President Donald Trump’s planned 25 percent tariff on steel imports and 10 percent tariff on aluminum imports may provide a temporary boost for those industries, but the tariffs will do tremendous long-term damage to the American and global economies. Tariffs raise the price of, and reduce demand for, imported goods. Tariffs ensure the preferences of politicians, instead of the preferences of consumers, determine how resources are allocated. This reduces economic efficiency and living standards.
Some justify these economic inefficiencies as being worth it to save American jobs. This ignores how tariffs increase costs of production for industries reliant on imported materials to produce their products. These increased costs lead to job losses in those industries. For example, President Trump’s proposed steel tariff could cost nearly 40,000 jobs in the steel-dependent auto manufacturing industry. Tariffs also cause job losses in industries reliant on exports. This is especially true if – as is likely to be the case – other countries respond to President Trump’s actions by increasing tariffs on US products.
Many of President Trump’s critics do not themselves support true free trade, which is the voluntary exchange of goods and services across borders. Instead, they support the managed (by government) trade of NAFTA and the World Trade Organization (WTO). NAFTA and the WTO promote world government and crony capitalism, not free markets. Any libertarian or free-market conservative who thinks the WTO promotes economic liberty should remember that the WTO once ordered Congress to raise taxes!
Foreign manufacturers may make convenient scapegoats for the problems facing US industry. However, the truth is that most of the problems plaguing American businesses stem from the US government. American businesses are burdened by thousands of federal regulations controlling every aspect of their operations. The tax system also burdens businesses. Until last year’s tax reform bill, the US had the highest corporate tax rates in the developed word. The tax reform bill lowered corporate taxes, but the US corporate tax rate is still higher than that of many other developed countries.
The United States not only spends more on “defense” than the combined budgets of the next eight biggest spending countries, but also spends billions subsidizing the defense of developed counties like Germany, Japan, and South Korea. Bringing US troops home from these countries is an excellent place to start reducing spending on militarism.
The biggest cause of our economic problems is the Federal Reserve. America’s experiment with fiat currency has enabled a system based on private and public debt. This makes trade imbalances inevitable as the US government needs foreign investors to purchase its debt. Foreign investors get the money to purchase the US government’s debt by selling products to American consumers. A trade war could cause foreign investors to stop buying US debt instruments and could end the dollar’s world reserves currency status. This would cause a major economic crisis – but at least it would stop our shores from being flooded with “cheap foreign goods.”
President Trump’s claim that trade wars can be easily won is as credible as the neoconservative claim that the Iraq War would be a cakewalk. A trade war would likely push the global economy into a recession or worse. Instead of imposing costs on American businesses and consumers and putting those whose livelihoods depend on imports out of s job, President Trump should address the real causes of our economic problems: the welfare-warfare state, the IRS, and the Federal Reserve.
John Bolton Ordered Staff to Report Trump and Guiliani Because of Illegal Ukrainian “Drug Deal.”
The New York Times is reporting that, responding to the Ukraine scandal, Trump aide John Bolton warned “Giuliani’s a hand grenade who’s going to blow everyone up.”
Seems he was fired because he would have no part of President Donald Trump’s off-the-books shadow government Ukraine extortion scandal. Bolton also apparently implicated both the president’s personal attorney, Rudy Giuliani, and the president’s acting chief of staff, Mick Mulvany.
“I am not part of whatever drug deal Rudy and Mulvaney are cooking up,” Bolton told senior director for Russian and Eurasian affairs Fiona Hill to tell White House lawyers, The New York Times reports in a bombshell article late Monday night.
Bolton, who resigned from the Trump administration hours before President Trump tweeted he had fired him, instructed Hill “to notify the chief lawyer for the National Security Council that Mr. Giuliani was working with Mick Mulvaney, the acting White House chief of staff, on a rogue operation with legal implications,” Hill told House of Representatives investigators on Monday.
EMERGENCY: Turkey Holding US Nukes Hostage
The military situation near the Turkish border in Syria remains in flux, with allegiances shifting quickly amid uncertainty of how everything will shake out. But the fast-moving developments also have drawn attention to a lesser-known fact of US foreign policy:
The Pentagon has about 50 tactical nuclear weapons stored in Turkey at its Incirlik Air Base, reports Business Insider. The big question: Is it still safe to keep them there now that US-Turkey relations are fraying? Related coverage:
- Under review: Officials in the State and Energy departments have begun “quietly reviewing” plans to evacuate the weapons, reports the New York Times. “Those weapons, one senior official said, were now essentially Erdogan’s hostages,” writes David Sanger. “To fly them out of Incirlik would be to mark the de facto end of the Turkish-American alliance. To keep them there, though, is to perpetuate a nuclear vulnerability that should have been eliminated years ago.
- In vaults: The bombs have been stored in underground vaults at Incirlik since the 1960s, per a backgrounder in the New Yorker. That goes back to the days when Incirlik turned into a crucial Cold War base. The story says the vaults “hold about fifty B-61 hydrogen bombs—more than 25% of the nuclear weapons in the NATO stockpile.”
This intervention has precipitated an all-new crisis in the region, prompted the start of at least a tactical withdrawal of U.S. forces from much of the country amid concerns they could be caught in the fighting, and led to calls for an arms embargo and major sanctions on the Turkish government.
Matt Gaetz Caught Spying for Trump
Republican Rep. Matt Gaetz (R-Fla.) was reportedly booted from a closed-door interview of President Donald Trump’s former top Russia aide, Fiona Hill.
According to CNN’s Senior Congressional Correspondent Manu Rajuand others, Rep. Gaetz, known as a vociferous defender of President Trump and his agenda, was ejected just before the proceeding began.
“Matt Gaetz emerges from closed-door interview with Fiona Hill saying he was kicked out by House Democrats [because] he’s not a member of the three committees conducting the interview,” Raju reported just before 11 a.m. Monday morning. “He said he consulted with the House parliamentarian, who ruled that he could not be there.”
Hill was testifying in front of the House Intelligence, Oversight, and Foreign Affairs committees as part of their impeachment inquiry into Trump’s July 25 phone call with Ukrainian president Volodymyr Zelensky and subsequent efforts to conceal the content of the conversation. Hill was subpoenaed by the committees.
Rep. Gaetz is a member of the House Judiciary Committee and does not sit on any of the committees that subpoenaed Hill. Gaetz, as you’ll see, was quick to point out that House Judiciary Chairman Jerrold Nadler (D-N.Y.) claimed to have begun an impeachment inquiry before Speaker of the House Nancy Pelosi (D-Calif.) backed one and before the three other committees got involved.
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