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Rolling The Dice
Donald Trump says sweeping tariffs and draconian immigration curbs wouldn't rekindle inflation across the US economy. I almost -- almost -- believe him. Not because he has a plausible explanation for why textbook economics is wrong about his policies (he doesn't), but rather because I distrust textbook economics.
To be clear, huge levies on imports are a de facto consumption tax and if you close the doors to cheap labor and deport the cheap labor that's already here, you shouldn't be surprised
The mass deportation of somewhere around 20 million people is an incredibly impactful economic event. Not only do you create a cheap labor shortage but you also reduce the number of consumers impacting overall demand. That would probably create a deflationary effect early which of course Trump will brag about and use to troll anyone who opposed this plan. However the deflationary impact would eventually crush small business reducing competition across markets. That reduction in competitors compounded with offshore tariffs would then bullwhip inflation much higher, now crushing medium sized businesses dependent on now more expensive supply chains. Unemployment skyrockets as firms close, demand further drops due to lack of economic mobility for lower and middle classes and by the time the man dies, so too has the peak of American economic superiority.
But hey, at least we got rid of a bunch of brown skinned people and women’s rights, right?
Trump could no more deport 20 million people than he could organize the security at one of his rallies. Starting with the Conference at Wannsee, where the outline for the “Final Solution to the Jewish Question” was created, Hitler’s plan for concentrating and killing all the Jews in occupied Europe was finalized and implemented. Although Hitler did succeed in murdering millions, it took a period longer than Trump’s term would last and only involved moving a third of the people Trump says he would move. Can’t happen, won’t happen. Decades ago I watched while ICE tried to round up all the illegals in Iowa’s meat packing companies. It took dozens of busses, cops, etc, just to put a few thousand people in an old arena in Waterloo. Then they had to bring in the law, sort everyone out, try to figure out where to send them, etc. After several months the thousands were whittled down to a few hundred. Where could we find, transport, concentrate, and erase 20 million? How can this be taken seriously? One transcript and notes from Wannsee managed to avoid destruction. There was a movie and the material has been published. Check it out. It is fascinating. They had to lie even to themselves for three days. It seems there were several folks on the committee with previously unreported Jewish roots.
“Republican” voters having selective memories and their leaders leaving huge messes for Democrats to clean up, are the hallmarks of our time.
Yes ‘facism’ is risky. the article discusses that nobody knows the et of tariffs. That’s only partially true. It really depends on the “incidence” of the tariffs. Trump’s proposal is broad based. Items we manufacture here as well as import face one outcome. Items we only import and don’t make face a different outcome. But to a greater or lesser degree prices will go up. Exporters to the US will absorb some of the increase depending on this fact and how elastic demand is for the particular good. The result will almost surely be higher prices and lower investors in the US. Someone somewhere will pay and some of it will surely be US consumers.
Trump inherited a solid economy from Obama and juiced it with tax cuts and $7 trillion in deficit spending. Works every time.
I’d be curious to hear your perspective on what happens if Trump installs puppets at the Fed to force rates down? I know it’s all speculation at this point and Erdogan is an example albeit a poor one since Turkey obviously doesn’t issue the world’s reserve currency.
Well, remember, his Judy Shelton and Stephen Moore idea(s) failed miserably.
Trump was still running for re-election that time. Wait until his supporters personally blame Jerome Powell and the rest of the Federal Reserve for being the reason they can’t afford houses, and being reminded that if Trump himself controlled interest rates they could get 2% mortgages, and maybe it’s time to take up arms against the elitists on the Fed board…
Surely Trump would never agitate his supporters to do anything violent in the service of his personal goals, right? And surely Congress would stand up to him again and not let him instill his puppets on the board, right? Ha, Ha!
The bankruptcy king can make a pile out of gold. His candidacy is a good example of that. The only thing he has is hate and division, which he has doubled down on. Journalists, Democrat politicians and others would all be best advised to leave with the immigrants to avoid incarceration or worse. With 80,000 deputies, suggested by Mike Flynn and supporters, all enforcing their version of the law we would become lawless and ungovernable. I have faith that there are enough good people left amongst the MAGAT’s to provide a landslide for Harris.
Don’t forget the less likely but, perhaps, more meaningful threat of a loss of foreign confidence in the US Dollar and US assets. Specifically, US Treasury bonds. They’d have to call the Tidy Bowl Man out of retirement to clean up the mess this would make.
This was one I was thinking as well.
Assuming we do see tariffs , then inflation , then higher interest rates, will that not send the dollar on a rager?( nod to brett kavanaugh)
Talib’s russian roulette