No, I don’t want to hear one more word about how Republicans are “good for business.” Not after this week. First, we got that Tax Scam, the benefits of which went to corporations and the top 1% of income earners. That is only superficially good for business — it did precious little for consumers, the ones who actually make the US economy run. Corporations (we learned in high school General Business classes) make a profit when people buy their products or use their services. The Tax Scam benefited the Investors, not necessarily the “business” in totality. A system in which we continually cut corporate taxes in order to protect corporate revenue/profits and put the burden on consumers is a recipe for disaster.
Then the occupant of the Oval Office throws a tantrum and announced he is about to put 25% tariffs on imported steel and 10% on aluminum. If this is about a trade war with China, he’s got it exactly backwards — we get more aluminum from China than we do steel. And, now he’s finding out his steely blast will hurt Canada, “The top supplier to the U.S. in 2017 was Canada, followed by Brazil, South Korea, Mexico and Russia. Other notables include Turkey, Japan and Taiwan.” [MrktWtch] The reaction to the announcement is/was predictable:
“Trump has declared that the U.S. will impose steep tariffs on steel and aluminum imports, escalating tensions with China and other trading partners and raising the prospect of higher prices for American consumers and companies. With tensions rising over international trade, stocks closed sharply lower on Wall Street. China on Friday expressed “grave concern.” [WAPT]
While the tariffs may have an effect on aluminum importation, the damage will be downstream:
“But industries that use aluminum say there’s an ugly trade-off: Manufacturing jobs in the auto and aerospace industries might go away if the cost of aluminum rises too much. The aluminum smelting jobs that Trump wants to save account for 3 percent of the total aluminum industry jobs in the United States, according to the Aluminum Association. The other 97 percent of jobs (about 156,000) are in downstream industries that take the raw metal and make something new with it.” [WaPo]
When former President George W. Bush slapped tariffs on foreign steel (2002) we lost approximately 200,000 jobs.
“A study funded by steel producers that supported the tariffs found that the tariffs brought back 16,000 steel jobs. A study funded by steel-consuming companies that opposed the tariff found that rising prices caused 200,000 job losses, concentrated in the metal manufacturing, machinery and transportation equipment sectors, though it noted that it was not clear how much of the price increases were caused by he tariffs.” [Star.com]
The job loss numbers are disputed, ranging from about 43,000 to 200,000, but no one appears to be arguing there won’t be some downstream (and midstream) damage from the imposition of tariffs. Nor are major economic voices saying the Bush tariffs did all that much good. The Bush tariffs were removed after 21 months. And then there’s that “it’ll be easy” part.
Trade wars aren’t good for anyone. One pithy summary asserts prices will go up, American businesses will lose sales, and American trading partners are also among our biggest lenders [CNN] and thus may be less willing to purchase our bonds — remember that budget busting tax scam passed by the GOP controlled Congress and signed by an enthusiastic executive? Lovely, now that we’re racking up a mountain of indebtedness as a result of the Tax Scam, we’re ticking off our biggest lenders? In what world does this make any sense?
So, we have a Tax Scam that benefits a small investor class and backhands 99% of American income earners, a tariff plan that could easily cost more jobs than it saves. It’ll be jeans, bourbon, and motorcycles … more a signal to Congressional and Republican leadership I’d think… but I’ll cling to my opinion that the real damage will be to American agriculture.
“The tariffs announced by the administration will put the interests of other domestic industries over farmers,” American Soybean Association President John Heisdorffer, an Iowa soy grower, said in a news release. “Prior to today’s (March 1) announcement, China has indicated that it may retaliate against U.S. soybean imports, which would be devastating to U.S. soy growers. Our competitors in Brazil and Argentina are all too happy to pick up supplying the Chinese market.” [Fence Post]
But wait, we’re not finished. There’s S. 2155 coming up in the US Senate — a bill to roll back some of the reforms included in the Dodd Frank Act, enacted in the wake of the Housing Bubble Debacle. That’s right — the current mis-administration wants to reopen the Wall Street Casino and let the “investors” play the banking games which caused the last economic collapse.
Considering these three examples of incompetency and ineptitude, please — oh please — spare me any more renditions of “Republicans are Good for Business.”