The trade and economy mega-thread (1 Viewer)

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    U.S. Blues
    Mar 26, 2019
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    Charleston, SC
    Is there a trade deal with China? Is it really a deal or just a pull-back to status quo ante? Is Trump advancing US interests in this well-executed trade battle plan or was this poorly conceived from the start . . . and harmful?

    I think the jury's still out, but I haven't seen that the Chinese are offering much in compromise - and it's not even clear if there's going to be an agreement. But it's clear they are working on something and I'm sure Trump will sell it as the greatest trade deal ever. The proof will be in the details.

    It's interesting to see this being admitted by the administration. This is a horse I was beating over on the PDB, but I think the biggest fallacy of Trump's economic plan was that it failed (effectively squandered) one of the largest tax cuts in history. The package was designed to achieve substantial GDP growth by giving companies a large in-flux in cash (tax savings) and some policy/treatment changes to encourage growth (e.g. accelerated depreciation, repatriation, etc.). And getting it done required massive deficit spending.

    The argument, however, was that the hit to the deficit will be softened (even eliminated) by the resulting growth. Okay, maybe that premise is fair in theory - but then the very same administration launched a trade war that clouded the ability to project markets and future revenue for just about every board room in the country.

    For companies to engage in growth spending, they need two things: (1) capital and (2) optimism that their spending will yield a multiple of growth for the company. The trade war so substantially impaired that second prong that many companies decided to other things with their tax surplus . . . often in the form of buy-backs and dividends, that enrich shareholders but do not yield growth.

    So Trump and the GOP asked the American public to commit a trillion dollars in debt spending to this plan on the idea that it would be worth it. I think most economic analysis both now and in the future will demonstrate that the bargain probably wasn't worth it - the GDP growth following the tax cut and policy package was meaningful, but only marginally effective as to the stated goal. And the single biggest, most obvious reason for that was the administration's pivot to an aggressive, confrontational posture on trade - that made many companies gun shy on spending their tax savings. So instead of the bargain the plan promised in the form of >5% GDP growth, we got what can be argued was treated by many companies as a transfer of wealth from the federal government balance sheet directly to corporate shareholders (in a nation where 56% of all corporate shares are owned by the top 1% of wealth, and another 32% are owned by the next 9%).

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    It's the blind and dumb bull on crack in the China shop approach.

    It usually ends up with an insurance claim and a bunch of broken stuff.
    I was also just sickened by his stupidity on the trade wars. He used a sort of nuclear option to goose the economy and then peed it away with his idiotic trade policies.
    Well this OPEC oil trade war is gonna cost plenty of jobs here.

    A quick 20 percent drop is not expected to be it. They expect oil to get into the 20s a barrel range.

    That will kill all the shale production in the US won't be cost-effective.

    I thought both Russia and Saudi Arabia were Trump's pals. This is gonna kill jobs quickly.
    Let the Bailout for the Oil industry talk begin. More welfare for oil companies to save trump's rich friends and keep him in the Whitehouse.

    Didn't the Tea Party rise up after the stimulus package passed under Obama? Think they'd rise up again over this? Yeah, I doubt it too.
    Well my 401 took a dump but the silver lining is I paid 1.68 a gallon in the parish today.

    I can't remember the last time it was that cheap.
    Stock market is approaching where it was on inauguration day...


    Today is not looking good. That dude should just keep his mouth shut. The more he opens it the more it goes down.

    Here is a great article I read about where the market started for both Obama and trump.

    Today is not looking good. That dude should just keep his mouth shut. The more he opens it the more it goes down.

    Here is a great article I read about where the market started for both Obama and trump.

    he just sealed his re-election fate imo.

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