Trumponomics - Or How I Learned to Stop Worrying & Love Tariffs

[Jeff V]

With the way that Trump set tariffs then cancel/postpone them repeatedly. How can investors be sure that Trump isn't going to cancel it again like in a few days or months?

Why would they invest to move manufacturing to US when Trump can suddenly change his mind and remove the tariffs and make it is not competitive to manufacture in US?

Or why would they invest in such a long term project when the next administration would cancel the benefits? And there's no real benefits...trade is as it is because Americans prefer to spend less for certain things. Paying $10 for a pair of socks is not something most are willing to do just because they are sewn in America. To bring manufacturing back here (and remember, when Biden left office, unemployment was low) everything is going to be expensive because American labor is expensive.

[Jeff V]

With the way that Trump set tariffs then cancel/postpone them repeatedly. How can investors be sure that Trump isn't going to cancel it again like in a few days or months?

Why would they invest to move manufacturing to US when Trump can suddenly change his mind and remove the tariffs and make it is not competitive to manufacture in US?

Or why would they invest in such a long term project when the next administration would cancel the benefits? And there's no real benefits...trade is as it is because Americans prefer to spend less for certain things. Paying $10 for a pair of socks is not something most are willing to do just because they are sewn in America. To bring manufacturing back here (and remember, when Biden left office, unemployment was low) everything is going to be expensive because American labor is expensive.

[LawBeefaroni]

American labor is expensive.

Not if the ruling class has their way.

[Smoove_B]

Yeah, no surprise Trump appointed people to repeal and/or destroy organizations like OSHA and the EPA with all their worker and environmental protection nonsense that really cuts into the bottom line.

[YellowKing]

Here's a great blog post from Stonemaier Games about how the tariffs will impact the board game industry. I like this example because board games are a pretty simple product that don't have a lot of moving parts. If they can't just magically move their factories over here, you can imagine the complexities of moving car or electronics manufacturing to the U.S.

Manufacturing the types of games we make is not an option in the US. People have tried, even recently. Even if a company wanted to invest in the infrastructure to try to make it happen, the short-term losses from the tariffs will eat too deep into their cash to make it possible (plus, many of the machines used to make games are also made in China, so you’ll pay a huge tariff even if you invest in the machines needed to make games in the US). Plus, many publishers currently have print runs in production in China–it simply isn’t possible to change course for those print runs. So with costs (tariff taxes) due to skyrocket in a few months, prices will also significantly increase.

It really smacks to me of the same "magical thinking" Republicans use when they argue that if you don't like the laws in your state then you can "just move." As if everybody has the money to just pick up and go, even if they weren't tied down via jobs, family, houses, schools, etc.

[Holman]

Steve Jackson posted something similar about the cost of game manufacturing in the US. It would basically double the price of a game. I assume that more elaborate components will require even more than that.

This is also goes for book publishing, although I suppose we're all supposed to switch to electronic readers and pay Amazon for them.

[Blackhawk]

This is also goes for book publishing, although I suppose we're all supposed to switch to electronic readers and pay Amazon for them.

Buy a Kobo. The hardware is better, and instead of Amazon, you'll be paying a Canadian company.

[Holman]

This is also goes for book publishing, although I suppose we're all supposed to switch to electronic readers and pay Amazon for them.

Buy a Kobo. The hardware is better, and instead of Amazon, you'll be paying a Canadian company.

I'll give that some thought, although I've always preferred reading on paper.

[Holman]

It really smacks to me of the same "magical thinking" Republicans use when they argue that if you don't like the laws in your state then you can "just move." As if everybody has the money to just pick up and go, even if they weren't tied down via jobs, family, houses, schools, etc.

I also saw it pointed out today that there are (I believe I recall correctly) 32 million businesses in the USA. Of those, only about 25 thousand have 500 employees or more.

The rest (meaning nearly all of them) are small businesses, none of which can command the capital or even loaned assets to make big changes to adapt to Trump's fever dream of a new economy.

[Isgrimnur]

This is also goes for book publishing, although I suppose we're all supposed to switch to electronic readers and pay Amazon for them.

Buy a Kobo. The hardware is better, and instead of Amazon, you'll be paying a Canadian company.

Subsidiary of Japanese company Rakuten.

[Victoria Raverna]

So the rich and powerful are okay with this? No one is going to stop Trump?

https://www.marketwatch.com/story/u-s-s ... y-430919f6

Roughly $11.1 trillion has been wiped away from the U.S. stock market since Jan. 17, the Friday before President Donald Trump took the oath of office and began his second term, according to data from Dow Jones Market Data.

Some $6.6 trillion of that figure was lost on Thursday and Friday alone — the largest two-day wipeout of shareholder value on record, Dow Jones data showed.

[Blackhawk]

It's not the rich and powerful, it's the richer and more powerful.

[Drazzil]

It's not the rich and powerful, it's the richer and more powerful.

Yep.

[Drazzil]

It's not the rich and powerful, it's the richer and more powerful.

Even the ultrarich have to know that they risk undoing the very system they exploit the rest of us with right?

I really want to know.

[Max Peck]

The thing about a market crash is that the really rich just wait it out, resting on their cushy cash reserves, and scoop up all the bargains when the stock prices bottom out. It's super easy, barely an inconvenience, especially if you know it's coming -- you sell before the dip, then pick up the bargains while everything is at rock bottom.

Example:

When the Great Depression hit its lowest ebb in 1933, the unemployment rate exceeded 20 percent and America’s gross domestic product plummeted by 30 percent. Not everyone, however, lost money during the worst economic downturn in American history.

Business titans such as William Boeing and Walter Chrysler actually grew their fortunes during the Great Depression. As the aviation industry took flight in the 1930s with the advent of regular passenger service, Boeing built a vertically integrated empire that manufactured aircraft and operated airlines until the federal government forced its breakup.

Carmaker Chrysler responded to the financial freefall by cutting costs, boosting efficiency and improving passenger comfort in his company’s vehicles. While sales of expensive cars plunged, those of Chrysler’s cheaper Plymouth brand soared. According to Automotive News, Chrysler’s market share rose from 9 percent in 1929 to 24 percent in 1933 as it surpassed Ford as America’s second-largest car company.

Thanks to shrewd investments, fortuitous timing and entrepreneurial vision, the following Americans also profited during the Great Depression.

Joseph Kennedy, Sr. made millions in the unregulated stock market of the 1920s, in part due to insider trading and market manipulation. The Kennedy family patriarch then used his Wall Street earnings to become a movie mogul. After purchasing a failing Hollywood studio in 1926, he consolidated movie companies that churned out low-budget movies, made them more efficient and sold them for big profits. By the time he exited Hollywood in 1931, Kennedy had earned $5 million in the film industry, according to the National Park Service.

While most investors watched their fortunes evaporate during the 1929 stock market crash, Kennedy emerged from it wealthier than ever. Believing Wall Street to be overvalued, he sold most of his stock holdings before the crash and made even more money by selling short, betting on stock prices to fall.

Kennedy biographer David Nasaw said he found no truth to the rumors that the 35th president's father was a bootlegger during Prohibition. However, the lucrative contract Kennedy signed in Prohibition’s waning days to be the sole American importer of Scotch whiskey and gin produced by British distillers such as Dewar’s and Gordon’s contributed to the growth of Kennedy’s wealth from $4 million in 1929 to $180 million by 1935.

[Kraken]

The thing about a market crash is that the really rich just wait it out, resting on their cushy cash reserves, and scoop up all the bargains when the stock prices bottom out. It's super easy, barely an inconvenience, especially if you know it's coming -- you sell before the dip, then pick up the bargains while everything is at rock bottom.

And, tax cuts are coming for the 10% who own 90% of stocks. The markets will party like it's 1999 in a few weeks/months.

Spoiler:

I have no idea if 1999 was a great year for stocks, but you know what I mean.

[LordMortis]

They'll take their tax cuts but the (considerably less than) 10% won't be partying for a few years, I suspect. We're talking 15% general correction in less than a week and nearly 20% (the bear market we love to document) February. In two short days, they went from talking "OMG S&P 4800 could happen" to "OMG S&P 4200" could happen. This is from an S&P 6100.

Now if you were in on the certainty of "Liberation Day" then you're all good, as juxtaposed to the two months of willy-nilly and assuring everyone else tariffs are just negotiations then you're set to party.

[LawBeefaroni]

They'll take their tax cuts but the (considerably less than) 10% won't be partying for a few years, I suspect. We're talking 15% general correction in less than a week and nearly 20% (the bear market we love to document) February. In two short days, they went from talking "OMG S&P 4800 could happen" to "OMG S&P 4200" could happen. This is from an S&P 6100.

Now if you were in on the certainty of "Liberation Day" then you're all good, as juxtaposed to the two months of willy-nilly and assuring everyone else tariffs are just negotiations then you're set to party.

I've spoken to a few "ultra wealthy" folks and they were advised or took it upon themselves to move a lot of their equity holdings to cash, or put on significant hedges, prior to Stupid Day. I wouldn't call it a conspiracy so much as a system designed to benefit them. They have more to lose so they prepare for the possibility of a major move. And they have the means to do so.

[$iljanus]

I need to stop looking at my daughter’s 529 fund. It’s not pretty.

[LordMortis]

I need to stop looking at my daughter’s 529 fund. It’s not pretty.

As with my IRAs. I regret no turning more of my hold off until I can touch my IRA money to cash. I moved move probably 20% but I my internal monologue insisted things are too chaotic and inflation will kill me if I don't stay heavily invested in the indexes. So now that we're here, this is where that money stays, likely to ride a lot lower and then take years to find level. I suppose I get what we deserve for where our nation is going.

[LawBeefaroni]

We'll see what kind of damage control this gaggle of idiots of an administration can do over the weekend but barring any major reversals Monday is going to make Friday look like Tuesday.

[Drazzil]

We'll see what kind of damage control this gaggle of idiots of an administration can do over the weekend but barring any major reversals Monday is going to make Friday look like Tuesday.

I still don't think the idiots in charge really realize that they could implode the whole system that benefits them immensely.

Stock market collapse, currency collapse, real estate collapse... It's all in the cards.

[Max Peck]

You know the trade war is going well when it inspires someone like well-known Canadian Ted Cruz to sprout some vestigial balls and criticize Trump's policy.

It's clear who sees tariffs as a political winner in Washington. It isn't Trump's side

Some of Donald Trump's friends in Washington suddenly sound nervous about him having the keys to the economy. A few are even talking about wrenching them away.

There are a few nascent efforts to pare back the U.S. president's legal power to set tariffs, now being used in an unprecedented manner.

Those efforts are a longshot. What's most significant isn't whether they will happen, at least not yet. What's most significant is what they reveal.

And what they reveal is nervousness among Trump allies — on Capitol Hill, which apparently was as stunned by the scope of his tariffs as Wall Street was.

Take Ted Cruz. The Texas senator says he's fine if Trump is doing this as a negotiating ploy. But he's worried Trump might actually be serious about keeping tariffs in place forever.

If these tariffs on allies remain for 30 days, 60 days, 90 days — still damaging the economy — that's a terrible outcome, Cruz says. And he fears this might actually be the plan.

He made a surprisingly stark prediction about what this would mean in next year's midterm elections, if the tariffs cause a recession.

"In all likelihood, politically, it would be a bloodbath," Cruz said on his podcast Friday. "You would face a Democrat House, and you might even face a Democrat Senate."

Wall Street did not expect Trump to follow through, Cruz said, a point underscored by the eye-popping 10 per cent drop in the S&P 500 index this week.

The Republican also pushed back on the idea that these tariffs will only hurt foreigners, or foreign companies. He said a major American car company told him it now expects to increase the average price of a vehicle by $4,500 by this summer.

[Rumpy]

lol nice. Similarly, I like how Joe Rogan has recently openly criticized Trump's policies. Slowly but surely, former supporters seem to be turning on him.

[Jeff V]

Yeah, no surprise Trump appointed people to repeal and/or destroy organizations like OSHA and the EPA with all their worker and environmental protection nonsense that really cuts into the bottom line.

Not sure if it was mentioned elsewhere, but Florida is attempting to repeal child labor laws so kids can be enslaved to harvest crops since they deported all of the low-paid workers.

[Isgrimnur]

Florida debates lifting some child labor laws to fill jobs vacated by undocumented immigrants

The state’s legislature on Tuesday advanced a bill that would loosen child labor laws, allowing children as young as 14 years old to work overnight shifts. If the new law is passed, teenagers would be able to work overnight jobs on school days. They are currently prevented from working earlier than 6:30 am or later than 11 pm per state law.

The bill passed through the Florida Senate’s Commerce and Tourism committee on Tuesday with five votes in favor of the loosened child labor restrictions and four against them. The bill will pass through two other relevant committees before being put to a vote with the full Florida Senate.
...
The state has been easing up on child labor protections for years. Last year, the legislature passed a law allowing home-schooled 16- and 17-year old teens to work any hour of the day.

The state’s Republican-led legislature on Tuesday will debate the new law, which also includes a number of changes including eliminating working time restrictions on teenagers aged 14 and 15 if they are home-schooled and ending guaranteed meal breaks for 16 and 17 year olds.

The number of child labor violations in Florida has nearly tripled in recent years, according to US Department of Labor statistics.

[Holman]

I spent much of the last 15 years with no retirement plan at all. I was adjuncting and covering my bills but not adding into a TIAA plan or anything else.

What I had was a 403(b) left over from a previous job, which had been growing reasonably since I left it in 2009. Only in 2023 did I get a new job with its own 403(b), and it has been doing pretty well.

Until now. I just saw that everything I'd added to my retirement plan since starting my job more than two years ago has evaporated *this week*.

MAGA!

[LawBeefaroni]

I spent much of the last 15 years with no retirement plan at all. I was adjuncting and covering my bills but not adding into a TIAA plan or anything else.

What I had was a 403(b) left over from a previous job, which had been growing reasonably since I left it in 2009. Only in 2023 did I get a new job with its own 403(b), and it has been doing pretty well.

Until now. I just saw that everything I'd added to my retirement plan since starting my job more than two years ago has evaporated *this week*.

MAGA!

It was a beautiful evaporation. A guy who knew Lee Iococa told me it was one of the best evaporations he has ever seen. A lot of people tell me I cause the most huge evaporations. Lots of people. Just huge, beautiful....and poof!

[RunningMn9]

I spent much of the last 15 years with no retirement plan at all. I was adjuncting and covering my bills but not adding into a TIAA plan or anything else.

What I had was a 403(b) left over from a previous job, which had been growing reasonably since I left it in 2009. Only in 2023 did I get a new job with its own 403(b), and it has been doing pretty well.

Until now. I just saw that everything I'd added to my retirement plan since starting my job more than two years ago has evaporated *this week*.

MAGA!

On the plus side though, as long as you aren’t retiring soon, I wouldn’t lose sleep over it. As horrific as 2008 was when the credit markets seized and we watched total protonic economic reversal, things reversed relatively quickly. Just had to really hold strong for like 5-6 months to let the market bottom out!

[Zarathud]

The markets have been able to correct because the US economy has greatly benefitted from the efficiencies created by international trade. Tariffs are going to equalize the economy in a permanently worse situation. It just shows the world how bad Trump and the Republicans are at economics.

Americans do overreact to price increases. That which brought us Trump will wash away MAGA — or give the preppers the economic collapse they’ve been waiting for.

[LordMortis]

I spent much of the last 15 years with no retirement plan at all. I was adjuncting and covering my bills but not adding into a TIAA plan or anything else.

What I had was a 403(b) left over from a previous job, which had been growing reasonably since I left it in 2009. Only in 2023 did I get a new job with its own 403(b), and it has been doing pretty well.

Until now. I just saw that everything I'd added to my retirement plan since starting my job more than two years ago has evaporated *this week*.

MAGA!

On the plus side though, as long as you aren’t retiring soon, I wouldn’t lose sleep over it. As horrific as 2008 was when the credit markets seized and we watched total protonic economic reversal, things reversed relatively quickly. Just had to really hold strong for like 5-6 months to let the market bottom out!

What if you just retired and don't have a pension? I regret *really* regret not converting more to cash equivalents in February but am glad I at least converted as much as I did. It also took years for markets to bounce back from 2008. Though if you were contributing in those intervening years those contributions were at good discount. OtOH, the 2020 market puking was a quick panic plummet and a comparatively quick recovery. However, with this administration and Congress, I see no path for either a quick resolution or recovery. They're fucks. We're stuck with it for at least another 22 months and I don't see an avenue for recovery in a reasonable timeframe even if the American populace learn anything and shut this shit down in 22 months.

[$iljanus]

You know, if the market was tanking because of some global epidemic that's one thing and I won't like it but I'll accept it. But this self-inflicted bullshit I neither like or accept but unfortunately I need to just bend over and take it. Where the fuck else would I have saved money for our daughter's education? Under the damn mattress? Over the life of the fund it has made us money. But with the tuition price of where she's going, I'd like to maximize that money rather than see my return get pissed away because some old fuck thinks economic policy from the Depression is the way to Make America Great Again.

[The Meal]

Tariffs are going to equalize the economy in a permanently worse situation. It just shows the world how bad Trump and the Republicans are at economics.

Economics?!? This isn't about economics. This is about creating an America filled with Republican-voting rubes on a permanent basis.

[RunningMn9]

It also took years for markets to bounce back from 2008. Though if you were contributing in those intervening years those contributions were at good discount.

My account was above Sep 2008 levels by August of 2009 (11 months). Part of that was because I got very defensive in Jan of 2008 when it was clear that the election cycle was going to talk down the economy for 11 months, and I reversed that course in April of 2009.

I also did the same thing on Jan 20 of this year, exiting all stock positions.

[LawBeefaroni]

Pretty sure we all knew this and mentioned it in one of.the threads but an in-depth explanation of the bad math here.

The formula used by the Trump administration to levy reciprocal tariffs contains a serious math error that over-inflates the impact by about a factor of four, economists at the American Enterprise Institute said.

[IceBear]

Well all his minions are on the news saying there won't be a recession and that after the markets bottom out they are going to boom like never before.

They are also saying 50 countries are calling to negotiate the tariffs...just like they wanted

[Drazzil]

I really don't think you guys are getting how bad this could get. It's not just the stonk market that's going to hit the skids. It's currency, finance, real estate... Everything.

Horrible deregulated bad economic policy got us here. Everything's a bubble. Our government has been subsidizing the ultra rich for decades, even before the bailout(s). That's created severe market distortions. Things could get apocalyptic.

[msduncan]

It also took years for markets to bounce back from 2008. Though if you were contributing in those intervening years those contributions were at good discount.

My account was above Sep 2008 levels by August of 2009 (11 months). Part of that was because I got very defensive in Jan of 2008 when it was clear that the election cycle was going to talk down the economy for 11 months, and I reversed that course in April of 2009.

I also did the same thing on Jan 20 of this year, exiting all stock positions.

At this moment I'm looking like a genius for giving my ex wife a big chunk of my 401k in exchange for keeping 100% of my pension.

[LordMortis]

I really don't think you guys are getting how bad this could get. It's not just the stonk market that's going to hit the skids. It's currency, finance, real estate... Everything.

Horrible deregulated bad economic policy got us here. Everything's a bubble. Our government has been subsidizing the ultra rich for decades, even before the bailout(s). That's created severe market distortions. Things could get apocalyptic.

What makes you think we get that it's more than the market? That it's employment. That it's inflation. That it's the USD globally being the exchange and value store of choice? That it's the flow of goods? That it's the US being the center for the exchange of ideas that advance standards of living? That it's human rights? That it's prevention of the spread of preventable disease and making more disease preventable? That it's the amount of people who have been forced into government subsidy that will be cut off... well technically not cut off just made impossible? That is voter suppression? As far as I know, everyone here knows it's all tied together. "The market", while my biggest concern (as other's is employment) is an expression of the economy, which is what this thread is about. You only have to go to the post above yours to see recession, the one above that to see tariffs/taxes/inflation, 8 above that to see abuses to child labor laws.

[WYBaugh]

Since 4/3 I've lost 60K. I'm hoping to retire this year so this bullshit isn't going to fly. Way to make america "great again" fucktard