Tag: economic nationalism

TBT: Cass on Our Diminished Income

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The other day my students and I were talking about the Model T Ford, which in the 1920s ran around $6000 in today’s money for a new car.  It is impossible to find a brand-new vehicle of any make for $6000 today.  Granted, a Ford Focus, for example, is packed with way more technology and safety features than a Model T from 100 years ago, and that technological advancement gets factored into the price.

But consider that in the 1990s, when Kia hit the American market, they advertised a new sedan for around $6999 (in 1990s’ dollars).  What would that be twenty-five years late—maybe $9000 or $10,000?  That price point, too, is virtually impossible.

I managed to purchase my current vehicle—a 2017 Nissan Versa Note SV—for right around $9100.  It has around 45,000 miles on it when I bought it, and had been a rental vehicle before I purchased it.  I got a steal on that car—the closest comparable I’ve found since then was a list price of around $8900 (the list for my car was $8000 even).  That’s for a four-year old subcompact hatchback.

I got lucky when I found that car.  I figured it would be easy enough to find a decent car for under $10,000 when I began vehicle shopping in late 2019.  Boy, was I wrong.  Vehicles last longer than ever before, and maintain their value a very long time.  They’re also, as mentioned, packed full of technology and safety features that weren’t present even twenty years ago.  Trucks in particular hold their value extremely well; to find a truck in my price range, I’d have had to purchase a Ford F-150 from 1994 with half-a-million miles on it.

It’s great that cars last longer and are safer.  But those features—many of which drivers will never need or use—drive up the costs substantially.  Such was the point of an illuminating Twitter thread by Oren Cass, which demonstrates that, despite earning more money, Americans’ expenses for basic goods are substantially higher, requiring a whopping fifty-three weeks of pay to cover now versus a mere thirty weeks in 1985.  Naturally, given that there are only fifty-two weeks in a year, that presents a problem.

I don’t know the solution, but as I wrote a year ago, “Something’s gotta give.”

Indeed.  Here is 28 April 2020’s “Cass on Our Diminished Income“:

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Romney Gets One Right

The Portly Politico13 Comments

Okay, okay—before you start pelting me with the citrus fruit of your choice, let me make it clear:  I have no love for Mitt Romney.  I think he’s a traitorous, chimerical liar whose positions bend and twist with the ever-changing fashions of the Left.  He strikes me as a coward and opportunist, who will gladly slit his own party’s throat for a farthing of accolades from Democrats and the progressive press.

All that said, I’m intellectually honest enough to give credit where it is due, and even a stopped Mormon is right twice a day.  Mitt Romney has proposed a bill (forgive me for linking to the Never Trumpers at The Dispatch) that he argues is intended to alleviate childhood poverty, but is really a pro-natalist plan:  direct payments of $350 for children five and under, and $250 a month for children six through seventeen, with a maximum annual benefit of $15,000 annually, and payments beginning four months before a child’s birth.

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Trump’s One-Two Punch

The Portly Politico4 Comments

Trump won in 2016 running on a strong “America First” platform.  A major component of America First-ism is prioritizing the interests and the well-being of American citizens first—before the interests and well-being of foreign-born workers and immigrants, legal or otherwise.  The appeal and the concept aren’t difficult to understand:  a government should, chiefly, operate in the interest of its citizens before anyone else.  We can discuss the best immigration policies as a nation, but those policies should always place American citizens at the forefront.

It’s such a simple and pure political philosophy, it’s a wonder it comes under such fire.  But such is the world of globalists—who want cheap labor and sacrificial offerings to Efficiency—and progressives—who think anyone who is white and cares about having a job is a racist.  Take out the mercenaries (the former group) and the insane (the latter group) and you have reasonable people, those folks that might quibble around the edges of America First doctrine, but can’t disagree with its fundamental premises.

Trump has been better than most of his predecessors on immigration, though his waffling and equivocating—likely the product of Jared Kushner’s influence—have soured his some of his earliest supporters.  His turn on Jeff Sessions and the former Attorney General’s ultimate defeat in the Alabama Republican primary this summer seemed to many Trumpists to be a betrayal of immigration patriotism.  Sessions was, indeed, the leading voice in the United States government, pre-Trump, in denouncing open borders and unlimited immigration.  With Sessions leaving the national scene, immigration patriots and restrictionists have reason to worry.

That said, it bears remembering that Trump won the presidency campaigning on building a wall, prioritizing Americans over foreign workers, and keeping American industries at home.  No one in meaningful national politics (other than Jeff Sessions and Pat Buchanan) was beating that drum prior to Trump.  Trump tapped into a deep well of resentment over the Obama administration’s decade of putting middle-class Americans last, and several decades of neglect and open scorn from national politicians.

I also don’t expect Trump to reverse the postwar consensus overnight, or to get the whole loaf all at once.  I think Trump’s basic instincts are to put Americans first, while weighing the complexities of various interest groups and economic factors.

But Trump is at his best when he cuts the Gordian Knot and drives to the heart of the issues.  If Americans are losing jobs to foreign visa holders, well, make those visas less valuable.  He’s done that with an executive order barring H1B visa holders from working in federal government jobs, and barring the government from using contractors who use H1B visa holders.

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Lazy Sunday LXIV: Grab Bag

The Portly Politico8 Comments

After taking last weekend off due to severe migraines, I’m finally getting back to normal.  My fever seems to be getting lower each day, so I’m praying it’s finally running its course.  I’ve also been trying to improve my diet, with less salt and more fruits and veggies in the mix.  That’s helped with my blood pressure a bit, though I still need to get that down.  Finally, I’m seeing a neurologist Tuesday afternoon just to make sure these migraines are merely related to my fever, so I appreciate your prayers.

For this weekend, I figured I’d just grab some different posts and throw ’em up.  These are some of my classics, posts that I think were pivotal in the history of The Portly Politico:

Here’s hoping my personal health and our nation’s health both improved markedly over the next few days.  Thanks for your patience this past week with the lackluster and brief posts.

Happy Sunday!

—TPP

Other Lazy Sunday Installments:

Cass on Our Diminished Income

The Portly Politico2 Comments

Way back in The Before Times, in the Long, Long Ago, before The Age of The Virus, Oren Cass presented a series of sixteen tweets, asking this question:  “How is that our economic statistics suggest workers have been making slow but steady progress in recent decades, while popular perception is that their family finances are coming under increasingly untenable pressure?”

Cass also wrote about the issue in greater detail in American Affairs and in a lengthy paper for the Manhattan Institute.  That question—why does it feel like it’s harder to make ends meet now, even though inflation is low and we’re wealthier?—is one of the gnawing concerns of modern-day America.

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TBT: End the Income Tax

The Portly Politico12 Comments

Last week I went through the annual ritual of paying my income taxes.  For the second year in a row, it’s been a painful experience.  I’m finally at the point in my life where I end up owing money to the federal government, which has only made me more conservative, if that was possible.

Part of the problem is that I slam so much money into my retirement (the legal annual maximum each year into my HSA, my 403(b), and my traditional IRA) that even with increases to my federal withholding, I still fall short.  It’s because a good chunk of my income in 2019 came from private music lessons, gig guarantees, tips, and merch sales at gigs.  I brought in around $9099 from those combined (with the lion’s share of that revenue coming from private music lessons).  My brother tells me I’m probably going to have to start filing quarterly, although The Virus has pretty much killed that side business for the time being.

My taxes took hours to complete, too, as I painstakingly recreated all the mileage I drove for lessons and gigs (now chastened, I am going to maintain a mileage log in my vehicle).  Combined, I drove around 6011.4 miles last year just for lessons and gigs.  WHOA!

Of course, the IRS is now privy to all of that information.  I keep a very detailed budget, and carefully track every transaction, cash or otherwise.  And, naturally, no good deed goes unpunished.

Wouldn’t a national sales tax be easier, and less invasive?  Or maybe a restoration of the old-school tariff regimes of the nineteenth century?  Sure, the congressional battles over tariffs nearly brought South Carolina’s secession in 1832-33, but I’d rather importers pay more (yes, yes—I know the costs will passed on to me, the consumer) than have to divulge my every move to the feds.  Plus, I’d gladly pay another couple of hundred bucks for my washing machine if it means an American worker gets a job and can have some pride in working.

Anyway, the tax man has gotten his share, and I’ve received a decent refund from the great State of South Carolina, so that eases the pain.  Of course, I’m still patiently awaiting my inflationary TrumpBux.  I suppose beggars can’t be choosy about their government’s preferred form of institutional shakedown.

With that, here is 15 April 2019’s “End the Income Tax“:

Today is tax day.  Despite President Trump’s signature tax reform, I ended up owing money to the feds for the first time in my adult life (although I’ll be getting a bit back from the State of South Carolina).

The income tax used to be unconstitutional in our Republic.  Indeed, the primary way that federal government gained revenue was from tariffs on imported goods and excise taxes on certain products, like whiskey.  Alexander Hamilton advocated for high protective tariffs to protect young domestic industries from British manufacturers, who were “dumping” cheap British goods into the infant nation (a practice China has taken up today).  Only during times of war, such as the American Civil War, did Americans have to endure a tax on incomes.

Like most odious, liberty-killing measures, the income tax was a Progressive Era project, ratified in the 16th Amendment (followed shortly thereafter by the 17th Amendment, which made US Senators directed elected, and the 18th Amendment, which prohibited the manufacture, sale, and distribution of alcohol).  Progressive reformers assured Americans that only a very small proportion of Americans would ever pay the income tax, which was graduated from the beginning.

That claim was true… for the first year.  Immediately, Congress began ratcheting up tax rates and requiring more Americans to pay it.  Governments are hard-pressed not to exploit a newfangled method of raising revenue.

The income tax is not all bad:  it’s a more stable source of revenue that tariffs, which depend upon foreign imports.  No imports, no taxation.  Advocates for the graduated income tax, like Tennessee Congressman and future Secretary of State Cordell Hull, argued that, in the event of a major war in Europe (which broke out a year after the 16th Amendment was ratified), international trade would fall, bringing collected duties down with it.  That was a prescient observation, and a strong argument in favor of some kind of domestic tax.

That said, the income tax is incredibly invasive.  Every year, I lament that the federal government has to collect so much information about me:  where I worked during the fiscal year, how I saved my money, etc.

According to Scott Rasmussen, 52% of Americans favor repealing the 16th Amendment.  Count me among them.  The income tax gives the government far too much influence over our lives, and the federal tax code is so byzantine and full of carve-outs and exemptions, it’s become the purview of the well-connected.  It’s become a corporatist monstrosity.

What would replace the income tax?  Given that it’s likely never to be repealed—governments don’t typically diminish their power (or access to other people’s money)—the question is largely academic.  Still, it’s worth considering.

While I think tariffs can serve a useful purpose (see also: bringing China to heel), and that there’s an argument for some mild protectionism, high protective tariffs like Republicans championed after the Civil War would be ruinous to trade.  The deadweight loss (destroyed economic activity) associated with tariffs—especially from the inevitable retaliatory tariffs other nations would pass in response—would do more harm than good, and could result in a Smoot-Hawley Tariff of 1930 situation (i.e., the Great Depression).

The only realistic alternative that I see currently (from my admittedly myopic position) is a national sales tax.  There are some serious drawbacks to this approach, to be sure, but it would be the cleanest, most efficient way to generate revenue.

A national sales tax would encourage saving and work, both of which are currently disincentivized under our current tax regime.  Instead, purchases would be disincentivized, which would hurt sales, but encourage people to hold onto more of their money.  Further, it would not require the government to keep elaborate tabs on every worker; the Internal Revenue Service could be greatly reduced, or even eliminated.

Of course, any tax is a necessary evil, and a national sales tax would make it more difficult for high sales tax States to raise revenue (as it would limit those States’ ability to increase their taxes if necessary).  It would also slow purchasing, and necessarily raise prices (by definition, especially if you’re tacking 15-25% on top of a good).  There’s also the question of whether a sales tax should just apply to consumer goods, or if it should be an uber-expensive value-added tax, with each economic transaction along the chain of production getting taxed.

Those are sticky questions for wonkier types than I to sort out.  But wouldn’t it be nice to build an economy on the production of real value—of stuff—rather than one built on ever-expanding sales, purchasing on credit, and debt financing?

Regardless, the federal income tax is a major imposition, an invasive intruder that enters our lives every April, borrowing from us (without interest!) throughout the year, and intimidating us with the looming threat of disruptive audits.  It seems everyone would be happier—even, in a way, the feds!—if it were eliminated.

TBT: Trade War with China is Worth It

The Portly Politico6 Comments

Amid this whole coronavirus situation—conundrum, crisis, globalist meltdown—we should keep in mind that it’s all China’s fault.  That’s why GEOTUS keeps calling it the “Chinese Virus” and the “Wuhan Flu,” because those names are completely accurate.  Of course, the media is having conniption fits about the supposedly “racist” intentions and implications of those names (which are quite mild compared to my favorite, “Kung Flu”).  It’s why the only real response to charges of racism—which are designed to make conservatives apologize in panicked fear—is to ignore them.

Regardless, it’s worth remembering that China is to blame.  Whether it was the result of abhorrent, unhygienic culinary practices (the infamous “bat soup“) or a malicious (or incompetent) leak of an engineered biological weapon, China unleashed this plague upon the world.  Perhaps the strongest argument against uncritical globalization is just that:  we made ourselves excessively dependent upon a regime that is fundamentally opposed to our very existence, and which rejects our deepest held values and beliefs.

In retrospect, then, President Trump’s trade war with China looks all the more prescient.  We’ve become so dependent upon and integrated with China, we’re running short on the ingredients for essential medicines because of China’s disease.  Supply chains have been seriously disrupted, and will continue to be, it seems, for some weeks.  Thank goodness the tariffs began moving production of some goods back to the United States.

That’s an important lesson to remember:  paying a bit more for your washing machine is worth the price of having domestic production.  We don’t need to make everything in the United States, but saving a hundred bucks or so on a major appliance isn’t worth gutting our industrial capacity and leaving our middle and working classes out of work.

Oh, well.  A lesson learned too late is still a lesson learned.  When this whole fiasco is over, let’s consider a healthy dose of autarky going forward.

With that, here is August 2019’s “Trade War with China is Worth It“:

There’s a lot of disingenuous scuttlebutt flying around about a looming recession, the inverted yield curve, and the costs of the trade war with China.  I can’t help but think such doom and gloom reporting is part of an effort to undermine President Trump.  Investor and consumer confidence are emotional, fickle things, based as much on feeling as they are on hard economic data.

As such, I suspect that major media outlets are attempting a bank-shot:  scare investors and consumers enough, and they panic into a recession.  President Trump’s greatest strength at present is the booming economy and low unemployment rate; take that away, and loopy, socialist Democrats have a much better shot in the 2020 elections.  With Leftists like Bill Maher actually hoping for a recession to unseat President Trump, that’s not a far-fetched speculation at all.

The inverted yield curve is a bit academic, though, and I don’t think it’s going to have the scary impact its prophets of doom hope.  Oh, a curve on a graph is inverted—scary!  Most Americans aren’t going to respond to that in any substantial way.

On the other hand, the negative media attention around the trade war with China could negatively impact perceptions of the president.  Trade wars, in which countries throw up tariff barriers against one another’s imports, often ratcheting up the duty levels, is a game in which both sides lose out over the long-run—that is, assuming they don’t have other viable trading partners, and that they’re both evenly matched economically.

And, yes, the trade war has had some drag on the American economy—but it’s been so minuscule, only a few sectors have really felt the pain.  Meanwhile, China is really struggling.  Getting Trump out of office would serve China beautifully, as narrow-minded neoliberal economists would likely push a Biden (or Harris—gulp!) administration to end the tariffs.  China has the dubious luxury of an authoritarian system that can direct its economy, while President Trump must survive reelection to keep his trade policy going.

The case for maintaining the trade war is compelling (and it pre-dates Trump:  one of Mitt Romney’s advisers in the 2012 election, Oren Cass, wrote an essay for National Review calling for a trade war with China in 2014).  The best recent summary for why the trade war is beneficial actually comes from my hometown paper, The Aiken Standard (kudos to my Dad for sharing this piece).

Greg Roberts spells out the case in “Facts behind the U.S.-China trade war“; I highly recommend you give it a read.  As Roberts points out, in a normal trading relationship, the price of each trading nations’ currencies would fluctuate based on its relative trade imbalance with its trading partners; this fluctuation would occur until some rough equilibrium in currency values is reached.

China—in violation of its agreement not to do so upon entering the World Trade Organization—has continually depressed the value of its own currency in order to encourage a trade imbalance with the United States.  Because the Chinese currency is held artificially low, it is cheaper for the United States to import Chinese goods than to export American goods to China.  Why?  Because the Chinese currency is cheaper, Chinese goods are less expensive, and can be bought and imported cheaply.

Because China is a currency manipulator, it is not acting per its agreement upon joining the WTO.  Further, Roberts points out other violations, including China’s requirement that firms wishing to manufacture in China turn over their patents, blueprints, and other intellectual property to the Chinese government as the cost of doing business.

Here are two relevant paragraphs:

Has China kept its promise? The answer is a resounding no, since the Peoples Bank in China, which is controlled by the Communist Party, routinely devalues its currency to maintain, in the case of the U.S., a positive trade balance, which, for us, means we have a trade deficit with China, now totaling more than $300 billion annually.

China agreed to many other provisions when it joined the WTO which the country has not kept, to wit not requiring the transfer of foreign technology as a condition of market access; enterprises in China that are owned or controlled by the government have expanded rather than diminished; foreign banks have not been given the access that had been agreed to; the theft of intellectual property has not abated; among many others.

Clearly, China has acted in bad faith repeatedly.  Further, the United States has a number of alternatives for trade in the region, including Vietnam.

Also, the goods China receives from the United States are the stuff of life—soybeans and other agricultural products.  Does the United States need more cheap plastic crap?

Give Roberts’s analysis a read.  It’s the best, most succinct summary of the trade war I’ve read recently, and it will convince you of the necessity of holding the line against Chinese economic aggression.

Post-Trump America

The Portly Politico7 Comments

Well, the craziness of yesterday has subsided, and I’m almost finished with report cards.  Student-musicians apparently did quite well at their Music Festival, and life is (hopefully) about to calm down a bit before getting insane all over again in about five or six weeks.

All that said, I’m still pretty worn-out today.  Fortunately, my good blogger buddy photog, proprietor of Orion’s Cold Fire, wrote a post yesterday, “Building on Trump’s Revolt,” which raises some interesting questions.  Foremost at the back of every Trumpist’s mind:  who takes over after Trump?

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TBT: The Human Toll of Globalization

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One of the more interesting developments in conservatism since Trump’s rise in 2015-2016 has been a reevaluation of our basic economic policy.  Much of the ideas debated originated, in our modern political era, with Pat Buchanan.  For decades, the assumption among conservatism was that economic efficiency was the highest good, as it lowered costs and eliminated or reduced government overreach.

That was a reasonable set of assumptions when our nation shared a common culture, and when the United States dominated global markets hegemonically.  But the goal of reducing the size of government morphed pathologically into the mad worship of Efficiency above all else.  We sold out social capital—stable families, cohesive communities, robust civil society—for quick cash.

That’s the gist of Z-Man’s post today, “Middle-Man Conservatism.”  Tucker Carlson has similarly touched upon the woeful consequences of worshiping Efficiency-for-its-own-sake.  Sure, Americans possess a pioneering spirit—we’ll move to the oil fields in North Dakota if we have to do so—but we’re still motivated by the same things other humans are:  family, community, belonging.  Gutting our communities to save fifty bucks on a washing machine is a ludicrous trade-off.

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