Will Tariffs Cause a Recession?

Maybe, maybe not. We don’t know. Oddly, we did have a recession under Sniffy Joe which wasn’t caused by tariffs and yet no one wants to talk about that one. It wasn’t a “real” recession, we’re told.

What? Recessions have always and everywhere been defined as two consecutive quarters of negative GDP which is exactly what happened under Sniffy.  Yet, no recession was declared.

So now The Powers That Be (TBTB) are using anything and everything to discredit Trump and the MAGA economic movement. Trump is literally an existential threat to these people. There are trillions of dollars at stake that they’ll lose if Trump is successful.  So if TBTB can convince you to question Trump’s economic priorities, they just might get enough of the squishy Republicans to back off and continue the status quo by not supporting Trump’s agenda.

That would be bad for the Republican party, of course, but even worse for the USofA.

Example 1.  The UK.  Look at the UK today. It’s falling apart in front of our very eyes.  They went the path of “free trade” in the late 1800s when they were the only game in town relative to manufacturing with cheap colonial labor providing raw materials few, if any other nations, could get.  Thus they wanted their goods exported with NO tariffs as that meant the largest profits for them.

Now look at them. On a per capita basis the UK is poorer than the good people of Mississippi.  Is this all because of free trade? Of course not. But if free trade in of itself were so successful over multiple generations then why is the UK such a clown show now?

Ironically, in the 1890s and 1920s the US put MASSIVE tariffs on imported products and thus allowed our manufacturing industries to blossom so much that soon we became the economic powerhouse of the world, so much so that without the US in WW2 who knows what may have happened?

After WW2, when the US was the only game in town of course we wanted free trade too because we wanted our products to get shipped overseas as cheaply as possible.  Japan and South Korea slowly began to compete with us. Nixon goes to China in 1974 and Carter and Reagan solidified us as being for free trade always and everywhere, Clinton and Bush followed suit and here we are today.:

Median Wages, adjusted for inflation from 1979, have gone up by all of .28% a year.   Oh but it gets even better. Check this out:

As you can easily see the REAL Median income for the age groups 35-54 has hardly gone up at all since 1989.  Yet look at the REAL price of housing… (Real just means net of inflation by the way.)

And that is just as of 2022, the Survey for Consumer Finances hasn’t come in yet for 2024 and one can only assume it’s going to be worse.

But I thought Free Trade and Immigration were supposed to make things cheaper for the country who imports.  Yeah, certainly hasn’t happened for things we need the most, housing, transportation, health care. Food is definitely cheaper relative to one’s labor.  No two ways about that. Want to know why? Because we import so much of it.  The United States imports more beef than we export.  Weird isn’t it? Do we really need to import beef given our own sizable cattle industry in the U.S.?  Well, we’re told, if we want cheaper beef we do.

But is that true? In the past, did tariffs on imported products make ALL of those products more expensive or did the tariffs just make the IMPORTED products more expensive? Did DOMESTIC produced products also jump in price? See how the TBTB get you here? They’ll say tariffs increase prices. But it’s up to you to ask for evidence. Prices on what, exactly? Where is the evidence of that in the past?

The first US Congress had MASSIVE tariffs imposed on imports. I did a video that showed the price of boots, even years after the tariffs were imposed went down like crazy, as well as many other products.  We see this time and again, tariffs may bump up prices a bit in the short term but that doesn’t mean the increase in prices will stick.

The open borders, free trade people always only give you one side of the argument.  They’ve, in fact, made it verboten to be an economist and discount the benefits of free trade. Economics is even worse than physicists who question the validity of Einstein.  “You’ll never work in this town again, Scandlen!” is what you’ll hear if you question the orthodox.

The point ultimately is can America sustain itself as the preeminent economy in the world by importing cheap labor and exporting our manufacturing base? I don’t believe we can.  Oh, don’t get me wrong, we still manufacture a lot. We still export lots of Petro products, lots of weapons too and believe it or not, electric/telecom equipment among other things.

But shouldn’t we acknowledge Ross Perot was right when he warned us about the “giant sucking sound to the South” and stop the bleeding? Just look at how President Bush laughed when Perot said this in that video. Well, tax-raising guy, Ross was right, you were wrong…at least when it comes to America’s future it’s about time we say “read OUR lips!”

Blessings,

Josh