Trade deficit: snooze. Your paycheck: wut?
The swamp drainers in the White House are about to catch Americans who rely on exports for their livelihood off guard. They are considering a change in the way the U. S. trade deficit is calculated to make things like NAFTA look worse than they are. The idea is to eliminate “re-exports” (imports that are exported without any value-add) from the trade deficit calculation and, in effect, bolster the import numbers. Take a gander at this:
As the Trump administration is learning in spades, campaigning (holding self-aggrandizing rallies) is easy; governing is hard. Why? Because there are numbers involved. Statistics. Probability theory. Science!
As everyone knows, Trump has a problem with numbers:
- 3 to 5 million illegal voters
- Thousands in New Jersey cheering 911
- 1.5 million at the inauguration
- His penis size: “I guarantee you there’s no problem. I guarantee.”
- The wall: $4B (Sep. 2015); er, $7B (Nov. 2015); nope, $8B – wait, $12B (Feb. 2016); try again, $14B – no, $15B (Jan. 25, 2017); $22B (Feb. 2017).
- The unemployment rate is 42%, not 4.8%
- Cost of Trumpcare and tax reform: don’t worry about it.
As usually happens in politics, outrageously irresponsible budgeting is often justified by a too rosy GDP growth outlook. The Trump administration’s consideration of reclassifying re-exports is no exception. With any luck, however, wiser heads – like that of Janet L. Yellen, the Fed’s chairwoman – will prevail.
Case in point: unlike the #MAGA-maniacs, the Fed believes the current pace of job growth, a key economic indicator bolstered in part by Obama’s policies, is unsustainable and therefore unlikely to rise. As a result, paychecks – maybe even yours – will level off or even dwindle, and with them, federal tax revenue.
Not to worry: Trump’s economic advisors are on the job. Among them are hedge fund managers, bank executives, and even a cigarette manufacturer whose main role is probably to fuel the proverbial smoke-filled room. Here they are:
The group includes such stalwarts as Stephen M. Calk, who was sued by CitiMortgage for $4.5M in 2014 for fudging on asset reporting for a previously owned bank. Only one, David Malpass, has ever worked in the federal government.
Mr. Malpass, you’d better brush off your CV.
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