In one tweet he proclaimed he was the “Tariff Man”. In that same tweet he boasted he was “Making America Rich Again.” It never occurred to him that he was making Americans poor again. The Tariff Man would not be able to grasp that kind of thinking. He could not figure out that what’s good for the gander may not be so good for the gosling.
He might not but there are many who are able to understand that concept; perhaps, that is because they read and do not think with their guts. We’ve heard how his former secretary of state reaffirmed what should be common knowledge that he is “pretty undisciplined, doesn’t like to read, doesn’t read briefing reports, doesn’t like to get into the details of a lot of things”
It is because he doesn’t read and has a facile understanding of matters that he has a first grade idea about what it means to be the Tariff Man. What shows this more than anything else is Trump’s reaction to the plunge of the stock market. When the first big one happened in February 2018 he tweeted ,“In the old days when good news was reported the stock market would go up. Today when good news is reported, the stock market down. Big mistake. And we have so much good, great news about the economy.”
There is no reason to believe he thinks any differently about the stock market’s recent plunge> To him and many Americans everything appears rosy? Unemployment is at record lows,wage gains are steadily occurring, and consumer confidence is close to or at an all time high. The economy in America is sailing along smoothly yet folks on Wall Street are in a near panic.
The stock market this year has not been this bad since 1972. Every major index has turned negative. Not only that the Dow Jones Industrial Average during October 2018 had one of the most volatile months in 118 years based on daily percentage swings. Nothing like it happened since 1900. These are the times that try men’s souls if they are in the market.
Huge volatility coupled with the plunging prices tells of a spooked investment class; what makes things worse is there are no safe harbors. There is confusion running amok among the stock advisers. Should I sell or should I ride it out? Even the slightest uncertainty brings about dire results.
Why is it that? It is simple. Wall Street looks into the future. The Tariff Man’s mercurial actions have brought about a great the state of uncertainty so the future is opaque. That has caused the Wall Street to looked back to examine past conditions that mirror today’s. They are ominous.
To understand the fear you must recognize that tariffs have not been used for decades as retaliatory measures because they are an imperfect tool and highly destructive. A tariff on goods of 20% means something costing 1000 will cost 1200. The 200 is paid to the government imposing the tariff; the 200 is paid by the consumer or business using the goods. In other words the tariff is a tax upon the people because they pay it in the end.
Trump’s tariff is paid for by the American consumer. Tariffs cause the cost of goods to go up. That will cause a rise in the inflation rate. To combat that and keep inflation under control interests rates must rise. This causes the cost of borrowing to go up adding to the inflation. Both of these are hits to the American people who will have to cut back on spending causing unemployment to increase which adds to the cycle of decreasing consumer spending
What is astonishing is the Tariff Man was handed a growing economy and relatively low unemployment. His tax cuts for the wealthy further spurred things along. There was no need for tariffs.
Tariffs are supposed to help the American industries. Perhaps they may have when things were simpler but even that is questionable. Like Rome new factories in America are not going to be built in a day. It takes years. But the tariffs because of the higher prices will decrease the demands for goods which will make industrialists reluctant to make the necessary financial commitments to build new plants.
Tariff Man’s simplicity is now coming to the fore. The problem is that it is difficult telling a simple-minded man that his solutions are simple-minded.
The earliest reference of the character Simple Simon ‘is related to an illustrated ballad chap-book from 1685 called “Simple Simon’s Misfortunes and his Wife Margery’s Cruelty” One verse tells us: ‘Says the pie man to Simple Simon, Show me first your penny; Says Simple Simon to the pieman, Indeed I have not any.” Let’s home the U.S. is not put in the position of Simple Simon after the Tariff Man finishes with us.