Wednesday, March 28, 2018

Economic Odds and Ends

Beware: The Ides of March
Ever since Trump enacted on his campaign pledge to protect American workers from the ravages of global trade where every nation takes advantage of the US by exploiting our economy for their own benefit, world stock markets and global trade partners have been up in arms. Why, I ask? Who is the tax on?
The moment after Trump signed to enact tariffs on steel and aluminum, the loophole surfaced. The exemption could take place after a summited negotiation in other words, no tariff to you. This is the perfect example of what is wrong with our democracy in our time. For example, you have a great idea. You offer a bill to Congress. Then, every member agrees with you...if you opt out to help my state. Then, lobbyist approach you with money to exclude so-and-so and what does America get? A watered-down bill done in a half-ass manner that does more harm than good. This is what Trump has done. I love him for trying, but doing things in a half-ass manner is no help. It gets worse.
First, he added that Canada and Mexico were exempt under NAFTA. A week later, Trump included the EU to the exempt list. Keep in mind, that the so-called tariffs will not go into effect until a 30-day period of transition. In the meantime, Japan and others seek to be included in the exempt category. So, I ask,
who is the tariff on?
Meanwhile, Trump signed the bill to keep the government funded. This cost taxpayers $1.3 trillion and it is only good for six months! In addition, the global vandals dumped excess amount of their crap on us to which our present account deficit is up 26% in the current year. Whatever deficits were projected, now they are on course to be 26% higher. I say, no exemptions for anyone!
Beat Goes On...
The Fed raised interest rates a whole quarter point, Whoopee! But, they still claim that their inflation target of 2% has not been reached. Oh, really? Consider this reality...
General Mills reported earnings. In their statement they said higher shipping costs and higher food costs effected profits. 
In report after report from construction builders, statements repeat this message: We saw higher materials costs, faced higher wages and the price of land not to mention the cost of regulations.
Housing report said the cost of a new home is up another 10% from a year ago at $326,000. I know one thing. I can't afford one!
Midland, Texas is booming due to higher oil prices. Hotel bookings are up as well as hotel rates. They doubled from 2016. This is ground zero to dig for oil, especially shale.
Enter Weather
The northeast has had the worst snow season in 130 years. This will bust state and city budgets. However, the biggest economic effect will be felt by the airlines. There were over 10,000 flight cancellations up to now for the month of March. However, fixed costs still had to be paid. In addition, the airlines faced higher fuel costs as oil has rallied on the rumor that Trump may end the Iran nuclear deal. Our economy is doing well and that alone caused oil to rally. Citizens everywhere face higher gasoline costs, heating oil costs and Trump has indicated that he wants to increase the federal gas tax. Not looking good. Hey, new Fed guy, Powell, did you read this?
Now, I stated above that the EU were exempt from the new tariff by Trump, but the EU in seeking revenues like all governments, has enacted a tax on technology to which they claim has nothing to do with a tariff retaliation. We should say and do similar to EU companies. A billion here, a billion there and maybe we could start to cut our deficits?
Speaking of technology, Facebook screwed up. Their selling of personal data for their personal gain has hit the fan. Regulations will come along with taxes on technology unless the technology lobbyists offer more money to re-elect our so-called leaders.
Of course, this will happen. Trump should realize that the US is the trump card. No nation could afford to lose their market niche in our economy. He should stay tough. Show some cojones! China said that they will target $3 billion in new tariffs to selected targets. Yeah, screw you, you phonies! In reality, China is the poster child for protectionism. Their companies are state sponsored which gives them an endless piggybank, favorable regulations and the most outrageous environment for foreign companies operating in China. They must be called Chinese companies. So, Intel in China is a Chinese company. The same for Apple, Mercedes, whomever. By the way, this is a distortion of world GDP. Foreign entities on sales and production is counted in China as Chinese, while at the same time, the same results are counted back in their nation of origin. Anyway, China forces every company to disclose all company intellectual knowledge and then, they steal it. SCREW THEM! In their retaliation, they selected  political swing states and the products that these states export like Ohio and Wisconsin. They also indicated that they might target airlines, autos, soybeans and pork. They even hinted that they may buy less US bonds. I say, BRING IT ON!
Enter the Shills...
It didn't take long for the shills in our society to get their say on the matter. That is almost a sick joke. We know where they stand. They just try to camouflaged their position. They are saying that we should not attempt to protect old industries like steel and coal, but new alternative industries like solar and wind. If you stop and just read their message, it sounds legit. It isn't. It is misdirection. I say that we protect everything and after the dust settles, see what is best for our future and exempt the rest. Trump, stay the course! No exemptions! Just look around! Our retail industry is dying like Toys 'R Us. They are closing all their stores and 33,000 people will be looking for work.  I repeat, No Exemptions!