Tag: trade
trump administration

Not Too Soon To Ask How We Can Repair Trump's Wreckage

One of the more interesting, and more hopeful, questions I like to think about is: how long will it take to repair the damage done by the Trump administration? As a member of the Biden admin, I have personal experience fixing some of what got broken in Trump 1. (EG, they did a good job supporting the creation of the COVID vax but blew the distribution; also, international relations).

The trade war is an obvious candidate, but we now need to think about their newly passed budget bill in this context.

The more one learns about the bill, the more it resembles a computer virus embedded in our economy and society, infecting policy in dozens of areas, and such viruses are hard to extract. The big ticket items—the upwardly skewed tax cuts and downwardly skewed spending cuts—have gotten ample attention. The cuts to renewable energy production, a bit less so; same with reductions in debt relief for college loans. And then there are a slew of “earmarks”—tax breaks for special interests—that have gotten very little attention. Politico does an excellent job collecting e.g.’s, some of which I relegate to an appendix.

Extracting such a virus will require the same type of focus and drive that Trump and the Republicans brought to the task. In a recent post, I argued that Ds need to both emulate this focused energy while reverse engineering the tariffs and budget on behalf of actually helping people who need it, versus pretending to do so while screwing them.

What will that look like?

Unwinding the sweeping (versus narrowly targeted) tariffs, given that they’re non-legislative, should be a slam-dunk, though it will require Ds not to fold when some interest group, be they industry or union, objects.

We’re also going to have to be willing to both unwind some tax cuts and seek new revenues. We already did some of the analytic work re the latter task in the Biden administration: our proposed budgets—which never got anywhere in the divided gov’t we mostly faced—proposed significant, highly progressive revenue-raising tax hikes, but only on a narrow slice at the top of the income scale. That’s not enough to get back on a more sustainable fiscal path, which is where we need to be if we’re going to not only reverse the new cuts in the safety net but also address affordability shortfalls in housing, child care, health care, and higher ed. But it’s the right place to start, as shown in this chart from Brendan Duke (see third bar).

That shouldn’t be a heavy lift for Ds, at least not for those who aren’t in the same donors’ pockets as the Rs who passed this beast. In fact, our proposed tax hikes above $400K had a lot of support from Ds, many of whom pushed us to go further.

They were right, and this means that Democrats are going need some spine to reverse tax cuts in the bill that have some constituent support but are terribly designed. The no-tax-on-tips leaves out a big group of tipped workers with no federal tax liability from which to deduct the tax break (they’d get actual, and much needed, help from an increase in the federal minimum wage, still stuck at $7.25!). And while the tip deduction may help some of the waitress, it does nothing for the cooks. The $6,000 seniors’ deduction, along with the lifting of the SALT cap, mostly give more money to people who are doing fine without the extra help.

Next, we’ll need to restore the cuts to the safety net. Again, this should not be a heavy lift for Ds, especially given the vast unpopularity of these cuts. The questions at that point will be more about expansion. Health coverage and groceries are at the heart of the affordability crisis, points that should lead attacks on the bill (the cuts mostly kick in after the midterms, so this argument must be made in bomb-defusing terms I discuss below). Thus, expanding coverage further up the income scale is worthy of consideration, as is lowering the age for Medicare eligibility. Again, this takes revenue, which circles back to reversing tax cuts and adding new revenue increases.

Then we’ll need to get back to the industrial policy that was generating important, significant investment in renewable energy production. This too shouldn’t be a heavy lift as the production tax credits that the bill ends had very broad support, which is one reason for the deep unpopularity of the Trump budget. Even traditional Rs like the Chamber of Commerce and energy companies that recognize renewable energy production is part of their and our futures don’t understand the motivation for these cuts which seem to be driven wholly by Trump’s nostalgia for coal and distaste for wind turbines blocking his view.

Reversing the harsh deportation measures, along with funding for the wall and ICE, must also be part of this effort, but this one is complex and deserves its own later post. Any Democratic action in this area must be forthright about the need to maintain secure borders. But fair-minded people should all take solace from the fact that the Trump admin’s cruelty in this place is recognized by majorities of Americans, who are both unhappy and shocked by the ongoing extremism of masked, unidentified people grabbing people off the streets and throwing them into vans and airplanes, not to mention the local realities of losing a significant chunk of their workforces.

The only way we’ll be able to do any of this is through the same budget reconciliation process that the Rs used to pass this bill (it avoids a Senate filibuster). Which is another way of saying that the ability to right the wrongs being perpetrated is conditional on Trumps’ opponents gaining power. This, in turn, requires us to deal with the timing of the bill wherein many—not all—of the goodies (tax cuts) come first and the pain (health coverage and SNAP cuts) come later. But campaigning on defusing a time bomb seems like a perfectly reasonable strategy to me, especially if we keep the pressure on by constantly pointing out the falsehoods used to sell the package.

For example, the admin claims deficit reduction from the bill starting this year, followed by quite large reductions next year. That’s unlikely, and requires tracking. Ending credits for the production of renewable energy occurs this year and next, and this too should be scrutinized for job losses and energy-cost impacts.

I hate to say it but this is only day 167 of this administration. There will be a lot more damage to reveal and elevate along with damage-reversal planning to do as the months roll on. But, especially in the days around July 4th, I like to think about this as a labor of love for this country, which needs a whole lot of that right about now.

Appendix: Earmarked tax breaks in the new bill that you might have missed.

From Politico:

Senate Republicans not only kept a House-approved provision exempting gun silencers from a long-standing $200 tax on firearms — they dumped the tax on all guns it applied to, except machine guns and what the legislation terms “a destructive device.” That cost: $1.7 billion.

There’s a new supersized deduction for business meals — though only for employees at certain Alaskan fishing boats and processing plants, with the measure stipulating the facilities must be “located in the United States north of 50 degrees north latitude” though not in a “metropolitan statistical area.”

There’s a $2 billion break important to the rum industry and, tangentially, Louisiana, said Sen. Bill Cassidy (R-La.), a tax writer…“We have the highest per capita intake of alcohol in the nation,” he said.

…an expansion of a little-known break that Silicon Valley investors have used to nix tax bills on tens and even hundreds of millions of dollars in earnings from Internet startups. Another spends $26 billion to create a new $1,700 credit for people who give to groups providing scholarships for children to attend private school.

Sen. Mitch McConnell (R-KY) secured a $7 billion tax cut for farmers that allows them to postpone paying some of the capital gains taxes they owe when selling off farmland.

…a $1 billion provision allowing “spaceports” — which the legislation defines as “any facility located at or in close proximity to a launch site or reentry site” — to sell tax-exempt bonds…Sen. Ron Wyden, the chamber’s top Democratic tax writer, said in an X post that “Trump’s wedding gift to [Jeff] Bezos and birthday gift to [Elon] Musk were tucked in the new budget bill.

Reprinted with permission from Substack.

On Wall Street, 'TACO Trade' Meme Mocks Trump -- And He's Pissed

On Wall Street, 'TACO Trade' Meme Mocks Trump -- And He's Pissed

President Donald Trump went on quite the emotional journey Wednesday after a reporter informed him that the financial community has coined a new term for dealing with his chaotic tariff threats: the “TACO trade,” which stands for Trump Always Chickens Out.

The revelation followed an Oval Office ceremony to swear in bottled-water tantrum thrower and former Fox News host Jeanine Pirro as Interim U.S. Attorney for the District of Washington.

“Oh, isn’t that nice—I chickened out. I never heard that,” Trump responded, seemingly unaware that his trade “strategy” of bluster followed by retreat is being mocked by the very finance bros he seeks approval from.

Trump worked himself up into a lather trying to defend his wounded ego, bragging that he is opening China and characterizing his latest capitulation to the European Union after threatening 50 percent tariffs as strategic.

“We have the hottest country in the world right now,” Trump said, quoting an alleged compliment from the king of Saudi Arabia. “Six months ago, this country was stone cold, dead. We had a dead country.”

A still rambling Trump proceeded to admit that he had to reduce his crazy high proposed tariff rates after realizing, “Wow, that's high.” It isn’t the first time that Trump has confessed to making up numbers when blabbing out misguided policies.

Trump closed with one of his routine attacks on the free press, admonishing the reporter who hurt his feelings by telling him the truth.

“But don't ever say what you said. That's a nasty question,” he whined. “To me that’s the nastiest question.”

That query was the least nasty thing about being in a room where Pirro had just been sworn in for anything other than a deposition.

Reprinted with permission from Daily Kos.

Prime Minister Keir Starmer

Desperate For 'Deals,' Trump Hypes Tiny UK Trade Agreement

Americans are struggling with price increases and economic uncertainty brought on by President Donald Trump’s tariffs, and the situation remains unchanged after Trump announced a supposed “deal” with the United Kingdom on Thursday.

“Together with our strong Ally, the United Kingdom, we have reached the first, historic Trade Deal since Liberation Day,” Trump wrote in a Truth Social post. In another post he characterized the announcement as “full and comprehensive.”

But almost immediately, Trump’s political spin began to fall apart when compared to the facts.

The so-called “deal” will keep in place the blanket 10 percent tariffs that Trump imposed across the world with America’s trading partners, with exceptions for some luxury goods.

Trump got a public relations boost from U.K. Prime Minister Keir Starmer, who highlighted the agreement announcement coinciding with Victory in Europe Day, the day in which the Allies won victory in Europe in World War II. Trump is an antisemite who allies himself with right-wing racists and who praised Nazis as “very fine people.”

In contrast to Trump’s grandiose claims, Agriculture Secretary Brooke Rollins admitted to Fox Business, “It is an agreement in concept. There’s a lot of details to be worked out.”

Economist Justin Wolfers of the University of Michigan threw cold water on the announcement preemptively on Wednesday night during an appearance on CNN.

The United Kingdom is “our eleventh largest trading partner. They account for three, count them 1-2-3, percent of American trade,” he explained, noting that the agreement kept 97% of U.S. trade “up in the air.”

Wolfers also noted that the average tariff levied by the U.K. on goods is one percent, meaning that in the best-case scenario Trump had shifted the tariff from one percent to zero.

On social media Wolfers concluded, “The US is a high tariff country for the foreseeable future, and the trade war continues.”

“About two percent of our imports come from Great Britain. So put me down as kind of skeptical that there is much there there,” Oregon Sen. Ron Wyden said in a CNN appearance on Thursday responding to the announcement. Wyden went on to note that farmers and small businesses in his home state are “hurting” because of Trump’s trade actions.

The agreement also included a carve out for luxury car brands like Rolls Royce and Jaguar, which stood in stark contrast to Trump’s recent demands that American children be deprived of dolls due to his tariffs.

The U.S. conducts just under $150 billion in trade with the U.K. By contrast, the U.S. Trade Representative notes that trade between the U.S. and the European Union is worth $975 billion while trade with China is at $580 billion. Those entities have not bent to Trump despite the tariffs he has imposed on them, which are being passed on to U.S. consumers.

In fact, the European Commission said on Thursday it plans to file an international trade dispute with America at the World Trade Organization, characterizing the Trump tariffs as actions that “blatantly violate fundamental WTO rules.” The commission also said it was considering $107 billion in tariffs on American goods—which would hurt efforts by American companies to sell products overseas.

Consumers are still dealing with increased costs for many goods, including flowers, board games, and toys among other consumer staples. Trump’s announcement with the U.K. was meant to create a splash in the news about a policy that most Americans detest, while the tariffs —and corruption affiliated with tariffs—continues unchecked.

Reprinted with permission from Daily Kos.

Donald Trump

How Trump May Use Trade Chaos For Illegal Gain

You can get rich when stocks go up. You can get rich when stocks go down. When stocks go up, people who knew to buy them in advance may win big. If they go down, investors who had the wisdom to "go short" on them — that is, bet on their decline — can make a bundle.

Clearly, anyone who can predict what stock prices would do can make magnificent profits. And who knew that Donald Trump was about to announce market-moving plans for bigger tariffs, then smaller tariffs, then sideways tariffs, then tariff delays?

Trump knew.

It happens that trading stocks or other investments based on insider information, whether by a corporate executive or government official, is highly illegal. Trump and any confidants who got wind of what he was about to say on tariffs could have made fortunes buying or selling on that information.

Were Trump and friends engaging in such fraud? So far no one has presented direct evidence that Trump's whiplash statements and contradictory actions on tariffs are part of a ploy to manipulate stock prices. But I did ask a conservative banker friend whether he thought insiders were trading on all this tariff chaos. His answer: "I have absolutely no doubt about it."

A number of factors strongly hint that this could be going on.

Hint number one is that if one believes Trump's vows to move forward on tariffs, none of this makes sense. Nearly every economist holds that reckless tariffs will crash the economy. As a negotiating tactic, what have these gyrations produced? Pathetically little.

Example: Trump slapped 25 percent tariffs on Canada and Mexico at midnight, March 4. Stock prices tumbled. Hours later, his Commerce Secretary Howard Lutnick said Trump might reconsider. Trump then announces a one-month delay on some tariffs. Stocks jumped.

U.S. automakers rely on parts from Mexico and Canada to make their vehicles less expensive and easier to sell. Trump "explained" that the American companies could use the month to move that production back to the United States.

Let's cut to the chase: Vehicle makers couldn't build new parts factories in just a month even if they wanted to. But gosh, what a good time insiders could have trading on their pain.

Hint number two is that Trump is firing ethics watchdogs that would call attention to illegal stock manipulation. The Department of Justice, for one, is supposed to prosecute government officials for insider trading. Trump just gave the No. 2 position at DOJ to Todd Blanche, who was his personal criminal defense lawyer.

Trump did a mass firing of inspectors general, some of whom investigate insider trading by government officials. He didn't even give Congress the 30-days' notice required by law.

Hint number three is that Trump simply loves a good scam. It matters not whether the victims are students at his university, investors in his bankrupt casinos or his fans.

Some may recall how the Trump Rebate Banking System suckered sad members of his cult. TRB sold such items as "Trump Bucks," "Trump coins" and membership cards on the false claim they would become legal tender in a future monetary system.

As things now stand, a big chunk of North American trade remains exposed to tariffs. That means Trump has much opportunity to play more tariff games with friendly countries, U.S. workers, manufacturers and ordinary investors.

The time has long passed for Americans to dismiss the idea that Trump's yo-yo "trade policy" is a simple matter of indecision. They should ask whether it involves, or even revolves around, an insider trading scheme benefiting Trump and his consorts. Does anyone have a better explanation for it?

Reprinted with permission from Creators.

Shop our Store

Headlines

Editor's Blog

Corona Virus

Trending

World