp up in August and September. That’s because he appears intent upon announcing new rounds of tariffs– thus dramatically increasing the costs Americans will have to pay for goods, and making it probable that people will notice that they, not China, are paying the tab for Trump’s version of trade policy.

August and September are when U.S. retailers import goods for the holiday shopping period. Retailers warn that If Trump’s tariffs are still in place then, “it will be nearly impossible not to pass some — if not all — costs on to consumers for holiday season 2019.”

Consider the numbers. At the start of the year Trump’s tariffs cost the typical family of four about $480 a year, according to calculations by the right leaning Tax Foundation and The Washington Post. Last month Trump increased tariffs on China, which lifted the cost for a typical family of four to $860 a year…If Trump moves forward with his other threat to put tariffs on all Chinese imports by the end of the summer, the cost would jump even higher — to more than $2,000 for a family of four.

And it’s not just higher costs. Retailing–and retail employment– is already on the ropes. As one columnist recently noted,

Last week, 661 firms — including major players such as Costco, Target and Hallmark — signed a letter pleading with the administration not to use tariffs as a cudgel in its efforts to address China’s trade abuses. The USTR has also received more than 1,600 written comments thus far, overwhelmingly negative.

These, like the USTR public hearings, echo what big retailers had already been warning investors and customers: Sweeping tariffs will stress already-thin profit margins and lead to layoffs. They will also raise prices for U.S. households by hundreds or thousands of dollars, wiping out the value of Trump’s tax cuts.

My only quibble with that letter is with the notion that the tax cuts had value…

So here’s the conundrum: Consumer spending is the backbone of the U.S. economy. If Trump continues with his “Tariff Man” antics, the economy will suffer, and the working poor, as usual, will bear the brunt of the pain.

On the other hand, other than appeals to racism, Obama’s economy is pretty much the only thing Trump has going for him.

Should good Americans root for a downturn that would be likely to ensure Trump’s defeat, even though it would cause pain for so many people? Or should we hope that sane policymakers can keep him from tanking the economy–  thereby improving his election prospects?

It’s a puzzlement.

28 thoughts on “Not-So-Merry Christmas?

  1. “It’s a puzzlement.”

    Who can say that Donald Trump will be the Republican nominee for President? Why not MIKE PENCE? The KOCH BROTHERS don’t support Trump, neither does STEVE BANNON.

    Do you remember when Lyndon Johnson surprised everyone by deciding not to run for a second term? Don’t forget that the Republican Party might be run by a bunch of rotten bastards, but they’re not, necessarily, fools.

  2. Just how desperate are we to hold out for a ‘trump card’ (?) Not only a puzzlement, but rather ironic.

  3. “On the other hand, other than appeals to racism, Obama’s economy is pretty much the only thing Trump has going for him.”

    If Trump has Obama’s economy going for him; why do I have less money than I did 2 years ago? I got no tax break because my taxable income is only $300 monthly, too low to be required to file taxes. I don’t buy “stuff”; a loan at 9.9% interest to replace my 31 year old furnace, replaced 17 year old fridge and hard drive of unknown age using my VISA with high interest. I bought 3 items of clothing on Walmart sales racks totally about $18, my granddaughter bought me new sneakers to replace my old ones with several splits in them. All food and other product costs, such as personal care and cleaning items, have gone up and Trump’s tariffs are not yet in place. We cannot escape purchasing foreign produced products because that is what is available in all stores…including food products.

    “August and September are when U.S. retailers import goods for the holiday shopping period.”

    When doing your Christmas shopping. or shopping for any of the many holidays celebrated during that time, consider those gift boxes which come in packets of 2-4 boxes. Shortly before Christmas last year an item hit the news; this country sells recycled cardboard to China who manufactures all forms of boxes which are then sold to the United States. China complains that “we” are sending them dirty, unusable recycled cardboard so are not meeting our contracted quota. How will Trump’s tariff war with China effect this issue with on-line shopping increasong and all shipping in boxes be effected along with the cost of the goods in those boxes?

    “Tariffs are taxes on the American people. So far, those costs have been modest. As Trump and top White House officials frequently point out, inflation (a good gauge of price increases across the economy) has remained low, which helps explain why there hasn’t been widespread public revolt over the tariffs, except among farmers and some manufacturers who have been hit the hardest.”

    There are many thousands more than farmers and some manufacturers being hit; and being hit hard. Add the abominable weather factor effecting farmers the brick masons, construction workers, landscapers, lawn care, all who are effected by weather conditions who are not working and not getting paid. Even with a few days of no rain, the mud prevents them working for weeks at a time. Their ongoing losses are not modest. They are not benefiting by Trump’s millions in tax payoffs as some farmers are and we have acres and acres of unplowed farmland around Indianapolis as well as construction worked stopped dead.

    I admit lack of understanding and knowledge of how are economy works but I well understand not having money to pay bills and buy food and medication. If the Democratic party continues its infighting, name calling and backbiting within their growing list of presidential candidates we can be assured of Trump’s reelection or reappointment – whichever – I deeply fear he will remain in the White House with his White Nationalists.

  4. @ Kramer vs. Kramer … once the King drops his clothes then the ‘crime commission’ plays the ‘trump card’. Deep State is keeping the winning hand close to the chest.

  5. If he loses the farmers, he loses the election. But he doesn’t seem to realize that.

  6. Norris,

    “@Kramer vs. Kramer.” Sorry to say, the L.A. Crime Commission is incompetent to handle criminal matters emanating out of the “Bible Belt.”

    See http://www.KillingtheMessenger.info. It’s not going to be Kramer vs Kramer; It is going to be: Marv Kramer, playing out of North Florida, vs. John Grisham [representing the Bush family] playing out of Oxford, Mississippi. Hopefully, it will be just for round #1.

    Also, see http://www.TheAlarmReport.info, http://www.Democracide.info, and http://www.StrategicPower.org.

  7. Conundrum indeed. Or as Stan says to Ollie, “This is another fine mess you’ve gotten us into.”

    Now there is the military fiasco and associated lies about the Iranian drone shoot-down. The entire Trump presidency is like watching a cat try to navigate a tile floor with ball-bearing boots strapped to its feet. It’s wall-to-wall incompetence all the time.

    I keep wondering when some true patriot will step up and save the country.

  8. I am beginning to accept that Trump will win. Today I read that the Indy archdiocese will no longer accept Brebeuf as a catholic church because they refused to fire a gay person. Americans are too damned stupid to keep their republic.

  9. ” If Trump continues with his “Tariff Man” antics, the economy will suffer, and the working poor, as usual, will bear the brunt of the pain.”

    It’s a little more complicated than that.

    Increased tariffs on foreign goods can give a short-term boost to economic indices.

    1. Domestic consumer purchase of foreign goods at higher prices boosts Personal Consumption Expenditures, one element of GDP growth.
    2. Competitive nationally produced goods can increase prices, profitability and Business Investment, another element of GDP. More workers are also hired and unemployment falls.

    But in the longer run, deleterious economic impacts kick in.

    1. Countries reciprocate with higher tariffs of their own and domestic production of foreign sold goods are reduced e.g. soy beans.
    2. Consumers pay more for all goods affected by higher tariffs, reducing consumer purchasing power, savings and investment.
    3. Supply chains are destabilized and realigned, reducing economic efficiency typically at higher costs.
    4. The economic well being of all countries affected by higher tariffs, imposed or received, suffers. See Adam Smith “Wealth of Nations” (1776)

    Will we see the latter deleterious effects in 2019-2020?

    Never hoped for a recession before. Seems immoral.

  10. @Marv … Marvelous. You win. Maybe pulp fiction becomes reality TV to upstage the OJ Simpson Trial and our grand children enjoy the movie version: The Trump Card 😇

  11. Lost in today’s arguments for and against tariffs is the fact that there is an international slowdown of economies, including that of China. Adoption of tariffs distort markets, and it’s not just the tariffs. Their effect distorts the inner domestic markets that produce the goods and services ultimately subject to tariffs. Further, even the prospect of tariffs is market-distorting, and with a fruitcake at our helm prone to threats, I fear the markets will remain distorted even if the tariff man doesn’t actually impose such drags on consumer demand (the ultimate arbiter of economic growth at 70% of the economy).

    I have predicted a recession in the near future since current corporate performance is not involved in building a better mousetrap and competing in their core businesses but rather with hat in hand (and campaign contributions) their bottom lines reflect congressional giveaways via the internal revenue and bankruptcy codes. The Dow is thus virtually meaningless as a gauge of real economic activity. Stiglitz visualizes our economy as a pie, and with big hunks removed from the pie and given over to corporate profits and shareholder dividends and capital gains, the pie shrinks for the rest of us. With lesser demand from the thus distorted mass market comes slowdown, recession, or worse. I think recession; the only question being when. We’ll see.

  12. Norris,

    I guess you know I’ve owned the URL: TrumpCard.video, purchased 7 days after Trump announced for the Presidency.

    Also, I’m sure you realize that you must have all the cards in your hand from the beginning to play this game, or you will, surely, be a “dead duck.”

  13. Norris,

    If you already haven’t, I would suggest reading “The Manipulators: A hard-hitting inside story of men and money in action” by Leslie Gould, who at the time was the Finacial Editor of The New York World Journal (David McKay Company, New York, 1966).

    My father is briefly mentioned on page 16. You have to understand the minds of these type of men and especially their modus operandi, or they will be virtually UNTOUCHABLE.

  14. The most deceptive measure of a “good” economy is GDP. It measures the overall wealth of the corporations, banks, businesses WITHOUT taking into consideration the impact on working people and the poor. The GDP may rise, but nothing necessarily “trickles down.” The fat cats gorge and we poor mice are the victims. Please note that I am not saying that GDP doesn’t have its place, but in no way does it measure the overall health of the populace.

  15. Thank you, Wray!

    Polls for non-growth indices show a much different story when it comes to happiness. Pollution is up…is that good for growth.

    What about growth in private prisons…is that such a good thing?

    Like Hollywood movies, this is all smoke and mirrors. Much like our economy.

    The stock buy-back or Trump’s tax gift was primarily used to fuel the stock market, and the Oligarchs only feel GDP. By the way, they raised all their interest rates on us because of inflation. Where is all this inflation? Even then, the bond yields have been confusing analysts for several years.

    And will war with Iran and Russia be good for business? If so, guess what?

    All smoke and mirrors between the Oligarchs, MIC, and Big Media. The show will go on with any president right of Bernie Sanders. Only a New Dealer like Sanders grants any hope for average America. Otherwise, unchecked concentrated power will be hell on Earth. You dislike Fascism now, hold your breath.

  16. Trump’s Bull-in-the-China-shop economic programs mean he will be impaled with shards of glass and yet have no understanding of the nature of his wounds. He has insulted and demeaned every American who didn’t vote for him. Is that a path to victory?

    The Tea Party and the Freedom Caucus and Mitch McConnell and Trump’s election with Russian assistance have convinced me that the body politic is moribund, but there’s evidence the heart is still beating. Buttigieg and Warren and Booker and Andy Yang are some of the best Democrats ever and one will emerge to dominate the field. But Bill Maher may have nailed it last night when he said that from now on the presidency is all about celebrity. Therefore, the only person sure to defeat Trump in 2020 is Oprah Winfrey. If she can deal with Trump’s potty mouth during the campaign, she will have the backing of most blacks, nearly all (including educated) women, and even a lot of white men. Maybe we’re looking for a nominee to love in all the wrong places. It’s a puzzlement.

  17. Wray; I will add my thank you to Todd’s. I added to the 2018 GDP by replacing my 31 year old furnace during an ice storm, my 17 year old fridge in June, in July my old hard drive and my printer died, I had over $2,000 in repairs on my 22 year old car. Ever notice how many cars on the streets and highways are dented and damaged? Vehicle insurance deductibles keep many of us from reporting damage but those premiums are paid along with all monthly bills. And vehicles will run with dents and body damage but not with mechanical problems or flat tires. It isn’t as if we are out there spending money for pleasure; just trying to hold things together with duct tape and keep things working with WD-40. And now we are awaiting Trump’s tariff results.

    “The most deceptive measure of a “good” economy is GDP. It measures the overall wealth of the corporations, banks, businesses WITHOUT taking into consideration the impact on working people and the poor.”

  18. Wray and Todd,

    Re: “The most deceptive measure of a “good” economy is GDP. It measures the overall wealth of the corporations, banks, businesses WITHOUT taking into consideration the impact on working people and the poor.”

    As you both undoubtedly know, GDP includes total household consumption when calculated by spending, or total wages, salaries and incomes when calculated by incomes.

    If your point is it is imperfect measure and can mask a lot of ills, I accept. However, I think the most “deceptive” conflation of a “good” economy is wall street indices.

  19. Great comments Todd, especially:

    “All smoke and mirrors between the Oligarchs, MIC, and Big Media. The show will go on with any president right of Bernie Sanders. Only a New Dealer like Sanders grants any hope for average America.”

    I would add Elizabeth Warren to your list. The Corporate Democrats are desperate to not yield to Sanders or Warren, thus the continued push to elect Biden by CNN and MSDNC.

    I am not so worried about Christmas costing more. My worry is the continued escalation of conflict with Iran. It was President Agent Orange who pulled out of the Iran Nuclear Deal, and imposed more sanctions.

    As usual the parade of “experts” were brought on Cable News to push their war mongering as they sit safely in a studio. These “experts” never tell us that Iran is almost completely surrounded by the USA’s War Machine in Afghanistan, Iraq, in the Gulf States and on the high seas.

    What is not surprising to me is the near total silence by Congress. You would think an attack on Iran would call for a Declaration of War by Congress, this is the way the system was designed to work.

  20. We need to be careful not to overrate the Trump bluster factor. Repeatedly he stakes out some extreme position, gets much less than half a loaf, and claims victory (North Korean, recent tariff threats against Mexico, a “better” NAFTA, etc.) Anyone cognizant with the facts notices this, but that does not include his base. I share you ambivalence about hoping that the economy tanks to give Trump and his followers their well deserved comeuppance. But, we (and the media) should be careful to not overreact to the daily bluster.

  21. We’re way overdue for a recession. Let’s get it over with and get on about another expansion. And, coincidentally, help tRump lose!

  22. We have two economies, one for the donor class measured by the stock market indices for the people whose income is from invested wealth, the other for the working class measured by unemployment for people whose income is from creating that wealth.

    It’s hard to tell which class is more to blame for the current debacle in DC. What’s clear though is that Putin’s spy craft and the GOP’s fake news that carried Agent Orange into the Whitehouse was more influential on the working class.

    Which class will be first to abandon the sinking ship in 2020?

  23. Marv: “Don’t forget that the Republican Party might be run by a bunch of rotten bastards, but they’re not, necessarily, (short-term) fools.” But without a doubt they are long-term fools.

  24. “I would add Elizabeth Warren to your list. The Corporate Democrats are desperate to not yield to Sanders or Warren.” Well said!
    Read Warren’s book: A Fighting Chance. She’s been there — a working poor person.
    And if we need a celebrity for president, couldn’t it be RuPaul? He always makes me laugh. And think of the fashion improvement in DC!!

  25. Furthermore:

    Thru March of 2019 wages have grown an average of 4.4% over the previous year for 12 consecutive months, outstripping GDP growth.

    https://tradingeconomics.com/united-states/wage-growth

    Trump has used techniques to achieve this stimulus that will torch the economy in the long run e.g. tax cuts for the wealthy, increased deficit spending, short term tariffs benefit, and deregulation.

    Ms. Kennedy has it right when she says:

    “Should good Americans root for a downturn that would be likely to ensure Trump’s defeat, even though it would cause pain for so many people? Or should we hope that sane policymakers can keep him from tanking the economy– thereby improving his election prospects?

    It’s a puzzlement.”

    But lets not make up alternate facts like the opposition does. Unless things change economically, we face a strong electoral headwind.

  26. John Neal – wages are up – the data I have not seen is how much of that increase is due to laws raising the minimum wage and big retailers trying to preempt unions, new laws and such. I am sure it doesn’t account for 100% of wage growth, but I still wonder how much.

    In answer to Sheila’s question, I don’t think we have to wish for bad things. The economy may prevent mass defections from Trump, but it doesn’t assure him a win. We need to remember that (1)Trump lost last time, (2) he has not expanded his base, (3) there are many suburban women who have realized that reproductive rights are endangered and Trump won’t help, and (4) Hillary, besides being a divisive figure, ran a poor campaign. It is quite possible for the Democrats to blow this election, but I am hopeful it won’t happen this time.

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