Economics is one of those subjects that when it is mentioned most people glaze over….they could care less about the term as long as they are making money they are happy…..that is until someone mentions socialism then they have an opinion…..usually it is not well informed but it is an opinion.
I try to help my readers understand a wide array of subjects and I try to keep them as simple as possible so they can be understood.
In his attempt to “Make America Great Again” our Dear Leader has started with imposing tariffs on our biggest competitors…..and these tariffs are starting to effect our farmers…..
New trade data provides tangible evidence that some elements of President Trump’s trade wars are backfiring.
Prices for agricultural exports fell 5.3% in July, the biggest drop since 2011. The price of soybeans fell 14.1%, accounting for most of the overall drop. There were also small declines in the price of corn, wheat, fruit and nut exports. Overall export prices fell 0.5%, the biggest drop in more than a year, with agriculture causing most of the decline.
Beginning July 6, China imposed 25% tariffs on a variety of American agricultural products, including soybeans, corn, poultry and pork. Tariffs are a tax that instantly raise the cost of the targeted product, so $100 of soybeans would cost $125 with China’s 25% tariff. The tariffs have led some purchasers in China to cancel orders for U.S. agricultural products and seek cheaper commodities from other nations not subject to the new tariffs. Diminished demand pushes down prices and lowers farmers’ incomes.
How long will his tariffs plug away at our farmers?
Almost daily reports are to the people that the markets are setting new highs and corporate earnings are up and unemployment is hitting new lows and…….
But does that mean everything is alright?
The Lamestream Fake News Lyin’ Media is often accused of never reporting the good news when it comes to Donald Trump, American president. So here are some fair tidings: the stock market is mostly up! So are corporate earnings! GDP growth is strong! Unemployment is near historic lows! That includes black unemployment, although the president mostly uses the stat as a cudgel against accurate assessments of his rhetoric on race!
Now, it’s important to keep in mind that these findings are actually continuations of longstanding trends that began a few years into the Obama administration. Take the S&P 500:
Wages is the big problem……while CEOs are raking in historically high bonuses and incomes the normal worker is not making the same ….their wages are stagnant and have been for decades…..
Some say the US is overdue for another “market correction”……
Economists debate, inconclusively, this question: Do economic expansions die of old age (the current one began in June 2009) or are they slain by big events or bad policies? What is known is that all expansions end. God, a wit has warned, is going to come down and pull civilization over for speeding. When He, or something, decides that today’s expansion, currently in its 111th month (approaching twice the 58-month average length of post-1945 expansions), has gone on long enough, the contraction probably will begin with the annual budget deficit exceeding $1 trillion.
The president’s Office of Management and Budget – not that there really is a meaningful budget getting actual management – projects that the deficit for fiscal year 2019, which begins in six weeks, will be $1.085 trillion. This is while the economy is, according to the economic historian in the Oval Office, “as good as it’s ever been, ever.”
Capitalism is always just one “correction” away from disaster…….