Illustration by Michael DiMilo
Featuring the Fabulous Dadbots: Dave S., Mark M., Mark O., Dennis C., and Geoff Carter
Good am, members of the resistance:
Comms channel: reminder to follow protocols and scramble all correspondences.
Idea for political cartoon: Then and now axis of evil.
- Then (per George W.: Iran, Iraq and North Korea—he later added Cuba and Libya)–show these as small mountains or some other ‘axis’ metaphor
- Now: Dwarf them with some very nasty (Mordor…menacing red eyes…dark skies surrounding), labeled USA and Russia. Donald’s and Vlad’s angry countenances perceptible on each spiky mountain.
Trying to understand how tariffs might trickle down, not just to 401ks, but to eggs, black licorice and my other staples. Same question—but different mechanism—for all the billions in gov’t spending cuts. Looking for bot insights/education.
Tariffs:
- Most economists that I’ve come across think this will mean higher prices for consumers. Never mind the massive “pre-buys” that many corporations made anticipating these tariffs….(and in thinking about pre-buys they still create a cost—added inventory space…sometimes expensive, refrigerated, heated, cooled space…shuffling inventory around…fifo/lifo—all of which gets passed on to consumers).
- In terms of ins/outs (of cash). The outs are increases in costs eventually borne by consumers. The ins are tariffs collected by the Gobment. Where does that go? I can think of 1000 snide remarks, but balancing the budget is one where the consumers don’t get any help. Funding SS may be one. Offsetting tax cuts is one—and there, consumers do benefit. Guessing the upper strata will benefit more from tax cuts—but just a guess.
- Basic math: Foreign countries pay a tax to US. Foreign and domestic goods makers pass on cost to consumer. Is this not just an increase in taxation in disguise? I can envision a few cases where the tariffs level the playing field and somehow consumers benefit. But even then, I would think: a.) This is not large and b.) Sometimes just replaces supplier–China with supplier–US, with no cost reduction to consumers.
- In general, I don’t see an upside to tariffs. Capitalism is driven by value added, (or cost saved w/out f’ing up the value too much). And tariffs are not adding value. So, right there it feels like a non-starter.
- Yet, I understand world trade is a different equation than I’m used to fathoming. And is it true that the USA has been too benevolent on this front? I know human nature will follow the path of least resistance and if the USA has been willing to provide that path—(and this applies to defense spending as well—well….I guess…I…can…begin…sacrilege to even think this, let alone type it…but I am strong…I could get on board with part of Donald’s plan. Fair is fair. No, don’t ink me in as imperialist just yet. My fair is fair platform applies to countries of similar standards of living as the US. Basically Europe, Japan…others. On a personal level, I remember being surprised, (a little shocked), at the decadent standard of living in Milan. I had always thought of Italy as ‘struggling’ economically. Not so in Milan. Now, is that an anomaly? Dunno, but I don’t think so—plenty of other decadent places in Italy. So, there is some “space” there for Italy to do more, as one example. Switzerland is another—you’ve heard my recent wokeness to how the Swiss, while laundering all kinds of dark money, exist in quiet luxury, in a peaceful world, made peaceful by other countries. Switzerland, I suddenly woke up to, is the biggest parasite in the Milky Way.
- But, in conclusion—on tariffs—I’d like to better understand the effect on my black licorice.
DOGE whacks:
Moving on to less spending: Seems to me the Ins are less spending. Nothing really comes in, but budgets are suddenly bloated by year’s end. Where does it go?
- Balance the budget. That is, no ‘outs’. Do nothing in terms of distributing the funds, rather pay down debt to bond holders. I suppose that results in more savings. I’ve never understood the “don’t worry’ ‘bout the national debt refrain. One hears these bond holders are mostly from ??? I forget…I googled, found conflicting info. Here’s Reuter’s answer.
- Reuters: US Treasury:Who Owns US Debt?
- Don’t balance the budgets but use it to spend more on: Soc. Security. Drones and Space X Rockets. Border wall. Offset tax cuts. A check to every American. Less likely uses: Early childhood Ed. Affordable Housing Programs, DEI double down programs,… I suppose Tariff Ins could go to all of the above as well.
-D.
Yes, as I understand it, tariffs are collected by the taxing nation from the entity that is importing the goods. They are not actually paid by the exporting nation or by the exporting company. The importer faces a higher Cost of Goods Sold (just trying to give you the willies, Dave) and thus the profit margin is nicked– so the usual response is for the importer to raise the price. For the most part, the price increase is passed to the ultimate consumer, though of course there are situations where someone along the distribution chain may eat some of that cost increase in order to keep their sales levels up.
There’s an inevitable corollary to the increase in price of imported goods. That price increase is highly likely to be reflected in any domestically produced competing products. If Canadian aluminum goes up 25%, do you think US aluminum manufacturers are going to let this opportunity slide by? They may be patriotic, but their first allegiance is to their stockholders.
Where does the increased government revenue go? Simply put, into the coffers of the Treasury Department. Sure, it would be possible for the funds to be earmarked for some kind of special purpose. Gasoline excise taxes, for instance, are funneled to a transportation fund. Social Security payroll taxes go to that trust fund. But there’s been no discussion of any “directing” of the tariff revenue. So…. what happens to it really depends what Congress does fiscally. If they keep spending at the same level (ha ha), then the increased revenue would mean that this year’s deficit would be less. If you’re really optimistic, you might believe that the tariff revenue is enough to balance the budget. But if Congress goes ahead with the Trump plan to extend and increase the existing tax cuts, these tariff revenues will only help the budget situation a teeny tiny bit.
I agree tariffs are a dead weight cost on the economy, like any tax.
However, I did just listen to a NYT Daily podcast, where the foreign economic reporter described in scary detail how China is just taking over as the world’s only manufacturing superpower. World trade went up 3% last year. Chinese exports went up 17%. Apparently they are making really good cars and trucks now. They sell them everywhere in the world pretty much, except here. Even if they don’t hit our market, it’s a huge threat to not only the Big US 3, but also the German, Korean, and Japanese automakers.
Chinese imports here keep growing DESPITE the large tariffs put on by Trump in his first term, which were never repealed by Biden. The question is, is there ANY level of tariffs that can keep our manufacturers alive? And we’re already in a situation where, in many industries, the manufacturing ability and knowhow are in one place. And that’s in China.
And yes, it sounds like the entire developed world has been “too benevolent” on the China trade front. Entrenched interests here (Wall Street, big retail) fought for free trade. And without a doubt, US consumers have benefitted. But it sounds as if they’re building a huge lead. Their authoritative system is firing on all cylinders: finance, labor, regulation. The gov’t there tells the banks where to lend. So the Chinese automakers got loans for years without ever being to show a profit. Labor, including design and engineering,is cheap. And regulations allow huge industrial parks with associated apartment housing to pop up overnight.
I’ve gone on long enough, but I’ll volunteer that I’m not a “balanced budget” enthusiast. There’s no need for us to balance the budget or to pay down the debt. The better approach is to grow and inflate our way out of it. BUT…. the deficits we have been running are getting scary. We basically spent WWII levels of money during Covid. And the Bush, and now the Trump tax cuts, are blowing a huge hole in the national debt.
Our spending level, and the resulting deficits and national debt, are only possible because bondholders around the globe believe that US government debt is the safest investment in the world. If the bond market ever changes its mind on that….it’s not going to be pretty. This is why screwing around with default everytime we hit the debt limit is like playing Russian roulette.
MM
Hey bots,
I am currently in Northern India near the Chinese border. Was just speaking with some folks from Mumbai who are up here soakin’ up some cool Himalaya/Dalai Lama vibes. Their take on Trump and China is interesting.
While they view Trump and Vance as somewhat boorish and clown-like, they are also hopeful that the Trump presidency will be good for India. Their Prime Minister, Narendra Modi, is himself a populist right-wing leader with a taste for autocracy, so he and Trump have a solid bromance.
The Indians are hoping this bromance will fend off tariffs on Indian goods and help build a stronger India/USA alliance. They are also rooting for the trade war Trump seems eager to wage with China because they’ve nervously watched China overtake India as an economic power.
Okay, I’d make some other astute observations, but I’m painstakingly typing this on my iPhone while I have an Internet connection.
DC
Be so cool if you could hook up with Dia Hadid (NPR, Mumbai, but I assume she likes the herb, likes to hike). I bet she’d love our takes. Say ‘hey’ if you bump into her.
Seriously, good report. The world’s economic pendulums swing both ways.
-D.
So bots,
I’m with the general consensus that tariffs won’t do our economy much good and that DOGE cost-cutting measures are mostly just saving Elon money by busting his adversaries. I’m a little worried about the car industry here and even more worried about Social Security and Medicare, but I can’t help wondering how big a hit big pharma and the health industry would take if these social programs went away—or would they simply be replaced by privatized substitutes?
We’ve been out protesting recently, and I do have to say it helps fight the ennui and political angst in the air. And I think it is making a difference. I don’t know. Maybe when the Florida MAGA boys see their Ford F150s will cost five thousand dollars more than last year—or more—they might start waking up.
G
In the short run, the most “at risk” program is Medicaid. The ‘pubs have their eye on Medicaid cuts to finance the impending Trump tax cut.
Medicaid cuts will hammer community and rural hospitals, which are already operating on a shoestring. And the elimination of Medicaid benefits will drive people away from primary care doctor and clinic care, and into the ER. Great!
Newton’s Third Law of Politics states that, for every action there is an equal & opposite reaction. Therefore, rural voters should react negatively to further destruction of their health care ecosystem. But in Trump’s populist world of quantum mechanics uncertainty, it seems that his culture and identity war overmatches the actual damage he does to his voters.
I am relatively certain, however, that Congressional Republicans will be punished by voters when the seemingly inevitable Trump recession hits. No matter how far these toadies stick their nose up Trump’s behind, they are not the Donald! So they will get hammered.
Who do you like as the Dems’ standard bearer in ‘28? I have some thoughts.
M
Hmm. 2026?
I’m thinking Buttigieg, Pritzker, Whitmer, Walz, or Shapiro. I kind of like Pritzker except for the fact he’s a millionaire—albeit a seemingly decent guy. I wish Bernie were ten years younger. I like Whitmer, too, but I just don’t know if America is ready—even after this last clusterfuck—for a female president. Is AOC a dark horse? She’s sharp, she’s feisty, she’s shrewd, and she knows how to get in the middle of things. I like Tim, but I don’t know if he can rebound after 2024; the same with Kamala.
Of course this is all contingent on whether or not we still have free and fair elections.
G
Well…there’s the who makes sense, who is qualified, who can debate questions…then there is the who can appeal to enough voters’ questions. Different answers, perhaps no better exposed than via Dennis’s famous daughter’s flat tire/Hispanics for Trump—based on more policing—last fall. There is also this issue of blacks, especially males and WTF appeals to them (W: who not what).
Gavin was not mentioned yet…he’s made a few statements recently critical, if not disparaging of his own party. So obvious how he recognizes his Californication requires some drastic distancing. He’d be a strong debater—been practicing versus Steve Bannon lately—and I believe his heart is squarely left—just needs to hide that in these twisted times. Who else? AOC and any other women have zero chance unless the economy, eggs and our 401ks tank. It must be a sausage. Accept this, for hopefully not more than a decade more.
In what I thought was “my beautiful country, (house), I’d be pulling for Pete B. But, at least for the foreseeable future (ao’s approval ratings are still v. high)—the USA is less progressive than Turkey.
Off the wall: Is there someone in tech to counter Musk, Z and Bezos? Actually, I think all of these dudes would flip flop—many times—based on whatever their data is telling them.
How ‘bout Paul Ryan? I’d consider him as the nearest thing to sane—on the right–and electable. At this point, sane is a major attribute, since the left is moribund/a pariah in too many voter’s Trump-addled minds.
D
Gavin’s been getting hammered by the libs for going all centrist. To me this shows how out of touch the hard left can be. What is wrong with that!?! The Dems need a Bill Clinton or a Tony Blair. And guvs can win! Reagan, Carter, Clinton, all guvs. They are untainted by the stink of DC. Shapiro from Pennsylvania looks very strong, and thank goodness the Kamala campaign didn’t pick him & drag him down.
I am also looking for Rahm Emanuel. Congressman, DNC Chief, chief of staff for Obama, mayor of Chicago, ambassador to Japan. Politics is in his blood. He talks centrist because he IS one. You have to be to run Chicago.
Rahm and Pete are both excellent candidates, not necessarily because they can win, but because they are strong personalities with good ideas and great communication abilities. They will drag their rivals in the right direction.
Meanwhile on the GOP side, they’re going to face the Trump hangover without Donald Trump. I see Don Jr. sticking the knives into JD. Nobody out-Trumps Don Jr. But I think the MAGA balloon will be leaking air badly by ‘28. Still, the ‘pubs won’t be ready yet to move back to sanity (e.g. Paul Ryan).
If voter attitudes play out as I say, then the Dems have a MUCH stronger bench than the Republicans.
AOC? She takes on Chuck Schumer for the NY Senate seat.
-MM
Must admit MM is good on politics. His stuff has more value than what I read in The E and The NYT.
-D
Comments