Tariffs and the middle class

[usernameDawg]

I have posted a lot today. I bought in to Lighthizer’s tariffs because it promises to boost the middle class. To me, that is crucial because a strong middle class is what drives an economy. It is not just capital and credit, somebody has to buy the products.

The poor have numbers, but not the discretionary income to drive an economy. The rich have discretionary income, but most of their wealth is capital and is not used to purchase goods.

I have not been super pleased with implementation, so I give you that. But if we were to scrap the tariff idea altogether, what would you do to address my concerns over the hallowed out middle class?

You can crap on the early results, but what do you propose in its place?

 

[The Original SLC Dawg]

Bring back manufacturing jobs that have gone overseas.

 

[willdup]

I have posted a lot today. I bought in to Lighthizer’s tariffs because it promises to boost the middle class. To me, that is crucial because a strong middle class is what drives an economy. It is not just capital and credit, somebody has to buy the products.

The poor have numbers, but not the discretionary income to drive an economy. The rich have discretionary income, but most of their wealth is capital and is not used to purchase goods.

I have not been super pleased with implementation, so I give you that. But if we were to scrap the tariff idea altogether, what would you do to address my concerns over the hallowed out middle class?

You can crap on the early results, but what do you propose in its place?

The issue is foundational to the structure of our economy and the fact that our tax system has been transformed over time to favor the wealthy.

From 1948 to approximately the late ‘70s, the growth in average income tracked very closely to the growth of GDP. Simple, right? Everyone benefitted proportionally from economic growth. But beginning in the early eighties, a greater proportion of ongoing economic growth ended up in benefitting an ever smaller group at the top of our economic pyramid.

The current concentration of wealth at the top 1% is higher than it has been since the Gilded Age in the late 1800s. That same 1% owns more wealth than the entire middle class. This is not healthy or sustainable.

Of course, Citizens United allowed the acceleration of the governmental tipping of the scales in favor of the ultra-wealthy. If you think Elon Musk and all of the other billionaires in Trump’s cabinet have your best interest at heart, you are delusional.

Tariffs are a tax, and the greater percentage of your income you spend on goods and services (the middle and lower classes) the greater the proportional tax burden falls on you. It’s a regressive tax, full stop. While Trump proposes more tax breaks for the wealthy.

I’m all for selectively moving more production back to the US, but alone it’s not a path back to improved wealth for the middle class and it’s going to increase overall costs for consumers. Moving garment factories from Vietnam to the US isn’t going to help anyone.

Look at overall tax rates (including capital gains) through the 1948-1976 timeframe compared to 1976-2023. The numbers don’t lie.

According to this report, had incomes continued to track overall GDP growth, the bottom 90% of earners would have earned an additional $2.5t in income that instead went to the top 10%.

https://www.rand.org/pubs/working_papers/WRA516-2.html

 

[MaitlandFloridaDawg]

I have posted a lot today. I bought in to Lighthizer’s tariffs because it promises to boost the middle class. To me, that is crucial because a strong middle class is what drives an economy. It is not just capital and credit, somebody has to buy the products.

The poor have numbers, but not the discretionary income to drive an economy. The rich have discretionary income, but most of their wealth is capital and is not used to purchase goods.

I have not been super pleased with implementation, so I give you that. But if we were to scrap the tariff idea altogether, what would you do to address my concerns over the hallowed out middle class?

You can crap on the early results, but what do you propose in its place?

What do you mean by hollowed out middle class? Why do you think tariff’s will improve the middle class? I would argue that tariffs are a lose - lose for everyone. I’m not sure why we would want to implement Herbert Hoover style trade policies. It didn’t work 95 years ago and took a world war to recover from the mess. I guess it has been long enough to forget history.

 

[WyoDawg307]

Solid take here, imo.
https://quoththeraven.substack.com/p/your-discomfort-means-its-working

"Trump’s tariff agenda scratches to a halt the record of complacency that’s been playing over the sound system of the United States for the last 50 years. It sends a signal to the world that things aren’t OK the way they’re going and, more importantly, it makes the decision to proactively arrest the problem in its tracks before it reaches a terminus on its own. If the country got into such a precarious position that we had to react to the problem instead of being proactive, we would lose any and all leverage we’d have to make deals to try to recalibrate our position"

 

[willdup]

Solid take here, imo.
https://quoththeraven.substack.com/p/your-discomfort-means-its-working

"Trump’s tariff agenda scratches to a halt the record of complacency that’s been playing over the sound system of the United States for the last 50 years. It sends a signal to the world that things aren’t OK the way they’re going and, more importantly, it makes the decision to proactively arrest the problem in its tracks before it reaches a terminus on its own. If the country got into such a precarious position that we had to react to the problem instead of being proactive, we would lose any and all leverage we’d have to make deals to try to recalibrate our position"

The article makes several flawed arguments that deserve scrutiny:

1. False equivalence between discomfort and effectiveness: The central premise that "discomfort means it's working" is logically unsound. Pain is not inherently productive - chemotherapy causes discomfort because it's fighting cancer, but a broken leg causes pain because something is damaged. Market disruption could equally signal policy failure as success.
2. Oversimplification of manufacturing decline: The article portrays a simplistic narrative where jobs simply "left" America, ignoring the complex reality that manufacturing output in America actually increased while jobs decreased primarily due to automation, not just outsourcing. Tariffs cannot reverse technological progress.
3. Cherry-picked evidence: Using abandoned factories as evidence while ignoring the creation of new industries presents an incomplete picture. Many former manufacturing towns have successfully transitioned to other economic activities.
4. Misrepresentation of economic interdependence: The article frames global trade as dependence on "adversaries," ignoring that economic interdependence is mutual and has historically reduced conflict. China is equally dependent on American markets.
5. Contradiction on timeframes: The article criticizes "nearsightedness" in policy-making while simultaneously dismissing market concerns because "it has been one day." This inconsistency reveals motivated reasoning.
6. False populism: The article portrays tariffs as hurting primarily the wealthy while helping the poor, when economic research consistently shows tariffs function as regressive taxes that disproportionately burden lower-income households through higher prices on basic goods.
7. Unsubstantiated claims about outcomes: The assertion that tariffs will revitalize struggling communities lacks evidence. Previous tariff implementations (like steel tariffs under Bush or Trump's first term) failed to significantly revitalize manufacturing employment.
8. Dismissal of legitimate concerns: Labeling serious economic concerns as "throwing a fit" trivializes real potential harms to retirement accounts, businesses, and workers across economic strata.
9. Nationalistic appeals over evidence: The article appeals to American identity ("rugged individuals") rather than addressing the substantive economic critique of tariffs.
10. Mischaracterization of addiction causes: The implication that manufacturing job loss directly caused the opioid crisis ignores the complex origins of this epidemic, including pharmaceutical industry practices and healthcare system failures.

A more balanced approach would acknowledge the legitimate concerns about trade imbalances while recognizing that protectionism historically leads to economic harm, retaliatory measures, and higher prices without addressing the underlying structural changes in the economy.

 

[willdup]

I have posted a lot today. I bought in to Lighthizer’s tariffs because it promises to boost the middle class. To me, that is crucial because a strong middle class is what drives an economy. It is not just capital and credit, somebody has to buy the products.

The poor have numbers, but not the discretionary income to drive an economy. The rich have discretionary income, but most of their wealth is capital and is not used to purchase goods.

I have not been super pleased with implementation, so I give you that. But if we were to scrap the tariff idea altogether, what would you do to address my concerns over the hallowed out middle class?

You can crap on the early results, but what do you propose in its place?

A very simple but effective illustration of at least a component of the point I made below.

 

[Eastmandawg]

I have posted a lot today. I bought in to Lighthizer’s tariffs because it promises to boost the middle class. To me, that is crucial because a strong middle class is what drives an economy. It is not just capital and credit, somebody has to buy the products.

The poor have numbers, but not the discretionary income to drive an economy. The rich have discretionary income, but most of their wealth is capital and is not used to purchase goods.

I have not been super pleased with implementation, so I give you that. But if we were to scrap the tariff idea altogether, what would you do to address my concerns over the hallowed out middle class?

You can crap on the early results, but what do you propose in its place?

I would have been happy just to focus on China for now. Applying what appears to be the same formula on tariffs to the entire world doesn’t make sense to me - pretty sure there are not too many that understand why, looks to be a shotgun approach to see what falls.

BWTFDIK - gotta be a master plan that we don’t see - right?

 

[usernameDawg]

I would have been happy just to focus on China for now. Applying what appears to be the same formula on tariffs to the entire world doesn’t make sense to me - pretty sure there are not too many that understand why, looks to be a shotgun approach to see what falls.

BWTFDIK - gotta be a master plan that we don’t see - right?

Your last line, I hope so!

 

[Eastmandawg]

Your last line, I hope so!

Concur, there are a lot of major corporations that can’t figure out the rationale.

 

[DTwnDawg]

What do you mean by hollowed out middle class? Why do you think tariff’s will improve the middle class? I would argue that tariffs are a lose - lose for everyone. I’m not sure why we would want to implement Herbert Hoover style trade policies. It didn’t work 95 years ago and took a world war to recover from the mess. I guess it has been long enough to forget history.

Your past administration took care of whatever middle class was left genius …lol..can’t buy homes, groceries..living off of credit cards and debt

 

[MaitlandFloridaDawg]

Your past administration took care of whatever middle class was left genius …lol..can’t buy homes, groceries..living off of credit cards and debt

Not my past administration. I voted for Trump, but I’m not sure I would have voted at all had I realized he was going to go full blown Herbert Hoover. That is on me for thinking Trump would take a moderate approach to tariffs. I’m a pro-growth Republican / libertarian ( with a lower case “L”). I believe in low taxes, minimal regulation, minimal government interference, and minimal trade barriers.

By the way, “genius”, Google Smoot-Hawley Act and tell how that panned out.

 

[KidneyStoned]

Not my past administration. I voted for Trump, but I’m not sure I would have voted at all had I realized he was going to go full blown Herbert Hoover. That is on me for thinking Trump would take a moderate approach to tariffs. I’m a pro-growth Republican / libertarian ( with a lower case “L”). I believe in low taxes, minimal regulation, minimal government interference, and minimal trade barriers.

By the way, “genius”, Google Smoot-Hawley Act and tell how that panned out.

To MAGA cult members, anyone who questions or criticizes Orange Jesus is a flaming liberal who voted for Biden.