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I'd just add that cost of housing is almost all determined by the market although "replacement cost" is a viable way of starting a potential seller's pov of the market, if it is even possible to replace what you even want to sell.
I really do not understand why Tarriffs are so controversial if you are part of a market that companies/countries want access to sale into.
Yes, it is temporarily inflationary. But 1 of 2 things happen to mitigate that in the short to mid run:
1. The company removes their tarriffs and all goes to even
2. The Market finds a suitable replacement for the procuct or another source for the product.
Hardwoods are a GREAT example. What percent of Montana is in protected Federal Land. how much would that need to change to make up for Canadian improrts. how many additional jobs and tax income is that in the US? And that does not even bring Alaska into play...
I read where something like 10% to 15% of Euro Wine and Champagne sales go to the US. Do they want to lose that market to US where the product is basically the same quality, just not same name brand?
Auto tarriffs are even more needed...
Agree 100%. And the "land of no use" should be used. They used to sell "cream of spotted owl" tee shirts around here, but all the big mills closed, in the entire state. The lumber industry killed by 2 things, Canada subsidized their lumber and the US penalized it by allowing lawsuits over every timber sale.
Canada has plenty of trees to log, and some argue, then let's be free trade and get our lumber there. Also, Mexico and other countries have lots of cheap labor, so let's build all our factories in those countries.
Which is why america's towns in the midwest and rust belt are all hollowed out and the best job in those towns is at the Pilot Truck stop on the edge of town.
If one will take the time to, and for goodness sake, please don't pretend that Fox News never shares the truth with you,
then take 5 minutes to listen to one of the last people to ever balance the budget and it a great historian, and see what he says about tariffs, and how they perform in our economy.
Newt
Good article, and one that is full of economic truth.Quote:
Originally Posted by bigsky
Elon Musk, DOGE team offer unprecedented peek behind the curtain of Trump's cost-cutting department
If you are willing to believe what they tell you, some of the information that is and has been pushed out by the MSM may be refuted by the discussion.
Bret and Elon had an aditi0oal few minutes of Q and A.
Some additional thoughts and info are shared here
Thanks for the links
Here is one more link Mick. This is nt about tarrifs, and it does get political, and it is about illegal immigration. Some astounding facts are shared in this short X video.
https://x.com/IngrahamAngle/status/1...doge-go-public
Here is the 2nd and probably the last part of the Musk teams report to Bret. Some pretty telling stuff, and in at least one case the person working on one issue shared very positive and supportive comments about the department heads that they worked with in uncovering a lot of information.
More DOGE info
It can be proven with pretty simple and very reliable microeconomics that tariffs are in fact the least efficient, worst possible option for dealing with these issues. Economically they are a very bad idea, and the markets reflect that b/c they know it.
Now, that being said, they can be used as a short term bully tactic to get a better trade agreement. If that is what Trump is trying to do then it could work, like getting Mexico to divert illegals, or getting Canada to reduce their tariffs and protections. That works fine.
The fear is that Trump's team thinks tariffs are a way to raise money and protect US markets.
The last time that was the predominant belief in Washington they passed the Smoot-Hawley Tariff Act. It set of a trade war, not unlike what we are seeing now, which was a prime cause of the Great Depression.
Trump needs to get to the negotiating table quickly and remove these tariffs, along with Canada et al removing theirs and leveling that field I agree, or we will be in a recession by fall if not sooner.
If they were more targeted and came more as a threat to get better trade deals fine, but I fear they think this is sound long term economic policy, and it is not. It is a short term political tool used in negotiation. Given Trump's strengths I hope he sees it that way. If not then buckle up.
Chuck, it may have. BUt I am tired of the US and the US Consumer/worker being the one to compromise to stop a Great Depression. Time for the Euronuts, Canadianuts, and Asianuts to be the ones to sacrifice.Quote:
Originally Posted by CitizenBBN
The hollowed out midwest and southern towns and the abandoned lumber mills of Montana won't let me be a free market across the borders guy. We have strong environmental protections and strong worker safety protections and expectations that our industries will be part of our larger society. To abandon all of that in favor of near slave labor in Asia can't be good economics.
That's exactly the same position the EU takes on agriculture, since they don't allow mass farming, antibiotics, etc. Yet we are going to try to insist they lower those barriers, when it's obvious those methods and restrictions won't compete against us products in a fair fight, the same way with all of our restrictions we can't compete in other sectors.Quote:
Originally Posted by bigsky
Not sure which is worse. A madman at the wheel who thinks he can bully the planet without blowback, or no one at the wheel at all as we just had for 4 years.
Done right I'm all for using tariffs as a tool to negotiate better trade deals. It calls for precision, negotiation, and deal making. I'm hoping that comes soon, b/c politically Trump has put every other world leader in a position where they almost can't capitulate without being in trouble in their own elections. Hell, Canada was ready to go more MAGA before Trump united them with a common enemy, now that's very much in doubt.
So far Israel is the only country to respond the way we want this to go, where everyone just eliminates their tariffs. Unless a whole lot bigger trading partners go that general direction this is going to be a very bad year or 4.
When everyone looks at their retirement accounts and sees how years of gains are gone, they are going to pull back. Recession is now all but guaranteed unless some major positive deals get struck really quickly.
All for it, but we have to get them to do it. Backing them up in a political corner where they will be seen as betraying THEIR countries to capitulate to Trump won't get us there. They are just going to offset our tariffs with their own, and the imbalance will remain.Quote:
Originally Posted by VirginiaCat
Keep taking an eye for an eye and soon the whole world is blind.
Just don't complain when recession becomes stagflation and eventual depression. Unless this administration uses this to get us to lower tariffs and fairly quickly this will go very badly. The US economy has been shockingly resilient, and he is insistent on killing the underlying confidence that has sustained it. If people stop spending b/c they see their wealth faltering, it won't matter what tariffs we set.
Consumer and investor confidence are fickle things, and slower to recover than they are to falter. We'll see it quickly in consumer spending, next in real estate and residential home purchasing, and on the investor side some businesses with protections will maybe be happy, but most will pull back on investment and expansion.
Don’t underestimate too the lack of Federal spending that impacts rural communities, schools, hospitals, etc
And Christmas is being cancelled before the 4th of July decorations are out.
With highs tariffs on China and Vietnam where they make toys and clothes and everything else, this is a nightmare
It solidifies a dictator and outs everyone in survival mode.
I am fine with what ha happening. Good buying opportunities in the Stock Market right now and I am buying. And I fully believe the US Economy and our populace is much better able to weather the economic storm. They need our markets for their goods more than we need theirs.
And I am going to learn the lesson from COVID. We were at risk because phama and electronics came from outside our border. That is a secuirty risk. This model will change that.
Hannity and Newt talk about Tarrifs.
Linkage
The point being it is now an economic storm. Can we win a war of attrition with China? yes. To wars involve a lot of pain for all sides? You better believe it.Quote:
Originally Posted by VirginiaCat
I'll be fine. I have a small amount in the markets, which I'm kicking myself for not moving and paying the cap gains on, but I basically don't trust the markets and never have, and that is there for 15 years from now, and will be OK.
But the pain is coming if this isn't used quickly to negotiate good trade deals. I'm all for that, if that's what happens. If this becomes a protracted years long pissing contest, as it was in 1930, we will all lose big time. Sure China will lose the most, but everyone will lose.
This is either a really smart short term negotiating strategy or it is a long term shift to 1930s era economic thinking that will cause another global depression. based on their view that tariffs are a viable revenue stream I fear there is a lot of the latter in the room.
Thomas Sowell is using that exact caution today. https://www.foxbusiness.com/politics...tating-history
Here's some quotes by Vance indicating that they see this as a return to a protectionist economy versus free trade, not as a negotiating ploy: https://www.foxbusiness.com/economy/...rent-direction
Tariffs can be used politically as leverage. They are the worst possible economic tool in your toolbox, a loser in every possible way.
FWIW they are basically a hidden tax, and it can be shown they are the least efficient hidden tax available. It's actually more efficient to simply tax people and subsidize a given industry than to put in tariffs to protect it.
Tariffs have more deadweight loss than any other possible system of taxation or protection. Quotas are more efficient, as is direct taxation and subsidy. Tariffs create the most market distortion.
Of course in this case Trump is putting a tariff on basically everything, so the biggest impact will simply be reduced trade, reduced buying across the entire globe.
What happens in the US when people stop buying? We have recessions. What happens when the whole world stops buying all at once? Depressions.
Here is, literally, a microeconomics 101 textbook explaining the dead loss problem of tariffs:
https://pressbooks.bccampus.ca/uvice...r/4-7-tariffs/
This is microeconomics, not macro. This is easily provable just as supply and demand are provable. It's a fact, not open to debate economically. Tariffs cause dead loss in an economy.
The only question, the only use of them, is to in the end get rid of them. So the only positive outcome here is that Trump uses them to eliminate tariffs from other nations, and we eliminate ours.
That's it, that's the only way this is good for us economically.
Now politically if we go into a 4 year global depression does China's government lose control and become a flourishing democracy loving peace? That would be nice, but severely unlikely. Like The Great Depression it's far more likely to spawn a rise of uber nationalism that leads to more global wars.
This is extremely dumb and dangerous.
FWIW I have long called for hegemony in trade against China, and that opportunity is in this, but only if Trump stops being a bully or is at least playing bad cop, and then his Cabinet officials sit down and we reach deals with the Pacific rim countries other than China, and the EU.
That's the trade alliance we need, where we lower or eliminate tariffs within those nations. That would work fine.
THe problem is that requires a targeted effort, not a bull in a china shop. Announce your new trade alliance, offer an "out" for these tariffs, where you can join with us and have access to US markets, but only if you give access to yours and we build that relationship. I hope that is out there on the table to these nations, and it should have been done at the same time.
You use the carrot and the stick, and you work on it in advance so world leaders can join without losing face at home.
CBBN, how do you explain the fact that up until 1913 the USA did not have an income tax, and they got all of their operating capital via tarrifs?
And then Congress passed the 16th amendment and then also passed the Underwood–Simmons Act we then had Income tax plus a watered down set of tarrifs and then over time they have written, or joined various forms of trade agreements whereby our trading partners have decided to treat us poorly, especially after WWII when we felt sorry for the Euro countries and began to take on their debts and restructuring as if they were our stepchildren, and those counties apparently have assumed that our largess should go on forever.
Quote:
Originally Posted by dan_bgblue
First, we had no military to speak of. Very limited. Nothing akin to the global powers.
Second, we had no welfare system at all. No medicaid, no federal spending at all on such things. There weren't even pensions for government employees.
Third, we had no federal spending on anything that didn't affect all the states, so no transportation funding, education funding, nada.
In fact in that era there wasn't even a comprehensive budget process until 1921. There wasn't enough spending for it to be an issue.
ALso, the US was at a huge competitive advantage as a manufacturer, but had relatively smaller markets at that time for consumption due to our ability to make most things here. At that time Europe, prior to the depression, was willing to let us have 20-40% tariffs while theirs were substantially lower, without it causing a trade war.
I think those days are gone.
I'm not saying we shouldn't have fair trade, and I really hope the negotiations with the EU go well and this ploy works and we negotiate a good deal that improves overall trade.
As I said I'm all for using this as a short term POLITICAL tool to pry open markets to US goods.
What I'm against is:
1) Using it as a long term economic strategy, b/c it is horribly inefficient and in the end every other nation will simply adjust their tariffs and restrictions, limiting overall growth, and
2) Dropping a MOAB on the global markets as the first pitch instead of as the last resort to get a trade deal. As with everything else Trump does, he would rather bluster and bully than at least start with a reasoned discussion.
I'm not saying it wouldn't take this to get movement, but I think you stop insulting nations like Canada, making it much harder for them to capitulate to your terms, and try to negotiate a deal.
My gut says they think this is a sound long term economic strategy. It isn't. It's merchantilism, the very opposite of free market principles. Used to get to a free market with the EU fine, I agree. Used b/c you think this is a superior system, that's just wrong.
so trueQuote:
Originally Posted by CitizenBBN
Day three, not much let up in sight.
Even Trump's biggest economic supporters are all warning of the same thing I am.
Ackman, who backed the Republican presidential candidate in July 2024 after previously supporting the Democratic Party, acknowledged that Trump "has elevated the tariff issue to the most important geopolitical issue in the world, and he has gotten everyone’s attention."
"So far, so good. And yes, other nations have taken advantage of the U.S. by protecting their home industries at the expense of millions of our jobs and economic growth in our country," Ackman wrote. "But, by placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital."
https://www.foxbusiness.com/markets/...nuclear-winter
If this continues, and Trump continues Tariffs on the 9th, and retaliates again against China, we're in depression territory. We'll be lucky if all we get is a recession.
Trump and these idiots around him think it will drive US investment. It won't when the changes are this radical this fast. It drives everyone to hold cash. Consumers stop spending, businesses stop expanding. Not only will foreign investment stop, domestic investment and spending will stop.
We're heading for a very dark time right now. There have to be some really fast deals to eliminate these tariffs or it will get very ugly very fast.
Ackman said it best. This wasn't targeted, it wasn't just to isolate China, he put tariffs on countries like Israel who barely has tariffs against us at all, we have had a largely free trade deal with them since 1985. Or England, which we need to be pursuing as well with free trade, no we put more tariffs on them.
Trump is trying to wage unilateral economic war against the entire planet at once. Trying to get a level playing field is fine, but you don't do it by attacking everyone at once.
If this course doesn't change fast with some deals, it's going to get very very bad. My business is pretty recession proof, but no business can survive this madness for long, and most are far more dependent on a good economy.
The retraction will be brutal, the pain extensive, most of it on the lower and middle classes, and in the end politically I don't know if the GOP will win another election ever, and rightly so.
Good discussion overall by Ben Shapiro, covering the crazy mix of voices inside the Administration, and how they really need this to be about getting to free trade, and that is the only possible justification for this insanity.
https://www.youtube.com/watch?v=FsBhMm0PJh4
Also points out that you aren't isolating China if you tariff everyone (including Vietnam, a great hegemony against China btw), you are isolating US YOU IDIOT, and leading them to China. Sure it pressures the Chinese economy, but only if you don't tariff the entire rest of the planet at the same time, in which case you've just pushed the allies we need right to them.
This has to be the biggest level of economic stupid I've seen that isn't socialism. The only hope is that this is all for negotiating to zero tariffs, but I'm afraid these guys actually think tariffs are an economic win for the US.
The good news/bad news is that if they stick to this in 2 years the GOP will lose every single election in the Congress, and presumably that will end this craziness.
Well Chuck, these countries are lining up to talk to Trump about tariffs and my guess is over the next two months our trade partners are going to significantly reduce their tariffs, if not eliminate them all. The sticking point is China whose leverage is they own our bonds. All the more reason to reduce our dependence on borrowing and printing money
"Nobody will work in a factory" because chemical and electronic soma and trillions in government handouts and subsidized ngo socialism are the rule.
Sustainability and self sufficiency go hand in hand. Belt tightening means, well, that we are skinnier and hungrier.