by | BLOG
President Trump continues to pursue his misguided tariff crusade believing that he is somehow protecting American industries and employment. His latest move, reciprocal tariffs (which he intends to begin April 2), is even worse. Trump has stated that he plans to impose tariffs based on “what they charge us, we charge them,” which is an economically stupid idea. Advocates of this policy like to argue that it’s based on fairness, but it certainly is anything but that.
From a practical standpoint, the United States trades with around 200 countries covering about 13,000 items. Is Trump really going to go head-to-head on this many goods? Just the onerous price adjustment and management of it all on a continuous basis will add to the bureaucratic nightmare that Trump says he wishes to avoid.
Furthermore, if Trump cares about America first, he should forget the concept of reciprocal tax policy. Otherwise, by imposing tariffs based on what other countries charge us, he’s letting other nations set our rates. This would not be looking out for America’s best interest; it’s a game of tit-for-tat — with other nations leading it!
Likewise, Trump is completely tone-deaf on how reciprocal tariffs would impact the average consumer. With tariffs already raising the cost of imported goods, reciprocal tariffs can escalate markets into a trade war. Not only will this continue to drive up prices, but it can also disrupt international trade and global supply chains. With the price of goods artificially raised in such a retaliatory relationship, Americans and American businesses will be less able to get the goods they need at the lowest cost.
While Trump sees reciprocal tariffs as a means to leverage negotiations with other countries, he’s not interested in encouraging fair-trade practices or diversifying trade relationships. He engaged in a type of political signaling that looks more like economic strong-arming, except that Trump doesn’t understand the long-term economic harm reciprocal tariffs create. Whatever short-term political gain Trump thinks he is creating for this country (or himself) will only burden American consumers with higher prices and economic instability in the long run.
by | BLOG
Back in 2019, Donald Trump put his stamp on the USMCA, the rebooted version of NAFTA. He touted it as a win, a deal shaped by his own demands—especially on trade rules and tariffs. Fast forward to now, and he’s slapping unilateral tariffs on whoever he feels like, thumbing his nose at the very agreement he pushed through. This isn’t just a flip-flop; it’s a gut punch to the spirit and letter of the USMCA, a law he insisted on crafting and once called “the best agreement we’ve ever made” in 2020.
As a longtime tax professional, I’ve seen plenty of government overreach, but this takes the cake. The USMCA was supposed to lock in predictable trade terms—terms Trump himself wanted. Now he’s treating it like a suggestion, not a law. Imagine running a business or a country and signing a deal with someone who’ll ditch it the second it doesn’t suit him. Who’d trust that? It’s not just bad faith; it’s a neon sign screaming that rules only matter until the rule-maker gets bored.
This isn’t about left or right—it’s about consistency and liberty. If you champion individual freedom, you don’t get to shred contracts and impose your will by fiat. That’s the kind of centralized power grab Ayn Rand warned us about, the kind I’ve spent years calling out in tax policy. Trump’s tariffs aren’t just economic meddling; they’re a betrayal of the principles he claimed to stand for.
And here’s the kicker: this isn’t even clever enough to hide. It’s blatant, sloppy, and reeks of the same arrogance that fuels bloated bureaucracies and tax codes designed to choke out the little guy. Government loves to rig the game—promising fairness while picking winners behind closed doors. Trump’s tariff stunt is that game in overdrive: make a rule, break a rule, and leave everyone else scrambling.
The numbers paint a stark picture of the potential impact, though the timeline has shifted. Trump initially announced a 25% tariff on goods imported from Canada and Mexico, However, the administration subsequently decided to delay implementation of these tariffs until April. When enacted, they are expected to affect about half of goods from Mexico and more than one-third from Canada. Economists warn this could significantly impact American consumers, potentially raising the cost of North American-made vehicles by $4,000 to $10,000.
The USMCA has shown its worth, with 25 labor complaints filed under its Rapid Response Labor Mechanism from May 2021 to June 2024, resulting in 21 prompt resolutions that improved wages and working conditions for Mexican workers. Now, all of this progress hangs in the balance due to one man’s capricious decision-making. It’s not strength—it’s the tantrum of a guy who thinks he’s above the system he swore to uphold. That’s not a leader. That’s a liability.
by | BLOG
Albert Einstein said, ”Insanity is doing the same thing over and over again and expecting different results.” By that definition, Donald Trump’s tariff policy is pure madness. He’s slapping 25% tariffs on Canada and Mexico, 20% on China—despite history’s clear warning that protectionism backfires. Every time tariffs have been tried, they’ve led to economic pain, yet Trump barrels ahead as if this time will be different. Experts warn of a 0.3% drop in GDP, an extra $800 in costs per household, and a housing crisis as Canadian lumber tariffs near 40%. This isn’t a bold strategy—it’s a self-inflicted wound, disguised as patriotism but destined to hurt American businesses and consumers alike.
Tariffs might sound like they help American businesses, but they only and always do the opposite. History is full of examples—like the disastrous Smoot-Hawley Tariff during the Great Depression—that show tariffs slow down economic growth, raise prices, and hurt consumers. Now, big banks like JPMorgan estimate a 40% chance of recession, largely because businesses are too uncertain to invest. Half of what the U.S. imports helps manufacturers make products, so raising prices on steel and lumber doesn’t protect them—it weakens them. In reality, these tariffs are less about helping American workers and more about protecting politically connected industries.
The way Trump is handling tariffs isn’t helping either. His policies seem random—one day, Canadian steel faces a 25% tariff; the next, it gets removed after Canada makes a small change. This unpredictability erodes business confidence, making it impossible for companies to plan ahead.” Strong economies rely on stability, not last-minute decisions that change every week. If companies don’t know what rules will apply tomorrow, they’ll hold back on investing or expanding, which slows down the economy even more.
Consider Canadian lumber, which supplies 70% of the U.S. market. With tariffs now approaching 40%, homebuilders—already struggling with labor shortages—face billions in extra costs. That means fewer homes get built, prices go up, and the housing crisis gets worse. The same goes for steel and aluminum tariffs. Car factories, solar companies, and appliance makers all have to pay more for materials, which means higher prices for consumers or, even worse, factory closures and job losses. This isn’t “winning”—it’s economic suicide. If it really made sense to produce these materials in the U.S. at competitive prices, companies would already be doing it without the government’s interference.
Countries do not trade. Only businesses and people do. Every trade is one business or individual electing to voluntarily transact with another individual or business. Tariffs interfere by deciding who can trade with whom, usually to benefit powerful industries. Free markets work best when businesses compete fairly, not when the government picks winners and losers. Some Trump supporters argue that these tariffs are meant to challenge China or strengthen the U.S. economy, but the messy execution proves otherwise. If American industries are going to succeed, they need a stable and predictable system—not sudden, punishing policies that make it harder to compete globally.
Until Trump abandons his tariff obsession and lets the market function, he’s not protecting American workers—he’s punishing them. History has proven that tariffs weaken economies, stifle competition, and raise prices. Yet here we are again, watching him again try the same flawed policies and expecting a different outcome. If Einstein was right, then Trump’s approach isn’t just bad economics—it’s madness.
by | BLOG
How can protectionists like Trump and his allies not understand that tariffs are destructive? A tariff is basically a tax on imports. It is championed as a means to boost domestic production and government revenue, but this is far from economic reality. Tariffs clearly and consistently hurt the consumer and taxpayer by driving costs up to everybody in amounts far in excess of any short-term benefits.
Tariffs further add to inflation and put American companies at a disadvantage because foreign countries can (and do) retaliate by putting their own tariffs on our exports. This slows manufacturing growth (the cost of their inputs go up), increases prices, and makes the economy more sluggish. On the other hand, free trade creates better choices for consumers and more global opportunities for American companies, resulting in lower costs and an expanded job market.
Even media outlets like the NY Post and Fox News are still parroting the mantra that even though tariffs are bad, they could have long term benefits. These benefits are supposed to be because they will achieve an overall reduction of foreign tariffs against the US, which will allow US companies to make more profits. Though this sounds like it may be right, there has never been any evidence that this is the case (the most logical reason being that because the US economy is so much stronger than other economies, there may be some real economic rationale that tariffs should not be reciprocal).
To suggest a tariff is a pro-growth economic policy is utterly ridiculous. Tariffs don’t strengthen American manufacturers; they are cronyism of the highest order. Protectionists are economically ignorant, and tariffs have proven yet again to be disastrous for our economy.
by | BLOG
Back in 2010, Thomas Sowell penned a fantastic essay over at the Jewish World Review shortly before the mid-term elections that year. Sowell reminded us of the disastrous effects of government intervention into the economy during the Great Depression–-a situation that is arguably being paralleled again today. I wanted to share his wisdom as some food-for-thought for those who think the government get more involved in trying to fix the economy.
Brass Oldies: Part II
“Songs that are “golden oldies” have much less pleasant counterparts in politics– namely, ideas and policies that have failed disastrously in the past but still keep coming back to be advocated and imposed by government. Some people may think these ideas are as good as gold, but brass has often been mistaken for gold by people who don’t look closely enough.
One of these brass oldies is the idea that the government can and must reduce unemployment by “creating jobs.” Some people point to the history of the Great Depression of the 1930s, when unemployment peaked at 25 percent, as proof that the government cannot simply stand by and do nothing when so many millions of people are out of work.
If we are going to look back at history, we need to make sure the history we look at is accurate. First of all, unemployment never hit 25 percent until after– repeat, AFTER– the federal government intervened in the economy.
What was unemployment like when the federal government first intervened in the economy after the stock market crash of 1929? It was 6.3 percent when that first intervention took place in June 1930– down from a peak of 9 percent in December 1929, two months after the stock market crash.
Unemployment never hit double digits in any of the 12 months following the stock market crash of 1929. But it hit double digits within 6 months after government intervention– and unemployment stayed in double digits for the entire remainder of the decade, as the government went in for one intervention after another.
The first federal intervention in June 1930 was the passage of the Smoot-Hawley tariffs by a Democratic Congress, a bill signed into law by Republican President Herbert Hoover. It was “bipartisan”– but bipartisan nonsense is still nonsense and a bipartisan disaster is still a disaster.
The idea behind these higher tariffs was that reducing our imports of foreign goods would create more jobs for American workers. It sounds plausible, but more than a thousand economists took out newspaper ads, warning that these tariffs would be counterproductive.
That was because other countries would retaliate with their own import restrictions, reducing American exports, thereby destroying American jobs. That is exactly what happened. But there are still people today who repeat the brass oldie that restricting imports will save American jobs.
You can always save particular jobs in a particular industry with import restrictions. But you lose other jobs in other industries, not only because other countries retaliate, but also because of the economic repercussions at home.
You can save jobs in the American sugar industry by restricting imports of foreign sugar. But that results in higher sugar prices within the United States, leading to higher costs for American candy producers, as well as American producers of other products containing sugar. That leads to higher prices for those products, which in turn means lower sales at home and abroad– and therefore fewer jobs in those industries.
A study concluded that there were three times as many jobs lost in the confection industry as were saved in the sugar industry. Restrictions on steel imports likewise led to an estimated 5,000 jobs being saved in the steel industry– and 26,000 jobs being lost in industries producing products made of steel.
Similarly, the whole idea of the government itself “creating jobs” is based on regarding the particular jobs created by government as being a net increase in the total number of jobs in the economy. But, since the government does not create wealth to pay for these jobs, but only transfers wealth from the private sector, that leaves less wealth for private employers to create jobs.
Songs that are golden oldies bring enjoyment when they return. But brass oldies in politics just repeat the original disasters.
A statistical analysis by economists, published in 2004, concluded that federal interventions had prolonged the Great Depression of the 1930s by several years. How long will future research show that current government interventions prolonged the economic crisis we are living through now?”
by | BLOG
The BBC is one of the largest media organizations in the world, reaching hundreds of millions of readers per week. However, their articles covering the Israel-Hamas war have contained blatant violations of honest reporting as well as their own editorial guidelines. These are not isolated incidents; abuses have occurred over 1,500 times in their coverage of the Israel-Hamas war.
Research conducted by lawyer Trevor Asserson found substantial evidence of bias against Israel, including a tendency to associate Israel with genocide – despite the fact that Israel has never by word or deed, expressed any intention of eliminating Palestine or its people, and Hamas has expressed openly and consistently their desire to eliminate Israel and its Jews from the face of the Earth (genocide). The report also raises concerns about BBC Arabic’s coverage, noting instances where journalists reportedly showed support for Hamas.
In response, the BBC questioned the report’s methodology, particularly the use of AI for analysis. However, dismissing the report based on AI is disingenuous, since they don’t contest the validity of the findings. AI is a powerful tool for analyzing large volumes of text efficiently and objectively, enabling researchers to identify patterns and biases that might be missed by human reviewers. Its application does not undermine the report; instead, it enhances the analysis by providing a comprehensive view of the content. Additionally, the research was conducted by a team of legal experts and data scientists, meaning that AI analysis complemented, rather than replaced, human oversight and contextual understanding.
The BBC’s insistence on questioning the methodology is clearly just a smokescreen since they don’t even deny the bias and shoddiness of their reporting. Historical evidence shows that media outlets can exhibit bias, and previous studies validate the effectiveness of AI tools in uncovering such biases across various contexts. As a public service broadcaster, the BBC has a responsibility to uphold transparency and accountability. Given these findings, there are serious questions about its suitability for continued public funding.
by | BLOG
People laughed at Amazon’s Alexa when it was discovered that asking a question regarding Kamala Harris would give you a good positive answer, but asking about Trump would give you a negative answer. We were told that this was corrected, and in fact, if such questions are asked now, Alexa will simply reply that she cannot respond to questions of a political nature.
But what constitutes a political question? I decided to find out. So I asked Alexa to tell me about Kamala Harris‘s tax policy. She responded that she found the following information from a website. Alexa then proceeded for at least 2 1/2 minutes extolling the wonderful virtues of Kamala Harris‘s tax policy — except that it was blatantly partisan garbage and factually incorrect. For example, Alexa described how Harris strongly believed that lower capital gains rates are needed for economic growth. Therefore, she is proposing to reduce the capital gains rate from Biden’s proposal of nearly 50% to a mere 28%. But this is an utter lie! The Capital gains rate is currently 20% and has been since the Obama Administration. Harris’s proposal actually raises the capital gains rate to 33%, despite the fact that she knows it will hurt economic growth.
I then asked Alexa to tell me about Donald Trump’s tax policy. Alexa simply replied, “sorry I don’t have any information about that.” Nevermind the fact that he was a US President for four years and has been a candidate for President for two election cycles!
It is clear that Amazon is disingenuously building partisan politics into its Alexa app, despite its protestations that it is not doing so.
by | BLOG
Kamala Harris has just proposed a reduction in the capital gains rate increase that had been included in the Biden-Harris tax proposal. The reduction was from Biden’s 43.4% proposed rate to a 33% rate, both of which are ludicrous from an economic perspective. (Note that even the 33% rate is a 40% increase from the present rate of 23.8%!). A capital gain rate that high would severely inhibit people from selling assets at a gain. This would actually reduce the amount of revenue to be raised from this tax. Furthermore, the effect of higher taxes slows the economy because those paying the higher capital gains have less money to invest.
Back in 2008 when Obama was debating Hillary Clinton on national TV, Obama discussed with the moderator how raising the capital gains rate would likely reduce federal revenue collections, but he insisted it was good policy anyway — because it was a policy of “fairness”. Yes, knowledgeable people laughed at this, since fairness would actually have required a lower tax rate, and decreasing revenue by increasing taxes couldn’t be more stupid. And as Economics 101 would dictate, we actually experienced a sluggish economy after Obama raised the capital gains rate from 15%-20% (and then tacked on the 3.8% Net Investment Income Tax).
I wouldn’t expect Kamala Harris, who is basically clueless on matters of taxes and economics, to have been aware of this. But one would think that her advisers would be.
It should also be noted that the capital gains rate, even at 33%% understates the actual tax burden. That’s because capital gains taxes on individuals is actually a second tax, this income having already been taxed at the corporate level. The effective tax rate is therefore in excess of 40%, and this doesn’t even include state taxes. The astoundingly negative effect of this tax increase on economic wealth can’t be overestimated.
The only saving grace is that this proposal is so economically counterproductive and stupid that it’s not likely to get any traction in Congress; Biden has been trying unsuccessfully to raise capital gains for years. It looks like we have another candidate who puts forth an initiative that she knows has very little chance of realization, but chooses to do so anyway so she can characterize the Republicans as protecting the wealthy while she can claim to protect the middle class.
by | BLOG
The International Longshore and Warehouse Union (ILWU) and the International Longshoremen’s Association (ILA) have amassed ridiculous levels of control over U.S. ports, leveraging their historical influence, and union monopoly power to dominate port operations nationwide.
One of the most glaring issues with the ILWU and ILA’s monopolistic grip on U.S. ports is the staggering compensation packages their members receive, which are wildly disproportionate to the work performed. Longshore workers, particularly on the West Coast, often earn six-figure salaries, with some senior members making well over $200,000 annually, along with massive benefit and pension plans. This level of compensation, secured through the unions’ ability to shut down entire ports during negotiations, places a significant financial burden on port operations, driving up costs for businesses and consumers alike. The inflated pay and benefits, which far exceed those of comparable jobs in other sectors, are a direct result of the unions’ monopolistic control, creating an unsustainable system that prioritizes union interests over economic efficiency.
Another significant and damaging way the ILWU and ILA maintain their grip on U.S. ports is through their fierce opposition to automation. Despite the clear benefits of increased efficiency, lower costs, and improved global competitiveness, these unions staunchly oppose automation, because it weakens their power (Wikipedia) (APM Research Lab). As a result, U.S. ports are significantly behind their global counterparts in adopting advanced technologies, leading to massive disruptions that affect the entire economy. The unions’ resistance to modernization highlights a deeper issue: when union monopolistic power is left unchecked, it can bring progress grinding to a halt and hold entire industries back from necessary evolution.
If the U.S. wants to maintain its position as a global economic leader, it must address the stranglehold that the ILWU and ILA have on our ports. This is about ensuring that our ports can operate efficiently, compete on a global scale, and keep costs down for American consumers and businesses. We need immediate action to break the union monopoly, modernize port operations, and embrace automation. Policymakers must step in to introduce reforms that will bring balance to labor negotiations, promote technological advancement, and prevent unions from holding the entire economy hostage. America’s place in the global economy depends on it.
by | BLOG
People have been asking about the reasons for the recent stock market decline. But the real question is: why has there been this run up recently in the first place?
The Biden-Harris administration has benefitted from the situation that since before the pandemic, job openings in the US have far exceeded the total number of unemployed people. Markets have been buoyed by the fact that as people lost their jobs, they were able to replace them with those that had been previously unfillable. In addition, Artificial Intelligence (AI) has been giving a significant additional boost to the economy.
For these reasons, the terrible Biden-Harris economic policies have been pushed into the background, which include:
1) severely increased regulation — including restrictions on mergers and acquisitions, SEC burdens, NLRB restrictive labor policies, etc.; 2) substantial tariffs; 3) threats of, and implementation of, higher taxes; and 4) legislation directing the use of wasteful and inefficient green energy policies
But they could only be lucky for so long. Now that the excess jobs in the economy have mostly been filled, leading to increasing unemployment rates and weakening of the GDP, the terrible Biden-Harris economic policies are beginning to be felt. And there is no end in sight. Should Kamala Harris win the election in November, and these policies continue, I believe there could be a severe recession. The market realizes that there is no reason for companies to invest, and prospects for the future have turned quite gloomy.
Even with Trump winning in November, unless he is able to materially reduce regulation, keep taxes low, and avoid his debilitating tariffs, there could still be a recession ahead.
The lesson we have learned is clear: high regulation, along with the threat of higher taxes, can only be severely detrimental to the economy.
