In Every Border Battle, There are Winners and Losers

20 Mar

One of the most controversial parts of President Trump’s proposed economic policy platform is his plan for the border adjustment tax. You’ve probably heard about it – he wants to add additional tariffs on all imports to the U.S.

If nothing more, it follows his “America First” economic philosophy. After all, we want to be exporting goods, not importing them! 

On paper, it sounds wonderful. But here’s the thing with international commerce – no matter what we do (or don’t do), there will be resulting winners and losers.

Let’s be honest, there is hardly anything made here that doesn’t have some imported component to it. We heard all about Chinese steel being used for domestic construction projects during the campaign. The point is that there are unintended consequences and negative aspects of taking a hard stance one way or the other on global commerce.

And no matter how it shakes out, any additional taxes or costs will almost certainly be passed down by companies to their customers.

This back-and-forth could start an international price war. I mean, if we start charging an additional 20 percent on all Mexican imports, for instance, who’s to say they won’t do the same or worse to us?

The global economy is already unstable. That’s not to say our international deals couldn’t use some renegotiating. However, aggressive border battles won’t do anyone much good in the long run.

Is it Time to “Sell High?”

13 Mar

The stock market has been delivering outstanding returns for a number of years now, despite some evidence that gains aren’t rooted in solid business fundamentals. I think the writing is on the wall for a correction, but I’ve thought that for a long time and it isn’t happening! Still, the fact remains that stocks are [...]

Curb Your Market Enthusiasm

6 Mar

President Trump’s first 30 days in office ushered in the biggest market returns under any president in more than 100 years. During that month, the Dow Jones Industrial Average made its largest gains since President Taft’s first 30 days in 1909. Now, I realize the president doesn’t directly impact the stock market. But the current [...]

Population Growth as Economic Stimulus?

27 Feb

We’ve all heard about the troubles with the Social Security program. From it being underfunded to fears of its insolvency, it’s clear there are issues that need to be addressed. Here’s an idea to improve things – we need more babies. The Center for Disease Control indicates the American fertility rate is down to 62.3 [...]

Americans Age 60+ Carry $66.7 Billion in Student Debt

20 Feb

When you think of retirement, what’s the first thing that comes to mind? No more rush hour, sleeping in, golf during the week, travel and…I bet I know what doesn’t come to mind – student debt. But people 65-years-old and older are the fastest growing segment of federal student loan debt holders in the U.S. [...]

Dying Industries Litter Our Economic Landscape

13 Feb

It seems all the talk lately is about jobs. How do we keep them? How do we create them? Well it’s no secret that automation, technology, legislation and globalization came together to destroy middle class jobs in the U.S., with manufacturing jobs particularly hard hit. President Trump recognized it. In fact, he won precisely because [...]

Business Community Welcomes Trump Tax, Regulatory Cuts

7 Feb

President Trump met recently with CEOs from a dozen major manufacturers, including Ford, Dell, Lockheed Martin, Tesla, Johnson & Johnson and more. The Trump administration’s message was simple and two-fold: Cuts to corporate taxes and onerous regulations are coming If manufacturing moves outside the U.S., expect stiff import tariffs The president told the CEOs that [...]

Low Rates Force Hands for Pensions, Retirees

30 Jan

Pensions may be a thing of the past in terms of benefits offered by employers and governments, but they’re still very much present-tense in their liabilities and the fact that many retirees rely on them. That makes it even more troubling that they’re underfunded, meaning their liabilities are greater than the value of assets they [...]

Policy Intentions vs. Reality

23 Jan

Since the financial meltdown in 2008-09, we’ve been engaged in one of the biggest bull markets in history. To me, a market snapshot of that period would show overvalued companies and overbearing regulation. It’s almost like pessimism fueled eight years of growth! President Trump is expected to enact pro-growth policies, but it could actually result [...]

Overwhelming Debt May Force Trump Economic Proposals

16 Jan

With Donald Trump set to be president, it’s clear we need compromise to move forward from the divisive and combative election period. But there’s a problem. We know we need compromise, but too many of us want several incompatible things at once. For instance, we want health care. That’s a noble aim – we want [...]