Friday, April 6, 2018

Bad Economics

It really seems like the dontard is determined to cause a recession.

He is going down a path where no one wins, despite his erroneous belief that all he has to do is talk tough.

Its also problematic that he doesn't realize he is representing a party that has always favored free trade because it helps wealthy donors more than anyone else.

When Bill Clinton went along with the Republican congress and signed NAFTA it was opposed by most Democrats at the time, who wanted to protect the workers.

Free trade moves jobs to where they are the cheapest which in the case of entry level manufacturing, is not the US.

It helps sell agricultural products and services as well as some high end products but those jobs are often not in the rust belt.

The people who own businesses tend to do well, while workers see a negative impact on wage growth, because they are now competing on a wider scale.

Of course, the rust belt also lost a lot of jobs to non-union states for the same reason, the cost of labor is less.

From an economic standpoint, we were probably overpaying for certain labor, especially low skilled labor, so it had to equal itself out.

Economic theory tells you that eventually the playing field levels off and everyone sees benefits.

Before that happens though there are winners and losers and the losers are the people who had good paying, high benefit union jobs while not having significant skills.

They compete against almost everybody.

The owners and consumers benefit as prices of products go down or increase less slowly and from an economic standpoint it is better, unless you lost your job or have to work for half your old salary.

The tariffs being imposed are not gong to reverse this, we are too far down the road, but they can hurt other sectors of the economy.

The rest of us also get to pay more.

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