It would appear that the US and Israel are taking new approaches and giving the international sisterhood of nudniks the boot.
In college, I took one year of introductory economics. The most important thing I learned from the course was that I did not want to become an economist. According to pure economic theory, the globalist approach is correct. Say you have two countries, one producing cotton cheaply and the other doing the same for wheat. Each country has expenses and difficulties growing the other country’s crop. The solution is international trade. The wheat people should just get their cotton from their friends and not bother making cotton themselves. On paper and in Economics 10 at Harvard, if a box of latex gloves costs $5 to consumers if made in China but $10 if made in the US, then Americans should get their gloves from China.
The problems we have seen from this approach are enormous. What happens when there are social, national security, or safety concerns that are not factored into that simple equation? In Lima, Ohio, the government keeps the only tank factory in the country running. There used to be in the day multiple factories making tanks, and in point of fact the US does not need more tanks. It does not export many, lose many or even use many. I believe that the factory primarily fixes or upgrades existing Abrams tanks used by the Army and Marines. The problem that the US faces is that if it closes this uneconomical factory, the United States of America will no longer have any tank production capability should the need arise for the same. So for the time being, the US is in the tank business, because national security demands the same.
And what of social security? Not the Social Security that pays out checks monthly. What about social security when we move a factory from Iowa to Oaxaca? On paper, the move is brilliant for stockholders and consumers: products will be made more cheaply, which means more sales and fatter profits. Who loses? Well, the obvious answer is the thousands of workers who for years toiled in Iowa for the same firm. When does a country decide that keeping production in Iowa is a social priority so as to have a healthy community of workers with good salaries and stable jobs? The US cannot command a company to stay someplace, but by using the tariff button, it can make the move to Mexico either uneconomical or actually more expensive. Donald Trump has pushed that red button, and one hears about American companies bringing production back home or even foreign companies like Rolls Royce saying that they will move part of their production to the US to beat the tariffs. The Trump administration claims to have lined up $6 trillion in promised investment in US production. That money would provide for a lot of workers.
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While my interest in unions has never gone far past who killed Jimmy Hoffa, I would wager that the unions will play an outsized role in whether Donald Trump’s tariff play pays off or not. I would imagine that the heads of the major unions are salivating at the prospect of many new factories and more importantly, many new dues-paying members. If Donald Trump, through sleight of economic hand, can move production from China, Vietnam, India, Canada and Mexico back to the US without enormous increases in prices for goods, then consumers will be happy and a manufacturing renaissance will be realized at home. But if products become ridiculously expensive solely because production is in the US, consumers will not be able to afford the new arrangement. Sure, Americans want others to have good jobs and also want an end to despair and fentanyl deaths. But if a US-produced iPhone costs $2,500 versus $1,000 when made by Foxconn in China, then the patriotism may be short-lived. Americans will pay a bit more for US-produced goods, but not way more. And that’s where unions come in. Their leaders had better read the room properly. The push to increase manufacturing in the US is not a green light for them to demand ever higher wages and benefits. The Trump program only works if the widgets made by $20/hour US workers are not that much more expensive for consumers than the widgets made by $3/day Chinese workers. Both management and unions must understand that bringing production home is not a get out of economics free card for US firms. Prices cannot go up that much; if they do, people will demand the old globalist approach, if only to have enough money to pay for what they need. And Democrats will make it their primary platform: no tariffs and production overseas for cheaper goods.
As to Israel, the country is plowing through Gaza like never before. It cut off the free food for Hamas weeks ago, and nobody is screaming that Israel is starving Gaza. Well, nobody who is normal. Thank God we don’t hear about casualties as Israel takes Rafah and blasts Hamas as well as Hezbollah, and Syria relentlessly. Apparently, Binyamin (Bibi) Netanyahu either stopped listening to the UN, Europeans, and other kibbitzers about protecting civilians and feeding an enemy population, or Donald Trump covered his ears. When Nixon made his famous trip to China, he was shown in a museum a pair of stones that an emperor of old would put over his ears so as not to hear bad news. Maybe Donald Trump sent Bibi a pair of such stones, and he is doing right by Israel and the IDF rather than by Hamas, the UN, UNRWA, and the EU. What a change in approach.
Though we as humans like to think about the needs of others, sometimes one has to look out for #1. Not out of greed or selfishness but rather out of a realization that if one does not take care of himself, nobody else will. For decades, the US faced stiff tariffs but did not reciprocate; for the length of the current conflict, Israel supplied food, water, electricity and fuel to Gaza, all while minimizing casualties in the local Jew-hating population. Something has snapped for both countries and the US is now rebuilding its manufacturing base while Israel is hitting Hamas and Hezbollah like she means it. And you know, in both cases, it’s about time.
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