re: Trump has it right on the economy. Tariff-hating "conservatives" are clueless

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At this point it’s a choice between a 3-page partisan memo and a 150-year San Francisco Fed study.

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The Fed study confirmed the findings in the JEC report.

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Yes, the Fed showed tariffs act like a small negative demand shock, which can raise unemployment a little and lower activity a little in the short run.

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They lower economic activity in the long run also.

The reshoring of jobs won't materialize. You will save some jobs, but you will lose others. The jobs you save will come at a huge cost to US consumers. This is the truth about tariffs.

[quote]The positive relationship between tariffs and unemployment isn’t even disputed. Or so I thought? I guess you’re disputing it.[/quote
There is a nuanced relationship between tariffs and unemployment that may be difficult for a devoted leftist to struggle with. I'll try to help.

BUT - I am far from a financier - I am an engineer by education and a keen observer of the American way of life, with an intense interest in our history & a firm desire to see our way of life return to a moral, fiscally sound, basis as it was during my formative years in the '40/50's.

Tariffs, like taxes, can be good or bad = depending primarily on the motive of whomever is in charge of imposing them.

Trump is using tariffs to combat two detrimental aspects of the nation's economic status that he inherited from years of abuse by sinister forces from both parties.

1st - combating unfair trade practices of other nations.
If a country is charging high tariffs on our goods, (autos, pharmaceuticals) then our companies cannot sell their products easily and in many cases move their production facilities to other nations in order to compete. = net loss of jobs in America and loss of that capability to rely on if needed.

2nd - ensuring we can produce strategic necessities in our own country. self evident requirement.

Getting the tarriffs 'just right' is like playing a musical instrument - takes practice and careful attention to what you are doing and responding instantly to undesired results.

We cannot produce coconuts in the US = so it would be folly for us to impose tariffs on them.

We can produce pharmaceuticals = so it would be folly if we did NOT protect our own production capacity by imposing tariffs that make it economically feasible for our companies to produce them.

The only people who just react to "tariffs are just another tax to burden the consumer" need to apply the same logic to the taxes they are using to discredit the concept of tariffs.

It's really quite simple.

as simple as playing a violin.

I get using Tariffs as leverage and in some cases retaining a small, across the board tariff on certain countries that sign trade deals with the U.S. that said, do tariffs on steel and aluminum imports not increase the cost of any manufacturing and industrial buildout? Maybe cheaper lending would help offset this increase, but if DJT’s goal is a fast buildout and reinvestment, tariffs and the increased animosity between the U.S. and nations like Canada probably aren’t helping.

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The conservative right is not confused about how the economy has changed. They know America is no longer an industrial powerhouse. They simply do not care. They keep demanding a balanced budget as if Congress could ever pass cuts on the scale they imagine. It cannot. The voters will not accept it. The math will not allow it. Their message has become moral theater, not a workable plan.

Their worldview has become elitist without admitting it. They judge the economy by what pleases Wall Street, not by what builds Main Street. They defend free trade in a world where corporations use global labor markets with no overtime rules, no livable wages, weak child labor laws, and poor safety standards. That is not free enterprise. It is a way to escape American standards. It treats American workers as a cost problem instead of the foundation of the nation.

They repeat the claim that tariffs are a tax on consumers, even though the Federal Reserve’s own research shows that is not how markets behave. When tariffs appear, consumers resist higher prices, so retailers hold the line. Importers absorb cost to protect volume. Foreign exporters cut their own prices to keep access to the American market. The burden is spread across everyone, which is why tariffs barely move inflation.

The deeper issue is this. Inflation today is not driven by tariffs. It is driven by slow growth and weak productivity. And slow growth is the direct result of deindustrialization. When America built things, real growth reached four or five percent. The 1950s, 1960s, early 1980s, and late 1990s all saw strong growth because production lived here. Factories create productivity. Supply chains create innovation. Industrial jobs create rising wages. That is how debt-to-GDP stayed stable for decades without brutal cuts. Growth did the work.

A service-heavy economy cannot do that. Finance, healthcare, consulting, and compliance are large but low-multiplying. They raise revenue but not national output in a meaningful way. A hospital or law firm can grow for decades without raising national productivity. A steel mill or chip plant lifts an entire region. That difference explains why the old conservative model no longer works. The engine that once supported limited government and low debt is gone.

The real goal today is simple: stabilize debt-to-GDP and then slowly reduce it.
You cannot reach that goal through cuts alone in a slow-growth service economy. You reach it by raising the growth rate itself.

This is where Trump’s plan meets the reality the right refuses to face. Tariffs are not inflationary in practice. Their purpose is to force supply chains back to American soil, which pushes companies to invest here instead of hiding behind cheap offshore labor. Tariffs only work if paired with domestic investment, and Trump’s approach recognizes that. He understands that tariffs without investment can slow growth, but tariffs with investment rebuild the productive core that creates growth.

The Federal Reserve is fighting the wrong battle. High interest rates might cool an overheating economy, but America is not overheating. It is underbuilt. High rates choke the investment needed to rebuild factories, ports, refineries, mines, and semiconductor plants. A country trying to restore its industrial base needs lower rates and heavy capital spending. That is how you restore productivity. That is how you lift real growth from two percent to four or more. And that is how debt-to-GDP stabilizes without political chaos.

This is not ideology. It is arithmetic. A service economy cannot deliver the growth needed to manage a modern nation’s obligations. An industrial and mixed economy can. Trump’s plan aims to restore that structure. It brings supply chains home. It puts American labor back at the center of national prosperity. It ends the moral failure of letting boardrooms decide the fate of the country based on quarterly profits. It puts industrial policy back under national control.

Debt stabilization does not come from austerity speeches. It comes from strength. It comes from rising output, rising wages, rising productivity, and rising national capacity. Trump’s plan is the only one that seated in reality. It is the only plan rooted in how nations actually grow, how deficits are actually overcome.

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Then why did Trump just roll back the tariffs on over 200 food items, including beef, in direct response to inflation on those items?

LINK

I've been telling you economically challenged types for months now that Trump is going to eventually cave on all of these tariffs, because they are going to (very obviously) do all kinds of damage to the economy under his administration and he won't like that.

It's already begun.

All true.

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These are all stupid ideas

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Irrelevant. Stupid or not, these are some of the items that keep American companies from being globally competitive.

When someone says "deregulate" these are some of the things that would have to go with it to make it level across the board. Since we know this type of deregulation will never happen, tariffs are the way.

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Some of y'all need to read some Bastiat, Sowell, and Hazlitt.

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I'd settle for a class on logic. They'r'e STILL claiming that tariffs won't raise prices for the consumer but at the same time they'll magically help manufacturing return to the US.

I've always said Hazlitt should be required reading in HS. EIOL isn't real long or complicated.

If you want to invoke Hazlitt, then follow his lesson: stop fixating on the first, easiest, most superficial effect and look at the whole chain of consequences. That’s what actual logic requires. Right now you’re still stuck on Econ 101 bumper stickers while pretending you’re making deep arguments. It’s not impressive. It’s not Hazlitt. And it’s not logic.