Trump’s Tariffs Set to Destroy More Jobs than The Tax Cut Will Create.

Trump's trade war will claw back 25% of the growth in GDP, slightly more than 20% of the wage growth and more than wipe out all the jobs his tax cuts would provide.

President Trump’s tax cuts will provide the following benefits according to an analysis by the Tax Foundation.

According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly lower marginal tax rates and the cost of capital, which would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, and an additional 339,000 full-time equivalent jobs.

However, the Tax Foundation has also estimated the effect of all the tariffs Trump has implemented and his most recent threat to impose more tariffs on Chinese goods and services.

The Trump administration has imposed and threatened several rounds of tariffs in 2018, and other countries have responded to these measures in kind. Using the Tax Foundation Taxes and Growth Model, we analyze the effects of enacted, threatened, and retaliatory tariffs on the United States economy. Tariffs damage economic well-being, and lead to a net loss in production and jobs, and lower levels of income.

According to the Tax Foundation model, the tariffs enacted so far by the Trump administration would reduce long-run GDP by 0.06 percent ($15.7 billion) and wages by 0.04 percent and eliminate 48,585 full-time equivalent jobs. If the Trump administration enacts additional tariffs on automobiles and parts and additional Chinese tariffs, GDP would fall by an additional 0.36 percent ($89.6 billion), resulting in 0.26 percent lower wages and 277,825 fewer full-time equivalent jobs.

Other countries have also announced intentions to enact tariffs on U.S. exports. If these tariffs are fully enacted, we estimate that U.S. GDP would fall another 0.05 percent ($12 billion) and cost an additional 38,376 full-time equivalent jobs.

If all tariffs announced thus far were fully enacted, U.S. GDP would fall by 0.47 percent ($117.6 billion) in the long run, effectively offsetting one-quarter of the long-run impact of the Tax Cuts and Jobs Act. Wages would fall by 0.33 percent and employment would fall by 364,786.

So, looking at the rather likely scenario, IMO, that we implement all the recent tariffs Trump has threatened and retain the ones already in place and ignore any possible retaliation to future tariffs (note this is a rather strong assumption and can be seen as a best scenario) Trump’s trade war will claw back 25% of the growth in GDP, slightly more than 20% of the wage growth and more than wipe out all the jobs his tax cuts would provide. Note this is using the same model in both cases.

Too see the potential here in more concrete terms, Ford has lowered its earnings expectations.

Ford Motor Co. said on Thursday it expects lower earnings per share in the first quarter and lower pretax profit in 2017 due to higher spending on commodities, warranties and investments, and a drop in sales volumes especially fleet sales.

More here.

Ford Motor Co (F.N) on Wednesday lowered its full-year earnings forecast due to slumping sales and trade tariffs in China and its struggling business in Europe, and said ongoing plans to revamp its business could lead to pre-tax charges of up to $11 billion over the next three to five years.

Tariffs, particularly those imposed on U.S. aluminum and steel imports by President Donald Trump’s administration, should cost Ford $1.6 billion in North America in 2018, Shanks said.

The automaker’s struggles to boost sales in China have showed no sign of ending despite its taking steps to bring new products to market. Through the first five months of 2018, Ford’s Chinese sales were down 22 percent.

GM also is lowering its earning expectations as well and is citing similar reasons as Ford.

General Motors (GM) on Wednesday downgraded its expected earnings for 2018 because of costs associated with the Trump administration’s steel and aluminum tariffs.

Reuters reported that the company expected to face a $1 billion impact on its full-year results, an increase from the $500 million it had previously projected. Most of its additional costs were incurred in America, Chief Financial Officer Chuck Stevens told reporters.

However, he added that the GOP tax-reform legislation passed late last year and low unemployment should help mitigate some losses from the tariffs in 2018.

“What happens beyond 2018, there’s a lot of uncertainty in this space at this point in time,” Stevens said.

The Trump administration implemented steep tariffs on aluminum and steel imports earlier this year. The move prompted a number of other countries to impose retaliatory tariffs.

U.S. steel producers have raised their prices to keep up with the new tariffs, leading to higher costs for GM, Reuters reported.

Fiat-Chrysler has lowered its earning expectations.

In FCA’s case, Chinese demand slumped in the quarter ahead of a July cut in import duties, resulting in higher incentive spending and an increase in unsold vehicle stocks that “particularly affected Maserati,” new Chief Executive Mike Manley told analysts on a conference call.

Manley said “very, very cost conscious” Chinese consumers sat on the sidelines during the second quarter waiting for prices to come down.

FCA shares plunged more than 15 percent.

The automakers’ results were overshadowed by news former CEO Sergio Marchionne had died after suffering complications from surgery.

FCA said that it has fixed-price contracts for most raw steel through 2018, but would see increases in 2019 if current prices hold.

Additionally and ironically, Whirlpool has trimmed its earning forecast as well due to steel and aluminum tariffs. This is ironic since Whirlpool initially clamored for tariffs on washing machines and parts and got them. Then Trump ruined the party by imposing additional tariffs on steel and aluminum driving up Whirlpool’s costs and eating into earnings. Whoops. From the article,

Home appliance manufacturer Whirlpool Corp (WHR.N), an early supporter of tariffs to protect U.S. washing machines, said on Tuesday that U.S. tariffs on steel and aluminum were raising sharply the costs of raw materials, contributing to a slump in second-quarter earnings, and shares fell 15 percent to a two-year low.

On Monday, Whirlpool reported second-quarter profit after market close that fell short of Wall Street estimates. The company posted a net earnings loss of $657 million, or $9.50 cents per diluted share, in the quarter that ended in June, compared with $189 million, or $2.52 per share, a year earlier.

The Trump administration slapped tariffs on imported washing machines earlier this year, which was expected to give Whirlpool a boost.

Bitzer praised the tariffs on washing machines in January but struck a more cautious tone in April, saying the company’s raw materials costs in its U.S. laundry business had risen substantially primarily due to a separate set of tariffs on steel and aluminum.

On Tuesday he said that “uncertainty related to tariffs and global trade actions have also led to increased cost of certain strategic components and finished goods import and export.”

And of course the dismal soybean and other agricultural goods markets were early casualties in Trump’s trade war.

American Soybean Association CEO Ryan Findlay said Thursday that China’s retaliatory tariffs of 25 percent on U.S. beans have dealt farmers a major blow because it’s led to low prices that essentially don’t support paying bills.

“Farmers see that pain right now,” Findlay said in an interview on CNBC’s “Power Lunch.” “You have to have the prices to pay the bills — and the prices aren’t there right now.”

U.S. soybean futures have fallen nearly 20 percent since China announced on April 4 plans to slap a 25 percent tariff on 106 U.S. products, including soybeans. At the same time, Brazilian soybeans are fetching a significant premium over the Chicago prices due to increased demand from Chinese buyers.

“If somebody were to lose 20 percent of their income, that hurts,” Findlay said. “I don’t care what segment of industry you’re in, that hurts — and farmers are feeling that right now. And they’re starting to feel that emotional impact.”

Findlay said another ripple effect is farmers holding off buying farm equipment because “they won’t have the funds to make that purchase.”

And of course this has led Trump to propose a $12 billion bailout of the agriculture sector.

“This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches,” Sasse said in a statement. “America’s farmers don’t want to be paid to lose – they want to win by feeding the world. This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

Winning…so much winning.

Trump’s policies in regards to trade are hurting Americans. Even if you are not in one of the affected industries you’ll likely face higher prices. And all of this is literally for nothing. Trade deficits are hard to classify as Bad™. Trade is mutually beneficial, at least ex ante, and this is true if you are trading in the same city, same state, same country or even between countries. The two parties to the transaction are free not to make the trade if they think it will be bad for them. Granted, trade between countries allows for greater specialization and even innovation and those two things can destroy jobs, but that is part of the market process. The new destroys the old. As farmers obtained tractors and other equipment of increasing sophistication and productivity each farmer became more productive. Where in the past 1 farmer could farm say 20 or 30 acres with his team of horses, tractors and latter combines now 1 farmer can farm 500 or 1,000 acres. And naturally jobs in the agriculture sector have been destroyed on a large scale. In 1900 approximately 40% of the work force worked on farms. Today that number is down to 2%. Why this job destruction is seen as tolerable or even desirable when it is done within a country, but suddenly bad when it crosses international borders makes zero sense.

Further, merely raising tariffs, even if our trading partners do not, hurts Americans. There is a difference between who is legally required to pay the tax and who actually does pay the tax. Consider the sales tax. If there is a sales tax and you are buying something that is $10 what does the businessman selling you the good do? He multiplies the price by 1.1 and charges you $11. He keeps the $10 and sends the extra $1 to whatever agency is collecting the sales tax. And the businessman also pays part of the tax. Since his prices are now effectively higher he will lose some sales so his revenues and earnings will go down too as a result of the tax. This “sharing of the tax” irrespective of who writes the check to the government is known as tax incidence or tax burden.

The bottom line is simple. Trump’s trade policies are anti-growth and nationalistic and are based on a faulty idea that trade deficits are inherently bad. His solution to bailout the agriculture sector is emblematic of socialism.

FILED UNDER: Donald Trump, Economics and Business, International Trade, Taxes, US Politics
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Ben Wolf says:

    His solution to bailout the agriculture sector is emblematic of socialism.

    Wrong as usual.

    Also, from the Tax Foundation’s description of the model they apply to the tax cuts, it doesn’t apper to contain a foreign sector, meaning it assumes the profit flows from large predicted foreign investment magically continue to circulate in the United States.

    3
  2. Kathy says:

    His solution to bailout the agriculture sector is emblematic of socialism.

    The GOP sayeth “Socialism Bad. National Socialism Doubleplusgood!!1!”

    4
  3. Ben Wolf says:

    @Kathy: Oh, Kathy. You do demonstrate the point.

  4. I would say his solution to bailout is just pure ignorance. He is s child who makes a mistake but has a trust fund he can use to fix the mistake without immediate consequences to himself. Never mind that that mistake cost a lot of people a lot of money and never mind that the trust fund is someone else’s money.

    7
  5. Michael Reynolds says:

    @Steven L. Taylor:
    It’s such a revelation of ignorance. Does he not understand that these farmers have lucrative foreign markets which will now be taken over by Brazil and other soy bean producers? How is an Iowan farmer supposed to recapture that market? This isn’t a one-year subsidy, these farmers are being forced either into permanent dependency or bankruptcy.

    6
  6. @Michael Reynolds: His entire approach to economic and foreign policy is steeped is so much ignorance that it is truly astounding.

    I was worried about three basic things when he was elected: that he was an aspiring authoritarian, that he would govern as a white nationalist, and that he would truly threaten the prevailing international political economy (i.e., destabilize the post-WWII peace that was deepened by the end of the Cold War).

    He has proved lazy and inept at the first concern (not that he doesn’t make in-roads), he is certainly bringing white nationalism into the mainstream, but the damage he is doing to the current international system has the potential to be deep, profound, and long-lasting.

    9
  7. Kathy says:

    @Steven L. Taylor:

    The two big problems stemming from this are:

    1) His supporters think Mangolini knows all about economics and that he knows what he’s doing.

    2) His enablers know he’s a dangerous ignoramus, but they’re too afraid to offer even mild criticism.

    2
  8. Hal_10000 says:

    @Steven L. Taylor:

    I wasn’t concerned enough about the damage he would do the world order. He’s both astonishingly ignorant and amazingly unmoved by what that order has done for people all over the globe. All he cares about is “Obama! Clinton! We’re getting scroooood!”

    2
  9. Hans says:

    “His solution to bailout the agriculture sector is emblematic of socialism.”

    If this is true, then so is America’s $20T dollar debt, Mr Verdun.

    1
  10. Steve Verdon says:

    @Hans:

    No. Conflating a specific policy with all national debt is nonsense.

    And there is no ‘u’ in my name.

    3
  11. Hans says:

    @Steve Verdon: And there is no ‘u’ in my name.

    Pat, can I buy an o?

    At least, 1/3 to 1/2 of the national debt went for social welfare spending.
    There are many bailout social welfare programs on an annual basics; which
    are certainly emblematic and problematically institutionalize socialism. Mr Verdon,
    if spending tax dollars on other volks is not socialism, we went to different
    public schools.

    Any other conclusion, is a false positive.

    1
  12. Steve Verdon says:

    @Hans:

    if spending tax dollars on other volks is not socialism, we went to different
    public schools.

    Tax dollars are ultimately spent on people. So unless you consider any and all government as socialism then no.

    That a country has a strong social safety does not make it socialist.

    Spending money to prop up an industry based on harm caused by earlier policies designed to control the flow of goods and services…yeah, that’s socialism.

    3
  13. Hans says:

    @Steve Verdon:
    “That a country has a strong social safety does not make it socialist.”

    I am invoking a third party intervention; no blue helmets, however.

    https://www.merriam-webster.com/dictionary/socialism

    1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

    Mr Verdon, if you still disagree, then we will have to agree to disagree.

    Then the bailout(s) to the peak enviro green, energy complex is also socialism?

  14. @Hans: Dude, a) the dictionary is a piker move. It is a classic mistake of college freshmen the world over. But b) (and worse): the definition you cite does not describe how a social safety net works and actually underscores that the US is not socialist.

    We do not have “collective or governmental ownership and administration of the means of production and distribution of goods.”

    3
  15. al Ameda says:

    Trump is like a dog, he wants to mark his territory. In his 18 month term he has lifted his leg, sprayed and marked everything that had to do with Obama, Canada, Mexico and Central America, most of Europe, and most of the countries of our Asian alliances and partnerships. There seem to be only 2 exceptions: Russia and N. Korea, lucky them.

    Frankly, it does not matter if he inherits a system of trade and alliances that may have some flaws but as normally assessed, is generally functioning as it should. He has a powerful need to put his brand (mark) on everything, so he will break it down in order to rebuild it in his name.

    And if the new Trump-created-and-branded system is failing? No matter, he will blame Obama or China, or what/whom ever, and move on to the next chance to run his ‘art of the deal’ con. He’s been this way for well over 30 years, we know this guy.

    1
  16. Steve Verdon says:

    @Hans:

    What Steven said. A social safety net does not mean control of the means of production by the government.

    In short you are an ignoramus.

    1
  17. Hans says:

    @Steven L. Taylor:

    Then what is your defining definition, Mr Taylor?

    Are words limit to a single action?

    https://www.britannica.com/topic/socialism

    This link buttress your point of view. Nevertheless, see reply
    to Mr Steve “mean” Verdon.

    1
  18. @Hans: It depends on how serious a conversation you want to have. If we are dealing in the realm of dictionaries and general encyclopedia entries, we would appear to be dealing an awfully rudimentary starting spot.

    You seem to be using “socialism” to means “spending on social policy” or, perhaps, simply spending you don’t like (which is often how the term is used in right wing infotainment circles).

    I suppose the question is: what are you actually asking and what do you really want to know?

    1
  19. Hans says:

    @Steve Verdon:

    “What Steven said. A social safety net does not mean control of the means of production by the government.

    In short you are an ignoramus.”

    Steve, getting frustrated? According to the Urban Dictionary for all Urban Dummies,
    it means all governmental unit spending – minus capital investment & war department
    expenditures. Henceforth, if governmental unit spending of GNP is larger than any
    other sector, you have SOCIALISM.

    Furthermore, why does your party refer to itself as Progresseos or Social Democrafts?

    If you have a need to be mean spirited, then please do not communicate
    with me. I prefer socialists folks whom are capable of being civil and willing to
    helf those of us with GEDs. <——– we as a protected class are protected by the 1982 ADA.

    1
  20. Hans says:

    @Steven L. Taylor:

    ” You seem to be using “socialism” to means “spending on social policy” or, perhaps, simply spending you don’t like (which is often how the term is used in right wing infotainment circles).”

    Can I subscribe to the point of view, that you and others are using a very rudimentary
    (elementary) view of Socialism? You have completely discounted the fact that a word
    definition are diverse, in nature.

    Therefore, this could and should include but limited to redistribution of production.

    Hence, party A production of labor is mandated for redistribution to third parties
    via police power. A basic tenet of the world socialist movement for prosperity, is the
    underlying dogma of confiscation and fiat redistribution. (state sanctioned)

    This is beyond dispute; unless of course the debate takes place on the
    Falkland Island.

    The notion of “social safety net” is not exempt, as it is designated to a
    part and not a whole. Anytime labor or production is taken and give to others
    without consent, it is an act of Socialism.

    “Socialism, social and economic doctrine that calls for public rather than private ownership or control of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members.”

    There is little difference between this explanation and that of the
    rule of the proletariat.

  21. @Hans:

    Anytime labor or production is taken and give to others without consent, it is an act of Socialism.

    By that definition any taxation is socialism. Ergo all governments are socialist. This vitiates any useful application of the term.

    Unless, of course, by “consent” you mean by an elected government, at which point no representative democracy is socialist, no matter the level of taxation. This also vitiates any useful application of the term.

    1
  22. @Hans:

    Can I subscribe to the point of view, that you and others are using a very rudimentary
    (elementary) view of Socialism? You have completely discounted the fact that a word
    definition are diverse, in nature.

    It is difficult to take seriously an accusation that one is being rudimentary by someone in a debate who has appealed to the dictionary and to an encyclopedia.

    1
  23. Hans says:

    https://www.britannica.com/topic/communism

    “Communism, political and economic doctrine that aims to replace private property and a profit-based economy with public ownership and communal control of at least the major means of production (e.g., mines, mills, and factories) and the natural resources of a society. Communism is thus a form of socialism—a higher and more advanced form, according to its advocates. Exactly how communism differs from socialism has long been a matter of debate, but the distinction rests largely on the communists’ adherence to the revolutionary socialism of Karl Marx.”

    The similarity between Socialism and Communism are frightful
    close. First cousin, Second cousin.

    1
  24. Hans says:

    @Steven L. Taylor:

    “By that definition any taxation is socialism. Ergo all governments are socialist. This vitiates any useful application of the term.”

    No sir. I clearly define non-social governmental unit spending, which you chose
    to omit, weather by accident or design.

    If you Omit, you must acquit.

  25. @Hans:

    1) The only time the term “non-social” appears in this thread is when you just now said it. Hence, I am not sure how I respond to something that was not stated.

    2) This raises the question of what spending is “non-social.”

    3) Regardless, you stated “Anytime labor or production is taken and give to others without consent, it is an act of Socialism.” That suggests, if not outright states, that all taxation is essentially theft. Why would it matter upon what you spent the money if taxation itself is questioned?

    Regardless, statements like “The similarity between Socialism and Communism are frightful
    close. First cousin, Second cousin” underscore you are just playing games because since we have not even agreed upon a definition of socialism (which, apparently in your mind is linked to the ill-defined “social spending”) then how can we start talking about communism?

  26. Hans says:

    @Steven L. Taylor:

    “It is difficult to take seriously an accusation that one is being rudimentary by someone in a debate who has appealed to the dictionary and to an encyclopedia.”

    Please, Mr Taylor, you must understand that you have a very large following, which
    requires us to be concise and with a firm foundation.

    Furthermore, there are no accusation(s) but rather a public debate.

    And if you reject the non-bias(ness) of a dictionary or encyclopedia, then by all means
    we should conclude our lovely discourse.

    Mr Verdon, has already done so.

  27. Hans says:

    @Steven L. Taylor:

    “Steven L. Taylor says:
    Wednesday, August 1, 2018 at 11:38

    @Hans:

    Anytime labor or production is taken and give to others without consent, it is an act of Socialism.

    By that definition any taxation is socialism.” Yes, if given to a part; no, if given to the whole.
    Please, please note the distinction.

    ” Ergo all governments are socialist.” For a governmental unit to be designated as such,
    it requires a preponderance of like minded ideology and implementations and is not
    mutually exclusive to public expenditures.

    Any GU, can introduce spending or programs which could be label or deemed
    socialistic in nature. This certainly occurred during the Great Depression. Socialist
    units can also revert, in part, to a more market based society than a command society.
    Sweden took such measure, to reconstitute their lagging economy.

    A command society is naturally, left of center.

    I am sorry, Mr Taylor, but I view your definition(s) too broad and nebulous.

  28. Hans says:

    @Steven L. Taylor:

    “3) Regardless, you stated “Anytime labor or production is taken and give to others without consent, it is an act of Socialism.” That suggests, if not outright states, that all taxation is essentially theft.

    The premise is false and as well as your conclusion. Redistribution of labor, by fiat, to a part,
    is an act of Socialism. This is empirical and beyond dispute. It is the classic description of
    this ideology.

    “Regardless, statements like “The similarity between Socialism and Communism are frightful
    close. First cousin, Second cousin” underscore you are just playing games because since we have not even agreed upon a definition of socialism (which, apparently in your mind is linked to the ill-defined “social spending”) then how can we start talking about communism?”

    Mr Taylor, no games nor no agreement on the definition of socialism: Your diversity
    should allow for a broader spectrum of meanings for this word.

    I have made my position quite clear on this matter.

    Let me provide an example.

    The city council votes to increase taxes for a new firetruck, it is
    a non-socialist budget item. It is for the whole.

    If the city council decides to amend the tax rolls, so a
    business is exempt from some or all local property taxes,
    this would represent a redistribution of income, hence a socialist
    or a central plan command. It is for the part.

    “(which, apparently in your mind is linked to the ill-defined “social spending”)”

    Socialist GU behaviors are much broader than your quote above. The
    scope of Central Planners are greater than the mere act of controlling the
    purse.

    Sorry, I have to leave for my Head Start classes now.

  29. Ben Wolf says:

    @Hans:

    Redistribution of labor, by fiat, to a part,
    is an act of Socialism. This is empirical and beyond dispute. It is the classic description of this ideology.

    That is not, in fact, the classic description of socialism. The core definition of socialism is the people working at the local deli, or Goldman Sachs, or the hospital, or Google, are the ones who own it and run it. Joseph Stalin, after consolidating power in the early 1930’s made a political decisions to claim his centralized system of control was socialism, an idea eagerly picked up by the Right in the United States. And so you continue to believe Soviet propaganda today.

    Marx never said anything about socialism having anything to do with the state. In fact he wrote almost nothing about the state; it wasn’t interesting to him. He defined capitalism as the employee-employer relationship, not dissimilar to the relationship of lord and serf or master and slave.

    Why not dissimilar? Because like the serf and slave, the employee has no say, no control in the production process. The employer tells the employee what to produce, where to produce, how to produce, when to produce, what’s done with the production and profits, how to invest, whether the employee gets a vacation, health care, or even a minute to visit the restroom.

    Why does that description sound so similar to the Soviet Union? Because Lenin declared in Left-wing Communism: an Infantile Disorder that Russia wasn’t ready for socialism and needed a period of capitalist development. He declared, explicitly, that they must build state capitalism, which replicated the structure of the corporation at a national level. Instead of a CEO they had a Secretary General. Instead of a board of directors they had the Politburo. Instead of multiple layers of MBA bureaucrats they had multiple layers of state officials. And at the bottom of both systems, the workers who must obey.

  30. @Hans:

    Yes, if given to a part; no, if given to the whole.
    Please, please note the distinction.

    So, Medicare is socialism, but universal healthcare would not be?

  31. @Hans:

    For a governmental unit to be designated as such, it requires a preponderance of like minded ideology and implementations and is not mutually exclusive to public expenditures.

    That makes no sense.

  32. @Hans:

    The premise is false

    I am trying to figure out your premises.

    and as well as your conclusion. Redistribution of labor, by fiat, to a part,
    is an act of Socialism. This is empirical and beyond dispute. It is the classic description of
    this ideology.

    I have no clue as to what you are trying to say.

  33. Ben Wolf says:

    If the city council decides to amend the tax rolls, so a business is exempt from some or all local property taxes,
    this would represent a redistribution of income, hence a socialist or a central plan command. It is for the part.

    So, a corporation is capitalist until such time as it pays a lobbyist to push for legislation that favors it, at which point it instantaneously becomes socialist?

    I ask because what you define as socialism appears to mean any activity beyond the walls of the household of which you don’t approve.

  34. @Hans:

    I am sorry, Mr Taylor, but I view your definition(s) too broad and nebulous.

    I have never given you a definition. I have been trying to figure out your definition, which I now have (sort of), and which does not make any coherent sense.

  35. @Ben Wolf: It is an unusual formulation, to be sure.

  36. Ben Wolf says:

    @Steven L. Taylor: I think it’s actually pretty common, in the United States, that is. People who have never met a socialist have been taught their entire lives that socialism is a dark plot to steal everything and enslave them. Therefore anything that feels like theft or the trampling of their rights is socialism.

    In Europe that phenomenon doesn’t occur because aunt Millie who bakes those delicious pies is a Communist member. People grow up understanding it in a way Americans don’t.

    1
  37. @Ben Wolf: I am not surprised by the lack of understanding of the term. I am somewhat amused at the circuitous nature of his attempt at definition, however.

    It also occurs to me that it is interesting that all of this is in the context of defending tariffs. I am having a hard time figuring out why, by his “definition” of socialism that tariffs would be acceptable (I am not sure how any taxation is acceptable save for universal programs, which apparently are not socialist).

    1
  38. Ben Wolf says:

    @Steven L. Taylor: I suppose what I find interesting is the apparent desire to avoid a workable definition of either socialism or capitalism by those who identify as anti-socialists. Either they think it doesn’t matter, which is cynical and/or they fear a coherent definition would somehow box them in.

    I suspect the latter, because once historical evidence is brought in they abandon the conversation entirely.

  39. Hans says:

    “I suspect the latter, because once historical evidence is brought in they abandon the conversation entirely.”

    Mr Wolf, three examples please. Two, if you are pressed for time; one, if you are encumbered.

  40. Ben Wolf says:

    @Hans:

    What is state capitalism under Soviet power? To achieve state capitalism at the present time means putting into effect the accounting and control the capitalist’ classes carried out. We see a sample of state capitalism in Germany. We know that Germany has proved superior to us :.. state capitalism would-be our salvation; if we had it in Russia, the transition to full socialism would be easy, would be within our grasp, because state capitalism is something centralized, calculated, controlled and socialized, and that is exactly what we lack… Only the development of state capitalism, only the painstaking establishment of accounting and control, only the strictest organization and labour discipline, will lead us to socialism. Without this there is no socialism.

    V. I. Lenin
    Session of the All-Russia C.E.C..
    April 29 1918

  41. Hans says:

    Mr Wolf, I am not sure what you are inferring with
    the lengthy quote of Comrade Lenin.

    Alex, can I have Leninism for $2000.

    This state/capitalism “theorem” has diminishing returns,
    as it will be demonstrated in Red China, going forward.

    Nippon, has a similar structure but with corporations at
    the helm, rather than the skinless state.

    Give more time, I am afraid that Hitlernomics would have
    proven also to be an unmitigated economic disaster; supported
    principally with debt uber alles, despite the numinous trumpets of
    early success.

  42. Hans says:

    @Steven L. Taylor:

    “(i.e., destabilize the post-WWII peace that was deepened by the end of the Cold War)”

    I am miffed by this statement, Mr Taylor. Could you, so kindly, amplify upon it?

  43. Hans says:

    @Steve Verdon:

    “Spending money to prop up an industry based on harm caused by earlier policies designed to control the flow of goods and services…yeah, that’s socialism.”

    “Tax dollars are ultimately spent on people.”

    This supports the idiom of “birds of feather flock together.” My apology
    for applying both a left and right wing discipline.

  44. Hans says:

    @al Ameda:

    “Trump is like a dog, he wants to mark his territory.’

    Excellent assessment! You can label his supporters, like me, Trumpet
    or Trumppets, whichever fits your particular vernacular.

  45. Hans says:

    @Steve Verdon:

    “That a country has a strong social safety does not make it socialist.”

    Well then, Mr Verdon, what does?

  46. Ben Wolf says:

    @Hans: When the workers own and run the businesses.

  47. Hans says:

    @Steven L. Taylor:

    “We do not have “collective or governmental ownership and administration of the means of production and distribution of goods.”

    We most certainly do, just to a lessor extent. Airfields; sports mausoleums; toll roads;
    Port Authority – real estate; TVA; millions of acres of raw land; mineral rights; all land
    surface waters; territorial waters; patent rights; institutions of lower & higher learning;
    water mains; sewer lines; right-of-ways; currency; 50% of health care sector is government.

    Your quote, Mr Taylor, is more accurate when framed in the 19th century.

    The forerunners of Collectivists were, Teddy Roosevelt and Wood Wilson.

  48. Hans says:

    @Steven L. Taylor:

    “So, Medicare is socialism, but universal healthcare would not be?”

    That, Mr Taylor, is your assumption and not mine.

  49. Hans says:

    @Steven L. Taylor:

    Steven L. Taylor says:
    Thursday, August 2, 2018 at 08:40

    @Hans:

    For a governmental unit to be designated as such, it requires a preponderance of like minded ideology and implementations and is not mutually exclusive to public expenditures.

    That makes no sense.

    I will rephrase. If governmental units invoke economic and social
    behavioral mandates, which reduces freedoms and economic choices
    you have the formation of socialism.

    Does that make cents.?

  50. Hans says:

    @Steven L. Taylor:

    Steven L. Taylor says:
    Thursday, August 2, 2018 at 08:42

    @Hans:

    The premise is false

    I am trying to figure out your premises.

    and as well as your conclusion. Redistribution of labor, by fiat, to a part,
    is an act of Socialism. This is empirical and beyond dispute. It is the classic description of
    this ideology.

    I have no clue as to what you are trying to say

    Steven L. Taylor says:
    Thursday, August 2, 2018 at 08:45

    @Hans:

    I am sorry, Mr Taylor, but I view your definition(s) too broad and nebulous.

    I have never given you a definition. I have been trying to figure out your definition, which I now have (sort of), and which does not make any coherent sense.

    I am sorry that I am such a poor communicator. I have no formal training
    or wall certificate.

    Then please give us your definition of Socialism.

  51. Ben Wolf says:

    @Hans,

    First, man produces in an associated, not competitive way; he produces rationally and in an unalienated way, which means that he brings production under his control, instead of being ruled by it as by some blind power. This clearly excludes a concept of socialism in which man is manipulated by a bureaucracy, even if this bureaucracy rules the whole state economy, rather than only a big corporation. It means that the individual participates actively in the planning and in the execution of the plans; it means, in short, the realization of political and industrial democracy. Marx expected that by this new form of an unalienated society man would become independent, stand on his own feet, and would no longer be crippled by the alienated mode of production and consumption; that he would truly be the master and the creator of his life, and hence that he could begin to make living his main business, rather than producing the means for living. Socialism, for Marx, was never as such the fulfillment of life, but the condition for such fulfillment.

    Erich Fromm, 1961

  52. Hans says:

    @Ben Wolf:

    “So, a corporation is capitalist until such time as it pays a lobbyist to push for legislation that favors it, at which point it instantaneously becomes socialist?

    I ask because what you define as socialism appears to mean any activity beyond the walls of the household of which you don’t approve.”

    As John McEnroe would say to the sideline judge – “are you serious!!!!!!”

    Let me cite you an example. A special needs ball team team gets four out;
    four strikes; no salary cap; hit by pitch – a hate crime; batter circles the
    bases; governmental unit funding for depressed economic stadiums; gets
    two runs at the start of the game – for disadvantage teams.

  53. Ben Wolf says:

    @Hans:

    A special needs ball team team gets four out;
    four strikes; no salary cap; hit by pitch – a hate crime; batter circles the
    bases; governmental unit funding for depressed economic stadiums; gets
    two runs at the start of the game – for disadvantage teams.

    This is not a complete sentence and I cannot understand it, nor does the analogy appear to apply to the subject. Please stop trying to be clever and speak plainly.

    1
  54. Hans says:

    @Ben Wolf:

    “In Europe that phenomenon doesn’t occur because aunt Millie who bakes those delicious pies is a Communist member. People grow up understanding it in a way Americans don’t.”

    She is also the one whom drives you to the Gulag, not because you
    complained about her delicious pies but because you axed for a second
    copy.

  55. Ben Wolf says:

    @Hans: How many gulags does Germany have?

  56. Hans says:

    @Ben Wolf:

    @Steven L. Taylor: I suppose what I find interesting is the apparent desire to avoid a workable definition of either socialism or capitalism by those who identify as anti-socialists.
    ===========================================
    No, Mr Wolf, it is the pro-socialist forces that bathe in opaqueness.

    We demand only liberty. You demand collectable collectivism.

    We stand on our own two feet. You require the passage of a village.

    We leave you alone, while you inure we join your multi-tier formations.

    We are limited by morals and the Constitution, while nothing hinders your
    advances.

    We exercise full restraint, while you seek unbridled control

    We seek a harbor, while you build of an empire

    We learn from the past, you dream of the future

  57. Ben Wolf says:

    @Hans:

    I suppose what I find interesting is the apparent desire to avoid a workable definition of either socialism or capitalism by those who identify as anti-socialists.

    But you are an anti-socialist. Why would you find interesting your own “apparent desire to avoid a workable definition of either capitalism of socialism”?

  58. @Hans:

    Nippon, has a similar structure but with corporations at the helm, rather than the skinless state.

    Nippon? Are you translating from another language?

  59. Hans says:

    @Ben Wolf:

    Ben Wolf says:
    Sunday, August 5, 2018 at 08:29

    @Hans: How many gulags does Germany have?

    “This is not a complete sentence and I cannot understand it, nor does the analogy appear to apply to the subject. Please stop trying to be clever and speak plainly.”

  60. Hans says:

    This was omitted by, Mr Verdon, regarding the Tax Foundation
    article.

    “Uncertainty in Modeling Estimates

    There are three primary sources of uncertainty in modeling the provisions of the Tax Cuts and Jobs Act: the significance of deficit effects, the timing of economic effects, and expectations regarding the extension of temporary provisions.

    Some economic models assume that there is a limited amount of saving available to the United States to fund new investment opportunities when taxes on investment are reduced, and that when the federal budget deficit increases, the amount of available saving for private investment is “crowded out” by government borrowing, which reduces the long-run size of the U.S. economy. While past empirical work has found evidence of crowd-out, the estimated impact is usually small. Furthermore, global savings remains high, which may explain why interest rates remain low despite rising budget deficits. We assume that global saving is available to assist in the expansion of U.S. investment, and that a modest deficit increase will not meaningfully crowd out private investment in the United States.[4]

    We are also forced to make certain assumptions about how quickly the economy would respond to lower tax burdens on investment. There is an inherent level of uncertainty here that could impact the timing of revenue generation within the budget window.

    Finally, we assume that temporary tax changes will expire on schedule, and that business decisions will be made in anticipation of this expiration. To the extent that investments are made in the anticipation that temporary expensing provisions might be extended, economic effects could exceed our projections.
    Conclusion

    The Tax Cuts and Jobs Act represents a dramatic overhaul of the U.S. tax code. Our model results indicate that the plan would be pro-growth, boosting long-run GDP 1.7 percent and increasing the domestic capital stock by 4.8 percent. Wages, long stagnant, would increase 1.5 percent, while the reform would produce 339,000 jobs. These economic effects would have a substantial impact on revenues as well, as indicated by the plan’s significantly lower revenue losses under dynamic scoring.”
    ========================================
    May I suggest that the use of computer models are suspect at
    best, in forecasting future economic events.

    I do use them, howsoever, just prior to launching my boat for a
    fishing expedition.

    https://www.cbsnews.com/news/why-are-economic-forecasts-wrong-so-often/

  61. Ben Wolf says: