Today’s Brew 2-7-17

As only John Tamny can, he has used Sunday’s Super Bowl victory to make a point about economics:

The New England Patriots Win Shows Why Steve Bannon Gets Prosperity Wrong

Excerpt:

Applied to Trump, and his chief policy strategist, Steve Bannon, both have ideas about the policies necessary for prosperity, and both surely believe they’re excellent.  Indeed, if the economy falters under Trump, historians will judge both the president and his top adviser negatively.  Rightly so, since economic growth is so simple.  It’s about removing or reducing the four main governmental barriers to production: taxes (a penalty placed on work and investment), regulation (a tax on production that fails, almost as a rule), floating money values (a tax on trade and investment), along with tariffs (a tax on work).

Trump and Bannon get the first two broadly right, but on money and trade they miss in a big way.  Money is merely a lubricant that makes trade (the purpose of our work) and investment (the direction of capital to future wealth creation) more frequent, but Trump’s been explicit in his desire for a weaker dollar that will render both less common.  And as workers we’re all importers, by definition (why else would we work?), which means tariffs tax the reason we’re working to begin with.


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