You may have seen this video from CNN earlier this week. CNN’s Kate Bolduan interviews Ohio farmer Christopher Gibbs. Gibbs is having a very hard time understanding the sense of Trump’s tariff policies, as I am sure many farmers are.
Video @8.5 minutes
In the middle of the video Mr. Gibbs makes great points about how the tariffs are not actually paid for by foreign countries but by importers in the US who in turn pass the increased cost on to US retailers who pass it on to consumers. In the end the cost of the tariffs is borne by the US consumer. In most cases this acts as a regressive form of taxation that hits the poorest hardest.
The administration claims that the money to subsidize farmers whose markets have disappeared due to bad policies will come from the tariffs. As we have seen above this money actually comes from the American consumer in the form of higher costs for goods.
However, if the money raised through tariffs is not enough where then will the money come from. Well, eventually it will come from adding to our deficit spending. We finance our deficit spending by selling treasury bonds. Who are the purchasers of our treasury bonds? The major purchaser is the very same China that we are having a trade war with.
Does it feel a bit to you like we are going into battle against our banker? Sure does to me. Plus as we go deeper in debt, China among others will be purchasing this debt and making some money on it. Brilliant plan, don’t you think?
Mr. Gibbs also notes that purchases he has to make to keep his farm running are made with a lot of steel and aluminum which the administration has also imposed tariffs on. Therefore, Mr. Gibbs as the end consumer of the steel and aluminum products is the eventual tariff payer. As a farmer, Mr. Gibbs is getting royally screwed by the administration on both ends.
Add to the mix Senator Tom Cotton of Arkansas trying to shut farmers up by claiming taking the brunt of poorly thought out and poorly executed policies is patriotic. Not by a country mile, Mr. Cotton. The patriotic thing to do when an administration enacts demonstrably bad policies that are really putting the screws to people is to speak out loudly as Mr. Gibbs is doing.
Instead of going into debt to create the funds to subsidize farmers hurt by the bad policies, perhaps the Trumpist party should roll back some of the huge tax cuts given to the very wealthiest in December of 2017 that are driving our deficits through the ceiling as well as the national debt.
Ballooning the national debt has been a Trumpist party strategy since the Reagan years. The idea was to get the national debt so high that programs would have to be cut – social programs of course. Social Security, Medicare, Medicaid, education etc. Funny thing is that Trumpists keep ballooning the debt with foolish wars and tax cuts for the wealthy.
The current situation leads to a couple of questions I have not heard discussed. Maybe I am not paying attention.
Will farmers be planting this year? If they do what will they be planting? If there is no end to the stalemate, where will the harvest go? As I understand it, most storage is still filled with last year’s harvest. I would imagine this is causing some sleepless nights on farms around the country.
One last comment – Trump claims he wins and wins and wins. What has he won? He claims to have won with Kim Jung Il, yet Kim is still sending up missiles. His border policies are a disaster causing one of the great humanitarian crises of all time with thousands of children locked in cages.
We treat our allies in the world like they are our enemies. Even Angela Merkel called for greater European cooperation to guard against Russia, China and the US.
We have broken treaties and taken giant strides backward in so many areas since January 2017.
What we are seeing is not winning. What we are seeing is an incompetent leader diverting attention daily from yesterday’s incompetent screw up. All that to divert attention from his crimes before and while in office.
And if you think Trump will wrestle Xi Jing Ping into submission on trade, all you have to do is look to see how he has fared against a much lesser light in Kim Jung Il.