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Schmidt Wrote:This is another issue that divides Democrats. Those who look at the big economic picture like Robert Reich are opposed to the Trump tariffs. Yet if you come from a steel making state, then you are probably cheering it on. That's what Sherrod Brown of Ohio and Bob Casey of Pennsylvania are doing.
I have Googled Bernie Sanders on the Trump tariffs and so far I cannot find any public statements by him. My guess is he is supportive. I also searched to see if Sanders economic adviser, Stephanie Kelton had stated a public opinion but no she too has been quiet.
But I liked this opinion article by Catherine Rampell in the Washington Post:
Don’t blame China, Mr. President. Blame the robots.
"Mr. President, if you’re looking for someone to demonize for killing blue-collar jobs in your favorite industries, don’t blame China and “bad trade deals.” Blame the robots."
As Rampell points out, "thirty years ago, the U.S. iron and steel mills employed about 188,000 people. Today, that number is about 86,000." However, we’re still producing about as much steel today as we did 30 years ago but just with half as many workers as "technological advances — or, to oversimplify, robots" are taking their jobs.
This is a trap that both Donald Trump and Bernie Sanders fell into during their campaigns. They used China and Mexico as the whipping posts to drum up votes while never mentioning robots or market conditions for the loss of jobs. Now Trump's tariffs on steel and aluminum have little to do with China and Mexico and a whole hell of a lot to do with Canada and Brazil. Will Canada become the "New China" for Bernie Sanders whipping post?
Still waiting to hear from Sanders. Someone write in if they know he has chimed in. Ditto for Stephanie.
Hey Schmidt,
Here's Dr Kelton's MMT paper on trade from like 2003 written with John Henry.
cfeps.org/pubs/wp-pdf/WP26-HenryBell.pdf
Here's what Warren Mosler wrote a year ago and recently revised to keep current
(the underlined is my emphasis)
Shop to Win!
The President no doubt knows that when you go shopping, buying at the lowest price is the mark of a winner, while paying too much is the mark of a loser. Yet when it comes to buying lumber from Canada, cars from Germany, and now steel and aluminum, the President has viciously attacked and is now retaliating against other nations for not charging us enough for their products!
And while everyone knows that buying at the lowest price is a good thing, there is no serious push back from Democrats, the ‘free trade’ Republicans, the media or any of the headline mainstream analysts. There is clearly something very wrong with their underlying mainstream logic that leads to this type of costly Presidential blunder.
Yes, when we buy imports jobs are lost, just as when we replace workers with machines, including lawn mowers, vacuum cleaners, and power washers, jobs are lost. And yet somehow we’ve survived all that. We went from needing 99% of the people working to grow our food to less than 1%, and manufacturing jobs are down to only 7% of the labor force. And yet the remaining 90% of us are not all unemployed, as jobs have proliferated in the service sector, where most of those jobs are now considered to be better jobs than the lost agricultural and manufacturing jobs. Nor has a trade deficit necessarily resulted in higher unemployment or lower pay. In 1999, for example, we had record imports with unemployment under 4% and inflation under 2%, and students were getting recruited for good paying jobs well before graduation.
The answer to sustaining high levels of employment and pay is fiscal policy. If for any reason, including more imports, weak demand at home is keeping unemployment too high or wages too low, the appropriate policy response is fiscal relaxation- either a tax cut or spending increase, even if that increases the public debt- and not to tax or otherwise drive up the cost of imports. Unfortunately however, the policy that allows all of us to pay the lowest prices for imports and have good paying jobs to replace those lost because of imports has been taken entirely off the table by both Republicans and Democrats. Consequently a very good thing for America- lower prices of imports- has been turned into a very bad thing- unemployment, and all because of the fake news about the public debt that is supported by Republicans and Democrats.
The US public debt is nothing more than the dollars spent by the federal government that have not yet been used to pay taxes. Those dollars spent and not yet taxed sit in bank accounts at the Federal Reserve Bank that are called ‘reserve accounts’ and ‘securities accounts’, along with the actual cash in circulation. Treasury securities (bonds, notes, and bills) are nothing more than dollars in securities accounts at the Federal Reserve Bank, functionally the same as dollars in savings accounts or CD’s at commercial banks.
Think of it this way- when the government spends a dollar, that dollar either is used to pay taxes and is lost to the economy, or it’s not used to pay taxes and remains in the economy. Deficit spending adds to those dollars that were spent but not yet taxed, which is called the public debt. And what’s called ‘paying off the debt’ (as happens to 10’s of billions of Treasury securities every month) is just a matter of the Fed shifting dollars from securities accounts to reserve accounts- a simple debit and a credit- all on its own books. (No tax payers or grand children required…) The ‘ability to pay’ is always there- it’s just a debit and a credit to accounts on the books of the Federal Reserve Bank. The fear mongering about the US running out of money or constraints by foreigners is simply not applicable to today’s monetary system.
And if you are worried about inflation, our proposal works to lower prices for all of us, while the Presidents direct policy is to raise the prices we all pay.
And if the concern is national security, the policy response that best serves public interest is to order the defense department to require domestic sourcing of what they consider strategically important,
and let the rest of us continue to shop for the lowest possible prices.
Point is, once it’s understood that 1) the public debt is nothing more than what can be called the net money supply 2) there is no risk of default 3) there is no dependence on foreign or any other lenders 4)there is no burden being put on future generations the President will be free to make us all winners by being our shopper in chief who works to get us the lowest possible prices.