Tuesday, July 10, 2018
The economic news during the first part of this presidency has been almost all good. Business loves Donald Trump, as he'd be the first to tell you. And, as a president named Coolidge once said, the business of America is business.
On Friday, the Labor Department said the economy added another 213,000 jobs in June--another strong jobs month. The number of employed Americans stood at more than 155 million. The jobs market breaks records month after month. And so what that the unemployment rate ticked "up" to 4 percent? That could mean that all those people who dropped out of the job hunt during the last presidency--and there were a lot of them--are back in the game now. Besides, any unemployment rate under 5 percent is what economists call Frictional Unemployment. That is, folks would simply be moving from one job to another, causing such minimal (and temporary) unemployment numbers. What it is, really, is full employment: Everybody who wants a job can get one.
So, with this endowment to the country and a legacy in the making, why does the president seem to be doing his best to reverse it all?
As of midnight Thursday night/Friday morning, the United States imposed tariffs on $34 billion in Chinese goods. President Trump had suggested he would implement another $400 billion in tariffs soon enough, but then raised the ante (as he often does) for reporters late this week. He's now talking about $500 billion in new tariffs.
Of course, surprising nobody, the Chinese struck back. The ChiComs announced their own tariffs on American goods.
"This act is typical trade bullying," a spokesman in Beijing told the press. "It seriously jeopardizes the global industrial chain ... . hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers."
The White House has its own spokesmen. What did they tell the press?
Officials for the administration told the papers that the U.S. economy is so strong that it can "withstand more pain" than its rivals, whether in China or elsewhere.
This is a policy? To withstand more pain than the next guy? Tell it to Arkansas' soybean farmers, or pork producers, or any number of other businesses that would be hurt in this tariff war the president has waded into. And that's not all. The Associated Press noted a number of companies that would be hurt when China retaliates. And would have to pass on their expenses to American consumers:
If you buy aquarium filters from PetSmart, for example, expect to pay more. If you buy a hot tub from Jacuzzi, expect to pay more. If you buy FoodSaver vacuum sealers, expect to pay more.
The Wall Street Journal--not exactly a liberal outlet of "fake news"--reported Thursday that global trade is already cooling as nations slow down shipping ahead of this coming tariff war. Experts told reporters last week that they're seeing signs of inflation. And as the global economy comes off the boiler, what it doesn't need is continued government action to cool it off more.
Why disrupt the economy at this point? In fact, why ever disrupt the economy at any point? Is the economy ever too good? Are there ever too many good-paying jobs for Americans?
There was a saying around the gym back in the 1980s: No pain, no gain.
But when it comes to Americans, their jobs, their retirement plans, their small businesses and their farms, there's another way to look at things: No pain means ... no pain.
If there's hope, it's that this president changes his mind on a dime. Let's hope he does so before too much more pain is inflicted on the rest of us.
Commentary on 07/10/2018
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