Tariffs

So… it looks like we may be sliding towards purgatory.

The administration launched the long-feared tariff wars. Maybe the economists and the finance types in the administration knows something that the rest of us don’t or they have a rabbit to pull out of a magic hat.

My only understanding of the tariffs is that they are basically a tax on imports that the consumers pay. Our collective understanding (based on news) is that the Smoot-Hawley tariffs enacted back in 1930 or so either extended or worsened the Great Depression. Or, at minimum, the act did not help the dire economic situation.

Does the administration know something other economists don’t? Maybe Peter Navarro, Steve Bessent or Howard Lutnick can explain how the tariffs will help America?

Possible reasons for tariffs

One thing that is touted is that the money coming in from the tariffs (or the “tax” that Americans will be paying) will help fund the tax cuts. “The government is already getting billions or trillions of dollars flowing through its coffers.” Although the tariffs just started last week.

Or maybe it’s this: the tariffs will force companies to bring back manufacturing to America with the implied suggestion that jobs would come back. One little problem: manufacturing will be mostly automated. Or maybe they will be like Lutnick says: “people “screwing screws in the Apple phones”.

Or maybe it’s to make those other countries “stop taking advantage of us!” They’ve been robbing us blind and causing trade deficits, so the tariffs will rebalance the trade deficits. Make those countries buy stuff from us. Except there are some countries – very tiny countries – that sells us agriculture or something but can’t buy our goods which tend to be services or high end with intellectual property involved.

Only Congress can reverse the tariffs…

There have been protests but I think it is too early for tariffs to have made an impact yet. I think people have been protesting the DOGE cost cutting efforts and the attempts at getting into personal data.

I have seen news about Republican Congressmen (or Congresswomen) facing their constituents to do something about the DOGE cost cutting, especially in regard to Social Security, Medicaid or Medicare, the veterans, education, maybe even the USAID, and so on. The problem is I can’t tell if the MAGAs are attending the town halls or the independents and Democrats/progressives are the ones attending.

If the attending constituents are Republicans or MAGAs, they need to wear their red hats.

Because the only way the Congressmen (or women) will begin to take action to reverse the tariffs, is for them to understand that the MAGAs do not like the tariffs. News suggest only Congress can remove the tariffs, but Congress is too cowed to do anything.

They are afraid of their constituents.

The constituents need to express their disapproval of the tariffs.

And they need to wear their red hats so that their Congressperson understands that the MAGAs do not like the tariffs.

Right now, I just don’t know if the MAGAs are truly in opposition to the tariffs.

A funny story…

It appears that Peter Navarro is the main architect of the tariffs. I’ve seen some news that he had cited some expert economist to support his views in his books.

One problem: that expert does not exist. The name of the so-called expert is Ron Vara is an anagram of Navarro’s last name.

Yeah, it’s funny if you go for black gallows humor.

What I’m having trouble with is the fact that Peter Navarro has a PhD from Havard in economics. It is hard to square what he is doing with that fact. Elon Musk is calling him a “moron” and he might actually be one…if the economy really goes bad as expected from history.

Another funny story…

Every country and some are getting retaliatory tariffs for “taking advantage of America.”

Including uninhabited islands and islands inhabited by penguins.

You can’t make this stuff up. Whoever designed the tariffs should be fired.

Scary times ahead

Stock markets have been crashing since the announcement of the tariffs. I understand that CEOs have been calling the administration to reverse or remove the tariffs due to anticipated effect on the economy.

So…if tariffs adversely impact the MAGAs in the coming weeks, the MAGAs should start showing up in town halls.

And they need to wear their red hats so that their Republican Congressperson understand that the MAGAs are unhappy; otherwise, we would all think the dissent is coming from the Democrats.

Meanwhile, we will be sliding towards purgatory.