Dumb Don has decided to force Americans to pay way more for what they buy and to live much worse as a result. In Don’s New Socialism, the job of government is to drive down the American standard of living. You gotta love that man!
Our New Socialist insists that we all pay monster import taxes so that we have less disposable income and smaller savings for retirement. Don believes that using taxes to choke off inexpensive imports, forcing us to pay more and live worse, will make America great. Again.
Here’s how Don’s New Socialism will work. Take your home. Now imagine, starting with your car, removing everything that is foreign-made, or has any foreign-made parts. Put these outside in the street.
If your home is less than 50 years old, that’s all the wiring, piping, appliances, hardware, electrical fixtures, flooring and furniture. If you live in a house, throw in all the framing (it’s Canadian and Don has labelled Canada a national security threat).
Now, add 25-50% to the price of everything you have placed in the street and ask how much of it you can afford to buy back and put in your home.
Isn’t Dumb Don’s New Socialism just wonderful? So clear thinking too. He says that the Economics Department at the University of Pennsylvania taught him this. He is, as he says, “a very stable genius.”
Can Dumb Don’s stable genius get worse? Yes it can!
Take a stroll through a Walmart or Target. Pick up anything, check the country that it’s made in. If it is made in China, India, Bangladesh, Thailand or Vietnam, which is just about everything you touch, ask yourself what you think it would cost to make this in the U.S. Three times the price? Four?
Already, Don has driven up the price of hot rolled steel 76% since he became our Hacksident. This is a staggering price shock to any business using steel. Start-ups are already complaining that they cannot get the parts they need to make their innovations work. VC investors are getting hammered. Great for next gen business for our kids!
Don doesn’t care. He just wants you to pay up. And call yourself a patriot for doing so.
The Dumb Dude’s New Socialism goes still further.
On September 9, 2018 at 9:49am, Dumb Don tweeted, “Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs.” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!"
So, Don insists that you buy an American-made Ford with all American-made parts at 4X the original price. In return, you don’t have to pay his 25% import tax on the original low price. Don’s intellectual incontinence is flowing full force. All over the place. What a mess!
Here’s the rub. It’s not just how much more you will have to pay for these high-priced Fords and Apples. It’s how long it will take for Americans to downgrade their production to make low-value components and subsystems that they long since subcontracted to others. And where will we get the labor to make them? We are running at full employment and Don won’t let U.S. companies import the labor they need.
Nonetheless, Don says, killing Apple’s supply chain will make it more efficient. Say again?
Don doesn’t understand that Apple’s supply chain management system is the seventh wonder of the world. Apple cribbed Walmart. As soon as the sales clerk in an Apple store swipes your credit card on an iPhone to check you out, Apple’s entire global supply chain instantly lights up—no paper, no purchase orders, no wasted time, no idle cash—to send a replacement product to the same store. Immediately. The result is an astonishing four days of sales in inventory.
These four days destroyed Nokia and Blackberry in cell phones. And soak up 95% of the profits in that business for only about 10% market share.
Apple’s success is based on using its global, single instance Information Management system to synchronize other people’s factories worldwide in real time in a way that minimizes Apple’s days of sales in inventory and eliminates cash wait states.
The benefit to Apple and its shareholders? $31 billion on its 2017 balance sheet. This mechanism is how Apple scaled from $5.9 billion in sales and chronic losses to $229 billion in sales and massive profits in only 20 years. And be the first in the world to hit the $1 trillion valuation mark.
In the Apple system, the flow of ever-cheaper information allows Apple to fine tune its balance sheet in real time. Sourcing is secondary. If Hon Hai factories in China fit Apple’s Information Management, they ship. That simple.
This process, invented by Walmart a quarter century ago, (Don didn’t notice Walmart. Neither did Sears, as it turns out.) is a revolution in financial management. It allowed Walmart to cross the $500 billion sales mark, making it the biggest company in the world and 43% bigger than the second ranked.
For Apple to carry the same load as its competition would, as we saw, cost it an extra $31 billion. So, Don wants Apple to load up on $31 billion? For Walmart, which Don should note, employs 2.3 million people, the comparable number is over $40 billion. Tim Cook! Doug McMillon! Apple and Walmart shareholders and employees! Do you have anything to say?!!
Don told Harley-Davidson that he is placing import taxes high enough on other nations that they will counter with taxes on Harley, forcing Harley to leave the country. Why would anyone who calls himself a businessman do something so dumb?
The problem, as always with Don (remember Publius' Learning to Count With Don Trump), is that Don either ran the numbers and didn’t care or didn’t run the numbers and didn’t care. Even if he did run the numbers, he has no way of figuring out what they mean. That’s how scrambled his brain is.
Every CEO in the country should be up in arms.
They should all say as loudly as possible, “Don, how about you stop selling Chinese products in your Trump National Golf Club pro shops and stick your members with 3-4X prices for American-made.”
Thank you, Don for confirming, loudly, what Publius demonstrated about your miserable business acumen nearly two years ago in Dumb Don and Walmart. You don’t have even the slightest idea of how to run a supply chain.
You specialized in using your Dad’s wealth to do tax-leveraged real estate deals. When that failed a quarter century ago, you moved to licensing his name.
While you were siphoning off our tax dollars, the real businesses in our country were moving into ever more high-value, information-intensive products and shifting off shore as much low value stuff as they could. This built America’s Ricardian comparative advantage.
You don’t just want to raise the prices that we pay. You want to drive us into low-value jobs that produce low-value products so that our income will drop like a stone. This is your “easy win.” You want us to have the lowest possible standard of living. You are, we can confirm, “a very stable genius.”
This is the New Socialism.
Enjoy.
Update, November 15, 2018
Great article by Jacob Schlesinger in the Wall Street Journal today shows that Dumb Don was as ill-informed about trade thirty years ago, before the information revolution conferred huge advantages on our companies, as he is today.
Schlesinger shows that Don never saw Walmart coming, never noticed it pass him by and cannot see it now in the far distance ahead of him. It's not just that Don is the most antibusiness president in the history of the Republic. It's that he doesn't understand the first thing about business. This is why he's so wedded to socialist policies like import taxes.
Once again, we must look to the University of Pennsylvania. How did it graduate someone with a Planck Length intellect? What really happened when Don was registered there?