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Trade Wars on an Otherwise Delightful Summer Day in Kansas

Tuesday was another sunny yet unusually temperate top-down summer day here in Kansas, and we had a nice meal with our California brother and his delightful longtime partner and our excellent parents, and then dropped in on Mort’s Cigar Bar in Wichita’s Old Town district to enjoy some swinging standards from the Great American Songbook performed by a crack quartet that included our favorite local chanteuse and a brilliant young musician we’ve happily known since the day he was born. After that we came home to check in on the news, though, and wound up grousing about the ongoing trade wars.
The latest development is that President Donald Trump is proposing $12 billion in subsidies to all the farmers whose bottom lines have lately been hit hard by the rest of the world’s expected retaliation to Trump’s tariffs, which offends our Kansas Republican sensibilities. Kansas grows more wheat and corn and alfalfa and all those other crops we can’t quite identify on our drives through the country than even America’s obese consumers can eat, so the state’s all-important agricultural sector has long been reliant on hungry foreign markets to buy up the excess production, and no one around here seems at all pleased that Trump has chosen to demolish such a mutually beneficial world trading order.
That $12 billion in subsidies is a nice gesture, especially if it actually happens, but it’s going to be distributed around a large number of far more populous agricultural states and amounts to a rounding error in the trillion-dollar deficit that America is predicted to incur, and around here it’s not playing well. Both of the state’s stalwart-as-usual Republican Senators are defiantly not on board with Trump’s trade war policies, and we hear the same sentiment on the ag stations we tune into on our drives around the state’s big city. The farmers and the politicians they’ve elected around here have long advocated the food stamp and subsequent welfare programs that buy up a lot of their excess production, and they’ve long relied on crop insurance and other federal subsidy programs, but with stubborn Kansas pride they’d rather make a living by selling their excellent crops on a free international market than get by on welfare.
Our own family here in the state’s big city is far more invested in the second-most-important aviation sector of the state’s economy, which is also dependent on a world market to buy up its but up its excess production of excellent aircraft, and it’s going to take a whole lot more than mere $12 billion in deficit spending to make up the difference if the rest of the world cancels all its American airplane contracts.
Here in Kansas we have our squabbles but mostly try to get along with everybody, a lesson we learned back in the “Bleeding Kansas” days, and we’re pleased to notice that Trump’s trade wars are not popular. The strategy might prove popular in the steelmaking and aluminum-produceing states that are being protected by Trump’s tariffs, but they’re probably unpopular in all the steel- and aluminum-bying states, and we don’t see it working out well for the country at large. Which might not make any difference in the coming mid-term elections at all, and given the local Democrats’ crazy turn to the far left it  probably won’t flip any seats in Kansas, except maybe in that educated and upper-crust district up in the Kansas City suburbs.
No matter how it shakes it out, we have family and friends and good music here in the state, and we  trust we’ll eventually get by.

— Bud Norman

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Steeling Ourselves for a Trade War

The smart money on Wall Street didn’t much like President Donald Trump’s announcement he would be imposing steep tariffs on imports of steel and aluminum, with the Dow dropping 500 points before recovering to end the day with a mere 400 point plunge.  Our own dumb money here on Perry Street in Wichita, Kansas, also didn’t much like it.
Neither did we like it when Trump was running for the Republican nomination for the presidency of the United States on an aggressively protectionist platform, but you know how that turned out. The protectionist racket is always tempting to the populist demagogues of both parties, and although we always prided our Republican selves on the the historical fact that our Grand Old Party has usually been less susceptible to such nonsense we must admit it does succumb from time to time. This time around we think that Trump triumphed in the primaries despite his protectionist policies, not because of them, which makes for some damned complicated politics, and as always we think it’s bad policy.
Which is damned complicated to explain, which makes it all the easier for a populist demagogue from either party to exploit. One can easily see how a 25 percent tariff on foreign steel and a 10 percent tariff on aluminum will bolster the fortunes of American steel and aluminum companies, not to mention their employees, and such a prodigiously glib populist demagogue as Trump can rightly note to his xenophobic followers that all that foreign steel and aluminum is made by foreigners, and that all that domestic steel and aluminum is made is made by Americans. Aluminum-makers don’t have quite the iconic status in American mythology as as those square-jawed and hard-hatted steelmakers in countless folk songs and Works Progress Administration murals, but you throw in wily foreigners and the feckless government negotiators who allowed them steal America’s wealth, and it’s a pretty compelling argument.
For now it’s harder to convince someone of the objective fact that to whatever extent the proposed tariffs benefit the steel-and-aluminum-selling industries they’re going to be just as costly to all the steel-and-aluminum-buying industries. All the official statistics show that domestic steel-and-aluminum-buying industries employ more Americans and make up a bigger share of the economy than steel-and-aluminum-selling ones, as one might expect, and eventually all the final consumers of the suddenly more expensive steel-and-aluminum products will also figure that out, as the smart money on Wall Street seems to have already done.
Not to mention that the rest of the world isn’t going to take Trump’s blustery threats lying down, as all his supine Republican primary opponents eventually did, so of course this mean trade war. All of the countries that Trump is slapping tariffs on can and have already announced that they will impose retaliatory tariffs on the stuff we sell them, as one might expect, and that’s also a bigger chunk of the American economy than steelmaking and aluminum-making. Trump is simultaneously threatening withdrawal from the North American Free Trade agreement, demanding a severe renegotiation our trade treaties with the European Union, has already withdrawn from the Trans-Pacific Partnership without offering any alternative but “America First,” and Wall Street isn’t the only stock-exchanging avenue in the world where they’re feeling jitters about the end of the post-World War II global economic order.
The post-World War II global economic order has worked out pretty good from our Republican perspective here on Perry Street, and even the smart money seems to agree. The global economy has expanded at an unprecedented rate,  all the predicted mass famines and global conflicts and nuclear holocaust have been largely averted, life expectancy rates have soared, and technological and cultural revolutions have provided plenty to do with the spare time. The Yankee dollar is still the word’s reserve currency, which sustains the otherwise unsustainable debt the Republicans are currently racking up, and America retains an economic might that Trump likes to boast about. Countless countries have joined the modern economic and Democratic and middle class world, and it’s hard to see a downside unless you think those wily foreigners stole all that money from us, and are the reason you don’t own a bigger boat of broader-screened television.
A lot of Republicans and Democrats apparently believe that, as they always have, but in the end bad policy is always bad politics. The self-described socialist Vermont Sen. Bernie Sander’s leftward wing of the Democratic fully agrees with Trump’s protectionist policies, but probably by the mid-terms and certainly the next presidential election they’ll be moving toward the center. For now those hated establishment types who crafted the post-World War II economic are reviled by the Trumpian Republican Party, but that also might not last long.
The protectionist racket is only popular so long as  it works, after all, and isn’t really a matter of political ideology or party affiliation. If you’re in an industry that’s vulnerable to foreign competition, you’re for it, and if you do a lot of export business with those wily foreigners you’re against it. Here in the reliably Republican state of Kansas the two biggest chunks of the economy are agriculture and aviation, respectively, which happen to be America’s biggest export industries, respectfully, and although Trump beat the likes of Democratic nominee Hillary Clinton handily in the general election he came in a distant third in the state’s Republican caucus.
Despite his popular vote thumping Trump’s protectionist promises put him over the Electoral College top in such rust-belt states as Michigan and Pennsylvania, which are saddled with industries more in need of protection from foreign competition, but in the end that won’t do him much good. Even in the protectionist states there are more steel-and-aluminum-buyers than steel-and-aluminum sellers, however, and the Democrats there aren’t going to vote for Trump even if he defies the National Rifle Association and brings about a single-payer national health insurance policy. With the smart money on Wall Street abandoning him, and the rest of the post-World War II global economic order retaliating, and economic logic holdings its usual sway, we think he’s already lost this fight.
At least he fights, as we’re sure the die-hard Trump defenders will say.

— Bud Norman

About Pigford

Yesterday was “Blog About Pigford Day” throughout America, but we couldn’t resist poking fun at the president’s self-pitying press conference instead. We don’t care for the neologism “blog,” especially as a verb, but we do feel obliged to help with the day’s worthy cause of drawing attention to the Pigford story.
Pigford, in case you didn’t know, is the shorthand designation for the fiasco that has resulted from the case of Pigford v. Glickman. Timothy Pigford was by all accounts a fine fellow and a hard-working farmer who believed he had been denied assistance by the United States Department of Agriculture because he was black, and Dan Glickman was the Secretary of Agriculture at the time the suit was filed many years after the alleged discrimination occurred. Glickman is also a local boy who served several terms as our district’s congressman, and we know him to be a fine fellow despite being a Democrat, but Pigford was able to definitively prove that the discrimination had indeed happened so in 1999 the government meekly agreed to a $50,000 settlement with Pigford and 2,000 or so other black farmers who had joined the suit with similar tales. At that point the case represented a victory for fair play on the farms, a good news story hardly worth writing about, but of course it did not end there.
For the next several years the government fought off lawsuits by Hispanic and female farmers who hoped to cash in on the Pigford precedent, and that effort came to an abrupt halt when President Barack Obama was inaugurated. The political appointees of Obama Justice and Agriculture departments overruled the vehement objections of the career officials to establish a $1.33 billion fund to compensate thousands of people who had never claimed bias in court. By now more than 90,000 people have filed claims, for a tab of $4.4 billion, and many of those claims are by people who were farmed at all.
The story was a pet peeve of Andrew Breitbart, the great conservative provocateur, and after his untimely death his eponymous news organization continued to undercover the many cases of fraud that inevitably followed the government throwing around billions of guilt-ridden dollars. The efforts of Breitbart.com have successfully tugged even the almighty New York Times into covering the story, with a pretty good report that acknowledges the widespread abuse of the program, but the organization nonethless called for a “Blog About Pigford Day” in order to whip up the appropriate outrage. We’re glad to help out, even if a day late, and since we’re writing this yesterday we’ve technically met yet another deadline.

— Bud Norman