Trump's Economic Advisers: Primed-to-Fail New Dealers?

[Phazer]

I am becoming increasingly concerned that President Trump's economic advisers embrace the policies from FDR's "New Deal" that caused the recession in the early 1930s to become America's Great Depression.

We now hear a constant insistence for international trade wars waged with importation tariffs. The latest is the "20% tax on Mexican imports to 'pay for the wall.'" When you scratch the surface on import taxes, you see how damaging they are to the American economy. Taxes on imports are not paid by other countries. The taxes are paid by American consumers that want to purchase the U.S. government-deemed offensive items. Such tariffs are designed to steer consumers to other government-acceptable products (read: American or favored-nations' products). In the long run, however, all prices rise and exports fall as foreign nations retaliate against the U.S. with their own import taxes on American products (see: Smoot-Hawley Tariff Act).

I find this all very concerning. The Trump administration seems intent replaying the failed policies of FDR - just with a new veneer. This administration seems interested in protecting only certain industries, such as steel and automobile production, from which they receive union support. This is crony capitalism. And, in the end, even American automobiles will increase in price since many of the vehicles' component parts are imported from abroad and will be taxed. That cost will be passed on to consumers. Despite the administration's economists' propaganda, those parts will not suddenly be manufactured in the U.S. at a cheaper price to fill the need. That has never been how business has worked here.

For those interested in the failure of FDR's New Deal, please read Burton Folsom's book: New Deal or Raw Deal - How FDR's Economic Legacy Has Damaged America (https://www.amazon.com/New-Deal-Raw-Economic-Damaged/dp/1416592377)

I presented Folsom's book at a history book club years ago. I am attaching a link to the PowerPoint presentation for your perusal (and education, I hope): http://www.mediafire.com/?tzwwhto54wu

 

[Phazer]

I am also worried that the Trump administration's import tariffs will become a new form of excise taxes on many products that Americans want to purchase. Those taxes will be rolled into the price of imported products and consumers will never know if the product price increases are due to market forces or government-imposed taxes. Thus, insidious excise taxes will be paid by American consumers to fill the coffers of an over-reaching central government that is intent on protecting chosen industries and guiding Americans' purchasing choices.

It was during the New Deal that the United States' primary method of revenue shifted from income taxes to excise taxes. We could be seeing an acceleration of that shift.

 

[prambo]

Economic interaction at the global level, IMHO, appears unavailable.

It is the scum like Soros, who not only make money from the international markets, as well as simultaneously destroying currencies, who take it to the point of trying to control, and strip-mine, the whole world.

How does America compete against goods manufactured overseas, with significantly cheaper, with equal or superior quality? Namely, how are we going to bring back the auto and steel industries?

Why US built cars lost their global market share is no mystery. I worked new car prep at a Lincoln-Mercury dealer in 1974. The cars were shit - poorly assembled with nonexistent quality control by workers who were making a lot of money, and didn't care at all.

How do we fix that? I really don't know.

 

[Phazer]

Why US built cars lost their global market share is no mystery. I worked new car prep at a Lincoln-Mercury dealer in 1974. The cars were shit - poorly assembled with nonexistent quality control by workers who were making a lot of money, and didn't care at all.

How do we fix that? I really don't know.

Yes, you do know...MARKET FORCES.

During the 1970s, Detroit was convinced that Americans would never be interested in the substandard small cars imported from Japan. Detroit that Americans would always "buy American." Well...the quality of those substandard Japanese cars improved. By the late 1970s and early 1980s, the quality and reliability of the Japanese cars, generally, far exceeded that of American vehicles. But, for years, Detroit was stoic in its insistence on "buy American" when they gave consumers no reason to do so and every reason to find better options. Detroit had built-in obsolescence while the Japanese cars had built-in quality. Toyota's assembly lines were upgraded based on American-invented principles (where any worker could stop the line to fix a problem) while Detroit sat on their laurels and refused to modernize.

Only when American automakers saw that they were getting killed in the marketplace, and honestly looked at why, did the quality of American vehicles ever improve. Now, when you look at the Consumer Reports Car Buyers' Guide, you see plenty of comparions of the creature comforts of vehicles and that's mostly it. Why? Well...American cars are mostly mechanically as reliable as their Japanese (and now Korean) counterparts.

American automobile quality did not improve because the government imposed protectionist import tariffs on Japanese vehicles. The quality of American automobiles only improved when the free market demanded that the quality of the American product improve if the companies wanted to continue to sell vehicles and stay in business.

Protectionism, in the age of international markets, does not work.

(BTW - My Great Depression presentation has a slide on the effects of tariff wars on automobile production and sales in the 1930s. Please see the link in the first post.)

 

[Mr. terzmo]

Trump didn't become a billionaire making bad decisions overall. I hear all the concerns expressed but the Man has been in Office a week and the "chicken little" syndrome is a bit over the edge this early in his administration. As far as trade..the previous administrations gave a lot away ...Mexico, on a side note , has no issue with deporting people who do not support the American way of life...Many have been injured or killed because of this. I support "America First"

 

[MaBoomStick]

Much truth in your words

 

[Phazer]

Trump didn't become a billionaire making bad decisions overall. I hear all the concerns expressed but the Man has been in Office a week and the "chicken little" syndrome is a bit over the edge this early in his administration. As far as trade..the previous administrations gave a lot away ...Mexico, on a side note , has no issue with deporting people who do not support the American way of life...Many have been injured or killed because of this. I support "America First"

This has a lot less to do with Trump than those in whom he has invested his trust and from whom he gets advice.

I have heard Trump's fiscal advisers actually praise the New Deal this past week.

The new president needs to become educated in the nation's historical fiscal policies, fast. I would like him to discuss the New Deal with Burton Folsom.

Remember: Many of Trump's advisers are from large industries. Those high-ranking executives have spent their lives lobbying the government for protections and policies favorable to their companies. They did the best for their individual companies. But, that is not always in the best long-term interest of our greater nation (see: problems with American auto industry and why their quality improved...it WASN'T due to protectionism and tariffs).

 

[Mr. terzmo]

"The new president needs to become educated in the nation's historical fiscal policies"

And the policies for the past 60 years has gotten the Country 20 trillion in debt. Weakened military and undocumented immigration,to name a few. A different approach may not be bad. It was forecasted that Trump would extend the deficit by 4 to 4.5 trillion in 4 years.....Obummer doubled it in 8 years from 10 to 20 trillion and I didn't hear anything said about that.
And as far as learning from history..recent history...European history already has proven the disaster of so many refugee's being let in. The President, so far has said He will protect and make America great. He's starting to protect and I'll give Him some slack for a while to make US great.

 

[Phazer]

"The new president needs to become educated in the nation's historical fiscal policies"

And the policies for the past 60 years has gotten the Country 20 trillion in debt.

That is certainly a place to start. He should not repeat the failed policies of the recent past any more than he should seek to repeat the failed policies of FDR of 100 years ago.

Weakened military and undocumented immigration,to name a few. A different approach may not be bad. It was forecasted that Trump would extend the deficit by 4 to 4.5 trillion in 4 years.....Obummer doubled it in 8 years from 10 to 20 trillion and I didn't hear anything said about that.

By the media...no. But by me...hell yes those around me heard about it.

As I tell everybody: Unless the deficit is zero, the national debt will continue to increase. Only the weak-minded, and fiscally illiterate, fell for Obama's "...well I cut the deficit in half" crap. So? You spent a god-awful amount of money that we didn't have and then only spent half of a god-awful amount of money that we didn't have in subsequent years. In the end, you still spent a god-awful amount of money that we didn't have.

And as far as learning from history..recent history...European history already has proven the disaster of so many refugee's being let in. The President, so far has said He will protect and make America great. He's starting to protect and I'll give Him some slack for a while to make US great.

I will agree with policies when they are correct. At present, Trump's policies on protecting American from illegal aliens and from radicals masquerading as refugees seem to be good policies.

But, I will always question and criticize policies that I believe are detrimental to our nation. Centralized fiscal management of private industries (overtly or covertly) is bad policy. History has proven this. It does not need to be retried to be proven yet again. We need to unleash the power of the American economy through free market principles, not through protectionist taxation legislation.

 

[prambo]

Yes, you do know...MARKET FORCES.

During the 1970s, Detroit was convinced that Americans would never be interested in the substandard small cars imported from Japan. Detroit that Americans would always "buy American." Well...the quality of those substandard Japanese cars improved. By the late 1970s and early 1980s, the quality and reliability of the Japanese cars, generally, far exceeded that of American vehicles. But, for years, Detroit was stoic in its insistence on "buy American" when they gave consumers no reason to do so and every reason to find better options. Detroit had built-in obsolescence while the Japanese cars had built-in quality. Toyota's assembly lines were upgraded based on American-invented principles (where any worker could stop the line to fix a problem) while Detroit sat on their laurels and refused to modernize.

Only when American automakers saw that they were getting killed in the marketplace, and honestly looked at why, did the quality of American vehicles ever improve. Now, when you look at the Consumer Reports Car Buyers' Guide, you see plenty of comparions of the creature comforts of vehicles and that's mostly it. Why? Well...American cars are mostly mechanically as reliable as their Japanese (and now Korean) counterparts.

American automobile quality did not improve because the government imposed protectionist import tariffs on Japanese vehicles. The quality of American automobiles only improved when the free market demanded that the quality of the American product improve if the companies wanted to continue to sell vehicles and stay in business.

Protectionism, in the age of international markets, does not work.

(BTW - My Great Depression presentation has a slide on the effects of tariff wars on automobile production and sales in the 1930s. Please see the link in the first post.)

Well said, and I couldn't agree more. Guess, for once - lol - I didn't write enough to make that clear.

The rapid increase in quality of Japanese, and then Korean made cars is the only thing that forced US automakers to get there heads out of their collective asses. They thought they had a captive market. The stuff I found poorly done, non-working features, shit paint on 1974 Mercury's, and even Lincoln's was mind-boggling. Having just gotten out of the service, having worked in a jet shop, where QC is ultra-stringent, made it even worse by comparison. On every new Mercury I prepped, I removed at least a handful of nuts, bolts and assorted fasteners from the top of the intake manifold. They were just dumped there in the factory by the workers. Have too much stuff? Fuck it - dump it on the engine.

My 2012 Chevy Cruze, bought used, is a fantastic little car, and not that expensive.

Going to check out your presentation after PT today - ooops - after PT and snow blowing.

 

[stuck in ny]

End the Norinco ban!

 

[Jezman]

Seems to me The Mexican, Asian, and other cut throat products are the ones killing our economy. How much of Asian shit gets thrown out and make new cheaper stuff to sell again? Then made cheaper. Toyota has Billions in failed Recalls as the US makers as well. My Family passed down furniture for Generations, Now furniture is passed to the dumps. Mexico and Asian laborer's are cheap and uneducated. Unlike talk of the 70's here Educated and poor work. You make Quality affordable and your business will prevail. Think of one brand name who stuck to there guns and didn't go to outside sources for cheaper cost and higher profits. There here and strong. The biggest Problem our economy faces is the Lack of Leadership from the top down. Its all about maximum profits at all cost to those who support making or serving the product. You want a striving Economy??? Then let the Strong Business men and Women make it. Stop the Huge Corporation in Government and see the Tide change. Kind of agree with the original poster that Big Business at the wheel is been a problem for lonnnnggggg time! This country took the worst hit ever when big businnes went Bankrut and President BUsshey boy did the bailout and stole our money to give it back to a failing economy. Undo that shit first.