Tag: tariffs

So, How Is America Really Doing?

Quandaries over riots in major cities, gender and LGBTQ+, chaos, tariffs, inflation, antisemitism, Israel, Iran nukes, Ukraine, China–wait, didn’t we vote in November to fix all this and Make America Great Again? Yet, the evening mainstream news has never been more depressing. But how is America really doing? I believe the short answer is, pretty well, actually. It takes time to undo the damage foisted on our nation from the Obama and Biden administrations. Sandwiched in between them, Trump made some sweeping corrections in his first term. But he was constantly beaten down by hateful Democratic attacks and conspiracies including two senseless impeachments. Now, early in the present administration, many positive things are happening that are being suppressed by the mainstream media. Let’s take a look at what the Trump team is pulling out of that red cap.

Democrats are screaming that Trump caused the present violent riots by illegally abducting and deporting innocent immigrants. They say his calling up the military to help quell the “peaceful” rioting is unconstitutional. Almost all the media are supporting the Democratic disinformation and lies just as they did in the George Floyd riots. Except, this time, Trump is clamping down on the insurrectionists before they spiral completely out of control. Federal law and order action is finally prevailing.

Democrats are decrying the arrest and deportation of illegal immigrants, many of whom are hardened criminals, and demanding the courts stop military involvement. Deportation of illegal immigrants is not only a legal obligation of the federal government, it was a mandate of the overwhelming majority of voters in the last presidential election. Use of the military in this national emergency situation is undeniably warrented and constitutional as an appeals court just declared. The Insurrection Act of 1807 authorizes the use of the military in domestic emergencies as determined by the president. The Posse Comitatus Act of 1878 allows such military involvement only in support of law enforcement through crowd management, equipment, technology, and surveillance. Posse Comitatus is Latin for “Power of the County,” meaning emergency assistance authorized by a government agency. Under these Acts, the military cannot arrest citizens or provide offensive support. The military assists and defends local law enforcement. Therefore, the truth is that the federal government has acted constitutionally in their rightful role and responsibility to protect Americans. And they are doing it swiftly before rioting causes more injury and destruction. That is the positive truth you won’t hear from the Democrats and the media.

The Democrats seem to consider the support and promotion of transgender and LBGTQ+ lifestyles as essential to the survival of the universe. This immoral, unbiblical, and reprehensible behavior is lauded by the Left and supported by “in your face” reporting 24/7 by the mainstream media. Thankfully, this burgeoning trend of support appears to have sharply reversed course after the January 20 inauguration. A Supreme Court finding recently banned transgenders from the military, the NCAA has disallowed biological men to compete in women’s college sports, and Trump’s executive order prevents participation of transgender athletes in all women’s sports. The Trump administration will not be acknowledging June Pride Month in any way, and many corporations are withdrawing their promotions of LGBTQ+ products and services. In short, America’s support for transgender and LGBTQ+ issues is being deemphasized. That is a positive you won’t hear from the Democrats and the media.

Trump’s use of tariffs as an international trade incentive to level the world trade field is aggressively opposed by Democrats as devastating to our economy. They say prices and inflation will skyrocket. Yet, just days after the tariffs were imposed, dozens of national leaders came calling on Trump to negotiate fairer trade conditions. Furthermore, we are now over four months into the Trump tariff increases, and inflation is 2.4%, which is almost at the record low of 2.33%. Consumer prices of just about everything have declined since the tariffs were imposed. But you won’t hear Democrats or the media touting any of these newsworthy stats.

The antisemitism riots all over America and the killing and persecution of Jews have been rampant for months. The Biden and Obama administrations were soft and timid toward Israel’s arch enemy, Iran. Democrats vehemently condemned Trumps rejection of the flawed nuclear negotiations during his first term. Shortly after his last inauguration, Trump gave Iran an ultimation to negotiate a good-faith agreement which they declined. On June 11th, a 60-day deadline for Iran to negotiate the termination of nuclear weapons development expired. On June 12th, Israel attacked Iran’s nuclear development facilities and killed several top Iranian military leaders. The Democrats immediately blamed Trump for potentially causing an all-out regional war and putting Americans at risk. The news media followed the Democrats’ lead. Of course, the Left will never acknowledge the truth that the attack prevented Iran’s annihilation of Israel in a nuclear holocaust and possibly destruction of American forces. All Americans are much safer today with an impotent Iranian government.

The Ukraine and Russia crisis is a world dilemma. How do you deal with a thug dictator like Putin? We know that kowtowing to the Kremlin has never gotten us anywhere in this war. But the Biden administration, which allowed it to happen in the first place, has given into Putin’s schemes since the land-grab war began. It is obvious that only peace through strength will work here. Thankfully, we now have a president who is respected and feared by Putin. It will only be a matter of time until a negotiated settlement will be struck, although preceded by a lot of fireworks. The Democrats will continue to play Chicken Little, convincing many Americans that Trump is starting World War Three. Watch for the Democratic counter punches all over social media and the news media. We must resist the gaslighting while supporting the credible strategy of the Trump administration on this one, too.

As for China, President Xi will continue to rattle his sabre publicly, but privately, he realizes that, on January 20th, the playing field changed. He was no longer dealing with a weak American president. The Democrats, supported by the media, will cry wolf constantly, scaring Americans into thinking China is overtaking the U.S. in everything. It is important that Americans maintain a patriotic confidence in our great nation in these times. We must support our president and our military. Trump and Xi have a mutual respect for each other that creates a unique connection. China will stand at the red line and beat its chest, but it won’t cross that line as long as Trump is in office, and we don’t blink.

So, how is America really doing? Before last November, our future was dismal. Woke, meek, and leaderless, we were destined for irrelevance unless provedentially rescued. The election and the first six months of the Trump administration has been God’s intervention of grace and mercy to give our nation another chance to get it right. Although it may look depressingly dark, when you seek truth and look past the Democrats and the news media, your day will brighten. After years of decline, it appears we are doing better despite the naysayers.

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Have Democrats Forgotten About American Workers?

tariffs-trade-war

If you had asked Democrats a decade ago what the soul of their party was, most would have said the working class. They don’t say that anymore.

Liberals for years marketed themselves as advocates for the blue-collar worker with a high school education, a union job, and the American dream. Nowadays, the Left has become obsessed with the socialism movement of cultural Marxists and the destruction of capitalism. In essence, the Democrat Party has lost its soul to the radical fringes of its base. And nowhere else is this trend more clearly illustrated than the Democrats’ most recent attack on President Trump’s increased tariff imposition.

For a half-century, America has ignored a growing trade imbalance with almost every international trading partner. Since the 1970’s the US has seen imports trending higher compared to exports except for small trade surpluses in 1998 to 2001. In 2018, our nation’s exports were valued at $2.5 trillion while our imports were valued at over $3.1 trillion, a deficit of over $600 billion. That equates to 3% of our GDP.

Over $400 billion of that deficit is from our trade with China, up from $34 billion in 1990. The bulk of the rest is from the Canada, Mexico, and the EU. Most of these nations’ businesses enjoy government subsidies and low labor costs. All of them levy substantial tariff taxes on most American goods and services while we levy much less or nothing on theirs. Thus, America’s appetite for cheaper foreign goods and services, although satisfying consumers, is taking jobs and higher wages from our workers. The great economy we are currently enjoying would be even more robust without the imbalance in tariffs.

While the Left has been more than happy to ostracize the American worker by ignoring tariffs, the Trump Administration has taken the opposite approach. The president has embraced workers in domestic commerce, defending our nation’s manufacturing from the corrosive policies of our international trade partners. As a professor of economics, I have long advocated free trade on a global scale. However, when other nations establish barriers to free trade, the US must respond in kind to remain competitive. Temporary declines in exports and imports due to our increased tariffs are a short-term price worth paying for an eventual level playing field that benefits both consumers and employees.

Here is one example. In 2018, the president approved relief for the U.S. appliance industry, specifically washing machines. After an independent investigation by the U.S. International Trade Commission (ITC) found that “US producers had been seriously injured by imports,” the president took action. He announced tariffs on foreign-produced washers to protect domestic manufacturers and, in effect, American workers.

Liberals were quick to try to delegitimize the president’s efforts to buttress America’s labor force. Last April, a trio of academics released a study attempting to demonstrate the economic harm caused by the president’s washer tariffs. Unfortunately for academia, the study was full of holes. The authors overlooked many glaring flaws to arrive at their preferred conclusion that the tariffs were harmful. Not only did the authors fail to consider the thousands of manufacturing jobs saved and created by the tariff, but they also failed to account for the more than 15,000 jobs indirectly supported by the president’s action.

President Trump’s administration is succeeding exactly where liberals have failed: in protecting America’s vulnerable blue-collar sector. While Democrats are increasingly content to advocate for socialist policies designed to attract the dependent segment of society, the president has shown his willingness to fight for the jobs of all Americans. It’s clear that Democrats in their push for social experimentation have forgotten about the American workers. Thankfully, President Trump hasn’t.

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GDP Growth: Why Should We Care?

The most important current news item is not Cohen’s tape, Putin’s visit, or what the president knew when. The news media is focused on those Trump bashing stories that hardly affect you and me in order to foster their liberal narrative. America’s Gross Domestic Product, or GDP, just increased significantly, and that’s a personal win for us. Of course, the media is playing it down. So what does GDP mean to us exactly?

GDP is the globally recognized measure of a nation’s economy. It is is the market value of all currently produced final goods and services within a country in a year by domestic and foreign-supplied resources. In other words, America’s GDP is every dollar spent on everything purchased by this country’s consumers no matter where it was produced. This includes personal spending by American households, investment spending by businesses, government spending, and net export spending (Americans’ spending on foreign products and services minus foreigners’ spending on our products and services). Last year the U.S. GDP was $19.4 trillion. That is one-fourth of the world’s total economy.

A figure that big is almost meaningless until it is compared to that of other nations. The next highest GDP is China’s at just under $12 trillion. Japan is next at $4.9 trillion followed by Germany at $3.7 trillion. The U.S. GDP is higher than all nations of the European Union combined. By the way, Russia’s GDP is $1.5 trillion.

The more important factor is how we are trending in GDP. Generally, a healthy economy is considered to have an annual growth rate of 4%.  For the last three years, the U.S. has posted percentage increases of 2.9, 1.6, and 2.2 respectively. The last time America enjoyed a 4% annual increase was in 2000, 18 years ago. Annual increases during the entire Obama administration averaged 1.6%. Although GDP is an annual statistic, it is measured quarterly. The quarterly measurement is “annualized” to estimate what the annual result of the quarterly numbers would be. The increase just announced for the second quarter (April through June) was 4.1% annualized. In other words, if the U.S. economy continues to perform at the present pace, we would have a 4.1% increase in GDP for 2018. The last quarterly increase north of 4% was in 2014. Almost all economists, regardless of their political leanings attribute the good news to President Trump’s policies of tax cuts, job creation, regulation reforms, and trade negotiations.

What does this growing economy mean to you personally? It means production increases that bring lower prices, more jobs creating upward mobility in the work force and less government subsistence, more government revenue keeping taxes down, more entrepreneurial opportunity, better infrastructure creation and maintenance, hopefully lower national debt, and a strong dollar keeping import prices down. A healthy, growing economy adds quality to the life of every American.

Of course, many factors are involved in the movement of a national economy. We should celebrate the 4.1%, but watch closely what happens in the next quarter. The Trump tariffs and potential trade wars could bring downward pressure on the GDP as could the status of our sanctions on Russia, Iran, North Korea, etc. External realities can offset a lot of good internal policies in shaping our economy. But, don’t get too caught up in all the liberal hype about losing our allies and putting our economic supremacy at risk. No other country or international trade organization is going to do much to provoke a country that holds a quarter of the world’s financial resources.

In my opinion, though, America desperately needs to turn off the soap opera of news stories that distract our attention away from much more important things like the economy. Let’s take a deep breath and focus on what’s good about America.

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Trump’s Tariffs: Good or Bad for America?

As a teacher of college economics, I am generally a free trade advocate. Tariffs are usually hindrances to free trade. However, the complex issues of a huge international trade deficit and a sharp decline in manufacturing in America warrant consideration of increasing tariffs on some of our most critical imports. Our future economic health requires leveling the playing field between us and our international trading partners.

The subject of international economics is, of course, far too intricate to accommodate in a short blog post. But, we need to understand a few fundamentals in order to make sense of what is at stake in the current controversial tariff decision by the president. A capitalist free market is without question the best overall trade system known to man. In the best of all worlds, open competition driven by profit incentive and unconstrained by government yields the highest quality of life for everyone. Unfortunately, this utopian economic system is always subject to corruption by the selfish, power-seeking participants.

America’s domestic free market is protected from bad players by various anti-trust laws, monopoly restrictions, and price stabilization controls. Buyers and sellers are virtually free to deal according to supply and demand, but within certain parameters that ensure fairness. This free, but guarded, economy has made America the richest nation in the world. Although a few international trade agreements attempt to provide similar protections for world markets, the restraints are minimum. International trade is a different environment occasionally requiring government intervention.

Two realities place America at a disadvantage in trading with other countries. First, our economic advantage has become our economic disadvantage. We have attained a quality of life that requires a level of individual wealth not enjoyed by most other countries. Therefore, Americans are not willing to produce at the lower income levels accepted by foreign workers. That means other countries can produce most goods and services at lower prices than we can. Second, to keep the price gap wide between American and foreign products, other countries often add burdensome tariff taxes or place limiting quotas on products we export to them. Conversely, the U.S. rarely places tariffs or quotas on imports from those countries. These practices make American products more expensive in foreign countries, while foreign products enter our country at prices far less than like products made in America. That results in high demand for foreign products in America, and low demand for American products in other countries.

This situation has caused a serious trade deficit in America in the amount we export versus the amount we import. In 2017, we imported $2.895 trillion in goods and services while exporting only $2.329 trillion. That is a deficit of $566 billion, a serious outflow of America’s wealth (20% gap) to other nations. To sustain a healthy economy, the export-import ratio should be zero–exports equal to imports–or even a net-export surplus. The dilemma is how to level the playing field without hurting our own citizens.

American consumers benefit greatly from lower prices of foreign goods and services due to lower labor costs of the other countries. At the same time, our corporations and employees suffer in sales decreases, job losses, and pay reductions due to export restrictions and lower prices on imports. President Trumps tariff proposals on steel and aluminum are a step toward resolving this dilemma, although there are valid downsides.

Such tariffs would allow American steel and aluminum producers to compete in price with foreign producers, since the higher taxed foreign products would cost more in our country. Of course, higher priced raw materials will drive up the prices of steel- and aluminum-based products for all American consumers. We Americans will have to feel some pain in order to meet our national economic objectives. The reductions in sales of foreign products to America should provide incentive for other countries to lower or withdraw their tariffs on American products as a move toward a more balanced market. Other countries need to get the message that flooding the American market with lower priced imports is no longer an option unless they allow our exports to enter their market without tariff.

Some lawmakers decry the tariffs as provoking an international trade war with other countries banning American products and America banning theirs. We may see some of that, but the risk is worth the reward of ultimately balancing our imports and exports. The bottom line is we can’t continue our increasingly negative trade balance that is so detrimental to our economy.

I hope the Chicken Little reaction from the left and even some conservatives will cease, and we will all give the president’s plan a chance. Let him have the bargaining tools he needs to make America great again.

I encourage your feedback.

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