Any left-leaning president can pick economic winners and losers. Next-level MAGA is making the winners and losers the same people, bailing out farmers from the pain of a trade war instigated by the administration itself.
I repeat my point from a few days ago: If we’re going to do taxpayer-funded welfare for American industries, it would be more efficient to cancel the trade war *and* the Trump tax cuts. Raise taxes, then give Trump the extra revenue and let him hand it out like fat envelopes on Christmas to his favorite industries. He can call it “Trump Bucks,” whatever he likes. The current way is too complicated. Rather than suffering chaos at the store as tariffs and counter-tariffs raise the price of goods, and rather than having U.S. industries tank as they lose foreign business and then get propped up with emergency federal subsidies, we could simplify things by each of us handing a check to the IRS instead. If we’re going to be squeezed in the name of “economic patriotism,” at least streamline the process.
I wonder what all the fiscally-conservative Republican heroes in Congress who got elected as “tea partiers” will do once they get wind of this. Bailouts, tariffs, federal favoritism towards certain industries — Trump will be lucky he isn’t impeached by dinnertime. Assuming any of them meant a word they said between 2009 and 2016, I mean.
The aid package is expected to target soybean farmers, dairy farmers, and pork producers, among others. White House officials hope it will quiet some of the unease from farm groups, but the new plan could revive debates about taxpayer-funded bailouts and the degree to which Trump’s trade strategy is leading to unforeseen costs…
The funds will come through direct assistance, a food purchase and distribution program, and a trade promotion program…
A number of White House officials, who have been apprehensive about Trump’s use of tariffs, had hoped that other countries would quickly offer concessions before things escalated further. But conservative critics of the White House’s approach said on Tuesday that Trump’s move to offer rescue funds to farmers suggests the standoff with other countries won’t end soon.
Here’s the map of top soybean-producing states, in case you’re wondering why the GOP would be nervous about farms failing three months out from a midterm. WaPo notes elsewhere today that, by one estimate, 65 percent of American employees hurt by tariffs come from counties won by Trump two years ago. By and large he’s blowing up his own people over this, all in the belief that short-term pain will produce long-term victory when China and other trade partners inevitably cave to American demands. Imagine, though, that you were a Chinese official sitting across the table from American negotiators, knowing that a U.S. election is bearing down and Trump’s already starting to sweat the trade war enough to begin cutting checks to farmers. Would that make you more or less inclined to dig in and ramp up the pressure?
Trump buddy Rand Paul, who’s spent the past 10 days defending the gladhanding of Putin and nudging POTUS to yank John Brennan’s security clearance, finds that there *is* a White House policy he can’t bring himself to endorse. He’s hit upon a crazy alternative to industrial bailouts:
Tariffs are taxes that punish American consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs.
— Senator Rand Paul (@RandPaul) July 24, 2018
Ben Sasse, another actual fiscal conservative, added in his own statement today that “tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.” Pretty close: WaPo notes that the program Trump is using for the emergency farm bailout is the Commodity Credit Corporation, created in 1933 to help boost the economy during the Depression. The CCC is already empowered by statute to borrow $30 billion from Treasury, which means Trump can hand this money out without further congressional authorization. The momentous follow-up question is what happens if the trade war deepens by October and the White House wants another cash infusion for struggling industries — and there isn’t enough left in the CCC to cover it this time. Will the “small-government” GOP sign off on a larger bailout fueled by Trump’s protectionism, with Election Day looming?
Survey says … of course they will. These people won’t defy him even on minor matters for fear of enraging his base. Do you think they’re going to go to war with MAGAnomics knowing how it might affect midterm turnout? And once they cave on the next bailout, they’ll need to cave on others. It’ll never be a “good time” to say no to agricultural welfare when a president from their own party has created the conditions necessitating that welfare. They’re picking up the tab until the trade war is over, like it or not. At best there’ll be cuts to other parts of the budget to “fund” the trade-war subsidies. It may be the starkest demonstration yet of how fraudulent the whole “tea party” era was.
Elsewhere in tariff news, Harley-Davidson — another midwestern business — acknowledged today that the trade war could cost it somewhere from $90-100 million every year as long as it persists. Here’s your exit quotation, which floated across the Twittersphere early this morning, hours before the farm bailout was announced. It seemed weird at the time but appears less so now: Obviously POTUS knew the announcement was coming and wanted to emphasize his confidence in his own course of action before all the grumbling began.
Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
— Donald J. Trump (@realDonaldTrump) July 24, 2018