Cause and Effect

Scuttlebutt
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Anybody else notice that as soon as Cheeto jesus announces one of his moronic tariffs the stock market tanks bigly?

I mean, it’s a one-to-one effect. We’re not talking about a recession brought about by normal market forces. We’re talking, one day a tariff is announced and immediately the stock market tanks. A direct relationship. Not once but several times. No mistaking the pattern.

The next direct relationship to watch for: inflation. Foreign goods are now more expensive due to tariffs. We can expect a movement towards buying American goods. But American goods are more expensive to begin with. Result: more expensive prices for the consumer. Which is inflation.

Offsetting this could be a slowed-down economy. A recession directly triggered by a moronic trade war. Consumer confidence is already tanking. A situation with little inflation may follow because buying and building would slow. The only thing that would go up would be unemployment. Cause and effect.

Think of it as an economic experiment.

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That’s why he waited until after the market closed yesterday to announce them.

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These are the consequences of globalism. Most of the people on this forum are blessed with good jobs in a stable somewhat career, but many Americans have jack shit going for them. There are far fewer manufacturing jobs than there should be, meanwhile AI is coming for a lot of white collar jobs next. Freelancers and 1099 contractors are set to outnumber W2 employees in the near future. Those poor coal miners they they told to learn to code back in 2019.

Meanwhile companies are being pressed by shareholders to have exponential growth, which is why the markets are tanking when there is risk to their bottom line.

The form of late stage capitalism we are living in is not sustainable. We need to bring back some form of middle class job.

Choose your battle. Impose tariffs and tank the market in hopes of bringing some American manufacturing jobs back, or wait for the subprime chipotle loan bubble that Klarna is building to burst and tank the market. The people voted for this because Universal Basic Income was too scary.

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Manufacturing is NOT coming back to the USA in any appreciable amount and if it did no one could afford the prices for whatever they produced. The crypto shysters have gotten into the government now so the second scenario is likely. In the end the AI people from Silicon Valley and China will be running whatever is left to run. These tariffs are just speeding up the process.

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I hope you are wrong.

I know you don’t. But I do.

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In the end, what will there be left to run? Who will be able to afford the hundreds of subscription required to live a decent life? You can have every ounce of data on me, and sell it to advertisers, but how is anyone going to see an ROI if I have no money to buy what they are selling me?

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I don’t have anything against manufacturing coming back but I’m a realist and I have studied history. Most of the US GDP is already from the services sector and has been for many years. There are manufacturing jobs in the US but they are only or were only competitive because they had access to material produced outside the US where raw material or labor is cheaper. Once that access is cut off? Poof go the existing manufacturing jobs and forget new ones.

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I agree about 90% with Tengineer, we’ve been offshoring manufacturing for 30 years. When we closed the factories here, they didn’t just shut them down. They scrapped the machines/tools and knocked down the buildings and built condos. Those jobs aren’t coming back without major investment, it’s probably cheaper to build a new factory in Mexico and pay the tariff.

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This is what gets me: in my state of Washington there are far more jobs than workers. In my job I deal with vendors every day, everything from rigging suppliers to steel fabricators to marine electronics techs to marine carpenters. And the one restraint they have on their business is lack of labor.

I have a number of guys who own businesses we rely on saying that once they retire the business will go defunct because there are simply too many higher paying jobs for young people to take.

That’s a statewide problem.

So when I hear there aren’t enough jobs around I know it is either a localized problem or bullshit.

So how is a trade war going to solve the fundamental problem preventing expansion of industry? How is a trade war going to solve the problem of fewer workers when there is an opportunity to expand the economy?

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A bird in the hand is worth two in the bush. I’ve heard this as well, and as a result I spend a bit of time on business brokerage websites. What young person has the capital and risk tolerance to afford to take over? There was a successful marine spares business for sale, for 3.6 million dollars. If I was an engineer I’m sure I could have done a decent job of running the operation and growing the business, but that’s a shit ton of risk to take on. That’s a fair evaluation of the business, but of course it’s going to go belly up when no one who understands the trade can afford to take over.

I did see a pool service route that allegedly was cash flowing 97k for sale for 100k, but even with seller financing, I’m now a pool guy in a do or die situation.

Say I work some normie job making a decent living at 80k a year, either eating 100k in savings, or even seller financing, either way that’s a massive financial risk for a ~20% raise, where my income is directly related to my work. If I were making 80k, I probably couldn’t afford a 100k car, let alone a 3.6 million dollar yacht.

But it ties into this:

Seeing the finical pressures on buying a business, I know I certainly couldn’t pay a living wage either if I had to hire someone to help clean pools. Given I am currently just sitting on the beach, I’m lending my lady a hand in a job search. We’re consistently landing interviews, but more often than not their budget is half what she’s worth. We don’t live particularly lavish lifestyles, but neither of us can go below 80k if we were living by ourselves, who is going to take a job making 40? That’s why jobs aren’t being filled, I can probably come up with a dozen ways to make 40k that aren’t hot or laborious jobs in the maritime industry.

I’m not here saying it’s a good idea, but making it more economical to do things in the US by making it cost prohibitive to offshore seems to be the logic. And to be fair, we haven’t seen anything else work, as we are just frogs slowing being boiled, with stagnant wage growth, regular inflation increase, and SaaS becoming the standard operating procedure. Something has to happen, and I guess the people voted for this. It’s not like increasing tariffs was a surprise, It was really a campaign promise.

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Here are the jobs I’m talking about:
Our marine electronics tech company is a one-man show, down from two. The best in the business, hands down. The owner/operator would like to take on an apprentice. Can’t be found. There’s not much overhead to being a marine electronics guy. You make your money on your skill. But apprentices can’t be found. By the way, the guy makes so much money off us he only invoices us twice a year. (Most vendors invoice us every week. Many of them same day. Our MET guy makes so much he can’t be bothered).

It is hard to find welders in general, let alone marine welders, who are a special breed. The building trades snap up regular welders. All the major cities in Washington are boom towns, with constant new building going on, paying top dollar.

Our rigging vendor also makes custom tarps for us, etc. He would like to grow the business. He is in Seattle but has the Golden Gate Bridge authority in CA as a customer. In other words, no shortage of work. But he can’t grow any faster because of the lack of labor. Mainly, industrial sewing machine ops. The owner took over from the guy who had been running the business for ages. I know the former owner pretty well. He’d been trying to sell the business for years. No takers. It’s a manufacturing business with a book of customers. But there were too many other businesses out there that are more lucrative.

We use a lot of cargo blocks on out boats. We rebuild most of them ourselves. But at a certain point you need an expert to do some work. The expert used to be in Seattle. He retired three years ago and had no apprentice. So, we now ship the blocks to a logging town 60 miles away. Loggers use the same blocks as we do. But now that vendor is telling us the same thing. He is retiring. He would have loved to have an apprentice. Could have doubled his work, which is very well-paid. I cringe as I sign the invoices. But there are other well-paid jobs out there. So, now we’re going to have to ship the blocks to rural Oregon.

The number of young workers is shrinking as a historical percentage of the work force. At the same time, in states like Washington at least, the economy has been booming.

Now, people want to shift more overseas manufacturing back the USA. What is manufacturing? A lot of it is putting heads on Barbie dolls. My dad had a factory job putting Spring #D in Hole #4, eight hours a day, five days a week. He hated it. Nor did he make a lot of money doing it.

So, if those jobs come to the USA, are we saying young people are going to leap to take those low satisfaction jobs, low pay jobs, when I’ve just described how better paying jobs are going unfilled?

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Other campaign promises:
Higher stock market.
Bigger 401ks.
Lower inflation.

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And we’re going to have so much money we won’t know what to do with it…

But he didn’t really mean us, eh..

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Anyone who believes manufacturing is coming back is really ignorant of how manufacturing works. It takes YEARS to developed the skilled labor necessary to manufacture most products. When the US began moving manufacturing overseas, it was a 15-20 year process. Now, the skills required are simply not here.
Unfortunately, our business leaders and politicians lack the ability to stick to any sort of long term plan. China does not plan for 2-4 years out, they see things in decades.

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I have often thought the markets are like Nursey in Blackadder; the slightest bit of excitement and she throws her apron over head and wets herself.

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There is a ingenious plan behind the madness; fire government workers and bureaucrats by the thousands.

This free up a large pool of worker to fill the jobs being created by the other ingenious plan; imposing tariffs on imports to force manufacturing back to the US.

What can go wrong?? Tariffs put money into the US economy, paid for by dumb foreigners that still buy US agricultural products, oil and gas without retaliating.

IT IS INGENIOUS,!!!
Only a steady genius could come up with something so smart. :clap: :person_bowing:

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New Zealand is fortunate enough to have tariffs of only 10% imposed on top of the 4% that we paid before. New Zealand imposes a tariff of 1.8% on US imports, an amount that covers the paperwork of Customs and Excise. Not to be confused with the excise tax charged on all alcohol products regardless of being produced in NZ or elsewhere.
What it means to our friends in the USA is for those who enjoy a glass of New Zealand Sauvignon Blanc it will cost you $1.00 more. At the other end of fine dining a Big Mac will go up in price due to the increase in the price of ground beef.
Globally China hit with a 75% tariff will see their economy contract and they in turn will buy less from us.
I have looked for the silver lining but it is elusive.

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Plastic straws are back, my friend. Plastic straws!!! :star_struck:

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Whoops.

My 401k that was a 200.5k is now a 100.25k.

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Invest in plastic straws and Teslas and watch the profits grow!