As I write this, POTUS Donald Trump is pledging to begin tariffs on Mexico for its accused lack of assistance in the immigration crisis on the southern border of the US. Here is a quick news account from Politico:
The White House pledged on Thursday to charge ahead on tariffs on Mexico, saying the U.S. position “has not changed” after officials met for a second day to address the steady flow of Central American migrants trying to enter the United States.
Talks between Mexican and U.S. officials at the White House wrapped up without resolution. Several key officials in the administration were unavailable for negotiations. President Donald Trump was in France for the 75th anniversary of the D-Day invasion, and both Vice President Mike Pence and Secretary of State Mike Pompeo were on the road.
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The problem with growth in the US economy will be immediately be solved the day that we stop the trade war with China. We don’t need the Fed to counter-balance a political battle between China and the US. Mark my words, when this trade war is over, the economy will almost immediately overheat.
Also, you can guarantee that POTUS will turn off the trade war by the first quarter of 2020 so that the economy is running at top speed for the November election. The Chinese know this and they know they just have to hold on 6 more months and our political will for the trade war will vanish.
Source: High Interest Rates Are Hobbling Growth – WSJ
There’s an increasingly strong case that the Federal Reserve should cut interest rates to weaken the U.S. dollar and encourage greater exports—and that it should do it soon.
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Both halves of Congress are trying to create a more fair tax plan that will promote growth and simplify the code. I am skeptical that anything will get done though as it appears that this Congress is incapable of doing anything significant.
Since Congress will almost certainly fail, I thought I would put my suggestion on the table. As I analyze it, it is probably the most likely plan that I have ever seen to encourage employment growth.
The first step is to not change anything for individuals except to increase the amount of money saved in long-term savings without tax penalty. This should be doubled from its present rate. The government is in the retirement business, and it isn’t doing a sufficient job of managing it. The government needs to get out of the retirement business because the government can rarely do something well. Social Security is a broken plan, and we all know it – we just need to transition out of the retirement business slowly so that we do not screw up the American workers that depend on Social Security.
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Because foreign countries can import new U.S. drugs and price them however they see fit, many have largely checked out of the innovation business themselves. The U.S. produced 57% of the world’s new medicines between 2001 and 2010, up from less than a third in the 1970s, the Milken Institute reported in 2011.
The bottom line is that foreign countries freeload off American medical innovation, enjoying the fruits of U.S. ingenuity while forcing American consumers to shoulder a disproportionate share of the burden of funding research – effectively causing the American consumer to subsidize the pharmaceutical needs of foreign consumers.
President Trump says American companies have been getting “systematically ripped off” by foreign governments and firms. He’s right. Yet he has backed a proposal that would make the problem even worse—permitting Americans to buy prescription drugs from overseas retailers, a practice known as importation. This policy wouldn’t help American consumers much, but it would gut American pharmaceutical companies.
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Consumer preferences, reduced technology costs and government policies that increase labor costs are driving a trend toward automation in the restaurant business. If you make something more convenient and less expensive, it tends to catch on.
As recently as the 1960s, gas-station employees would rush to fill your car’s tank, wash the windows, check the oil and put air in the tires. Telephone operators made your long-distance calls and bank tellers cashed your checks. Those jobs now are either gone or greatly diminished.
Today, we reduce jobs whenever we shop on Amazon instead of our local retail outlet, use an Uber app rather than calling a cab dispatcher, order a pizza online, use an airport kiosk to print boarding passes, or scan groceries. Each of these changes in behavior has increased convenience and reduced labor costs—and competitive businesses pass the savings to their customers.
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