It has been brought to my attention, via the shouting on social media and the groaning of the common man’s purse, that we are currently engaged in a most spectacular feat of financial magic. Our dear leaders have discovered a way to tax the “foreigner” by reaching into the pockets of the American farmer, the office worker, and the mother buying a gallon of milk, and extracting the coins therein with a flourish of patriotic trumpets.
They call it a Tariff.
In simpler times, we called it a “shakedown,” but “Tariff” has a much more dignified, intelligent, and continental ring to it.
The claim is as follows: we shall place a heavy toll upon the goods of distant nations, and those nations, being struck with a sudden fit of generosity and remorse, shall pay that toll directly into our Treasury.
It is a lovely thought. It is the sort of thought a man has just before he tries to lift himself off the ground by pulling upward on his own bootstraps.
The Math of the Mirage
The cold, unfeeling data of the Commerce Department, which I suspect is run by men who have the unfortunate habit of reportin things as they wish them to be. They speak of a 94% “pass-through.” For those who did not spend their youth avoiding the schoolhouse, let me translate the arithmetic:
If a shovel costs a dollar to bring across the sea, and the Government demands a twenty-five cent “protection” fee, the foreigner does not sigh and reach for his checkbook. No, the importer pays the quarter, adds a nickel for his trouble, and hands the bill to you.
Thus, for the privilege of being “protected” from a cheap shovel, you are granted the singular honor of paying a dollar and thirty cents for it. We are told the foreigner is being bled dry; meanwhile, the American consumer is the one standing in the surgical theater wondering why his own veins are feeling so remarkably empty.
The Billionaire’s Perspective
I am told our Great Architects of Trade are men of immense fortune. A billionaire is a man who views a dollar the way a mountain views a pebble, it is something beneath his notice. To ask such a man the price of milk or the cost of a day’s labor is like asking a fish to describe the texture of a dry desert wind. He has heard of such things, perhaps, but he has never felt the heat.
To the man in the gilded tower, a $901 billion deficit is merely a row of zeros on a ledger, a bit of ink that has gone astray. But to the 99% who live down here in the mud and the daylight, that deficit is the missing butter on the bread, the coat and boots that must last another winter, and the realization that “trickle-down” economics is merely the process of those at the top staying dry while everyone else waits for a leak in the roof.
The Verdict
We are told this trade war is for our own good. It reminds me of the doctor who told the patient, “I have cured your gout, but you may find the resulting amputation a bit inconvenient for walking.”
We have “corrected” our trade imbalance by making everything more expensive for everyday Americans. I am talking to the 99%. If this is victory, I should hate to see what a defeat looks like.
I have often said that it is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt, but in the case of our trade policy, the Treasury’s ledger has already done the talking for all of us in the mud.