Countdown 82 days

THE TRUMP TARRIFS       

Tariffs are Trump’s new tool to circumvent congress and allow to pay off political allies.  This is a total subversion of the congressional powers only bestowed to them. Trump has figured out a way to rob the piggy bank without incurring national debt and have the taxpayers unknowingly pay for his dalliances. He is the king of using other people’s money and he is now being a pick pocket by using the purchase of foreign products. Trump has threatened the uses of his tariff powers if he deems to have a problem with any country.  

Trump must argue that a tariff is not an appropriation to pass the smell test and overcome congressional objections. The Constitution states in article I section 7, “All bills for raising Revenue shall originate in the House of Representatives….”. I would argue that Section 8 of the Constitution is also relevant and states, “The Congress shall have power to lay and collect taxes, Duties, Imposts, and Excises, to pay the Debts ….”  Duties laid on imports are called tariffs.

I could argue that a tariff is not a bill, although it does raise revenue.  Section 8 does not say it has the sole power and this must be the argument he uses to thumb his nose at congress.   This is the same argument prior isolationist presidents have taken when applying tariffs.

The congress can wrestle away the lunacy created by taking away the tariff lollypop to the toddler. All Congress needs to do is pass a law or include language in appropriations legislation that requires any revenue collected via a tariff must be used to pay down the national debt. The argument would be the continuation of the above Section 8, “…. to pay the Debts ….”  This shows the intent of revenues collected by these sources are meant to pay the debts of the nation and not the accrue to Presidents piggy bank. This makes the most sense considering the debt incurred can indirectly be caused by the trade deficit the tariff created and is paid for by the consumer. 

China was only a trial balloon. He collected the tariffs in the treasury before he found out he could allocate the monies any way he pleased. His continued tariffs and promised they will only create inflation, as the consumer always pays the tariffs. In an impromptu rambling briefing at Mar-a Lago, he said he was going to issue tariffs for a myriad of countries for treating us poorly and as retaliation for the tariffs, these countries have levied on our goods for years.  He has stated there is an abundance of money in the treasury collected by his tariffs and his giveaway to the farmers.

Most tariffs spark retaliation and a tariff war ensues. This is the type of war no one wins.  The consumer pays the tab and inflation becomes a norm. This is a model out of the malaise period in the economy, with the pandemic raging. We are in a virus-induced depression and actual leadership matters.

WHAT’S NEXT

Here is what Eugene Robinson wrote in The Washington Post, with the headline that reads: The wreckage that Joe Biden might inherit in November “No one should take for granted that Trump will lose to Joe Biden in November. But the more likely this result appears to be, the more clearly we can see the wreckage that Biden would inherit. Trump’s tenure has been a disaster all along, but as Election Day approaches things are getting worse- with long-term implications that are dire.  With our schools now opening willy-nilly, without a national strategy in place or even in the works, there is no chance that the novel coronavirus simply “go away” as Trump fantasizes.  So Biden’s first and biggest challenge, if he wins, may be to make decisive and effective action against Covid-19 that Trump has neglected.  Biden would inherit not just a continuing economic crisis but, perhaps, a worsening health crisis as well.  He would be left with a social crisis. Cities across the nation are still rocked by the Black Lives Matter protests over police violence and systemic racism.  None of the harm that Trump has done to the nation will automatically repair itself if Biden wins. The incoming administration would have to deal with acute crisis on top of acute crisis.  The only worse prospect is the unthinkable, Trump wins” 

How will we fare? Three crisis and no leadership currently being applied to any of them.  The virus was kicked to the governors, Trump’s use of force on protesters only proved their point and will not go away without significant necessary actions, the economy that will not fully recover for years and the misery that the virus impacted the poor and elderly the hardest.   Everything Trump has done has either prolonged the agony or shifted the payment to the piper to the next administration.

HOW DID WE GET THERE

The gap between the rich and poor has not been larger. This phenomenon has been exacerbated by the actions by Trump. Historically the gap began to increase in the 1970’s. The rich, big business and the far-right, uber-rich republicans got together with greed in mind.  Initially outsourcing of jobs was not considered. The profit motif won out and outsourcing of lower paying jobs became the norm in a race to the bottom.

Greed was unleashed and individuals were encouraged to find their own way and pull themselves up.  Market values were elevated, de-industrialization ensued and the technological revolution displaced workers with automation. This restructure made the rich richer and the poor poorer. The use of capital over labor only benefitted 20% of the population. 

What can be done now? Recently the savings rate went from 8% to 20% we can use these funds finance the small businesses and keep them whole as well as supporting state and local government during the pandemic.  The sales base of the small business has gone away as a result of the virus.  These sales will go to the larger stores and on-line and unfortunately the smaller markets will disappear.