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You are here: Home / Economics / Free Markets Solve Everything / Iconoclasts

Iconoclasts

by Tom Levenson|  March 2, 20188:46 pm| 119 Comments

This post is in: Free Markets Solve Everything, Hail to the Hairpiece, Open Threads, Republican Stupidity, Decline and Fall, Nobody could have predicted

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Give those crafty Europeans credit for knowing their symbols:

“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levis,” European Commission President Jean-Claude Juncker told German television.”

It is worth noting that not only are these the stereotypical (one might almost say, caricature) emblems of Americana, Harley’s are made in Wisconsin, just north of Paul Ryan’s district and, as we all know, McTurtle is from the great corn-mash state of Kentucky.

Funny how a policy conceived in ignorant petulance has obvious, immediate, and hugely stupid consequences.

You may consider this both a proof-of-life post and an open thread.

(Truly astonishing NSFW the-world-was-sure-different-then image below the fold)

Images: R. M. Devens “Famous whiskey insurrection in Pennsylvania”, an illustration from Our first century: being a popular descriptive portraiture of the one hundred great and memorable events of perpetual interest in the history of our country, 1882.

Wells & Hope Co, Belle of Nelson poster, 1878. (Lifted/stolen from this work by Jean-Léon Gerome.)

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Reader Interactions

119Comments

  1. 1.

    Roger Moore

    March 2, 2018 at 8:48 pm

    and on blue jeans – Levis

    They’re missing on that one, since Levis haven’t been made in the USA for quite a while. They’re an American brand, but they’re all sewn in places with much cheaper labor.

  2. 2.

    germy

    March 2, 2018 at 8:53 pm

    “Trade wars are good and easy to win.”

    When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018

  3. 3.

    Another Scott

    March 2, 2018 at 8:55 pm

    @Roger Moore: Pedantic response – some are made in the USA, but they cost much more (as you would expect).

    Cheers,
    Scott.
    (“Who realizes there are probably 12 other responses saying the same thing by the time he clicks Post Comment…”)

  4. 4.

    FlyingToaster

    March 2, 2018 at 8:56 pm

    And next they’ll impose tariffs on our music. And films. And all of the stuff that has given us cultural hegemony since the end of WWII.

    I swear to the FSM, we’re headed for the opening chapter of Neuromancer, here.

  5. 5.

    patroclus

    March 2, 2018 at 8:57 pm

    Imposing massive tariffs (25% is NOT small) is one of the stupidest policies I have ever seen in my lifetime and is derivative of Smoot-Hawley, which as Ferris Bueller might tell you (although he missed the lecture for some reason) is one of the causes of the Great Depression. As this post indicates, other countries will retaliate, hurting exports, imports will be costlier to consumers on all sorts of items because prices will be passed on, NAFTA will tank and we’ve already left TPP. Long-term, this is just terrible! No President since Hoover has done anything like this.

    And there really isn’t much hope this can be overturned, if Trump really follows through. Congress won’t do anything. A legal challenge on the basis that this isn’t really national security (the only basis on which an EO can do it) will likely fail because if the President merely makes a “finding” of national security, it’s almost always deemed legit.

  6. 6.

    WaterGirl

    March 2, 2018 at 8:57 pm

    This article lists a whole bunch of critical meetings and phone calls that Hope Hicks was part of: Trump ignored ‘bright line’ on discussing Russia with Hicks I figured she was in deep doo-doo, but seeing it laid out like this, well, wow, just wow.

  7. 7.

    Ajabu

    March 2, 2018 at 8:58 pm

    But that Harley-Davidson thing will leave a mark. Wonder if ZEGS will just tell his constituents that
    he does’t run trade either, just like he doesn’t run Nunes committee?
    as for the bourbon ad, I have no words
    (other than: It looks like Trump would be right at home there.)

  8. 8.

    Barbara

    March 2, 2018 at 8:58 pm

    “We can do symbol laden spite as well as you can — D**bsh*t.”

  9. 9.

    Mary G

    March 2, 2018 at 8:59 pm

    Some news people are saying the Levis tariff is a shot at Nancy Pelosi, but what has she ever done to them? Also, too, if they were taking shots at Democrats they would target something from New York for Schumer. I think Levis were chosen just because they’re an iconic American thing.

  10. 10.

    Mary G

    March 2, 2018 at 9:01 pm

    @Another Scott: From your Amazon link:

    The Levi’s made in the USA collection offers the best of Levi’s style using premium cone denim fabric from north Carolina and is constructed-from start to finish-in Texas.

    Red states.

  11. 11.

    efgoldman

    March 2, 2018 at 9:03 pm

    Aren’t Harleys made with…. steel and aluminum (among other things)
    In effect, our get even Ferret Head is imposing an export tariff on them (and many other things)

    ETA:And can the Alleged “President” impose a tariff without congressional action?

  12. 12.

    Baud

    March 2, 2018 at 9:05 pm

    Wait till the world starts imposing tariffs on our ag products.

  13. 13.

    Baud

    March 2, 2018 at 9:06 pm

    @efgoldman:

    I assume there is a preexisting statute that allows him to do this?

  14. 14.

    mad citizen

    March 2, 2018 at 9:07 pm

    Economists of the world unite! Looks like we need an Economists March on Washington. The only good thing I see about TGWOT (The Global War on Trade) is that it will take down the Dotard and Family’s real estate businesses. Worst effect will be the world war.

  15. 15.

    --bd

    March 2, 2018 at 9:07 pm

    Yeah. Living in Dearborn, I can tell you that hookahs look a lot different now compared to the one that the guy is holding on the whiskey label.

  16. 16.

    schrodingers_cat

    March 2, 2018 at 9:07 pm

    T and his voters and the R party think everything is a zero sum game. This going to be a lose-lose proposition, if it is not reversed soon.

  17. 17.

    Chyron HR

    March 2, 2018 at 9:08 pm

    @Baud:

    ag products

    I don’t think the Attorney General actually makes Keebler cookies, that’s just a meme.

  18. 18.

    patroclus

    March 2, 2018 at 9:08 pm

    @efgoldman: Yes, upon a finding that it is a matter of national security. It obviously isn’t, but a legal challenge is unlikely to succeed because courts almost always defer to the executive branch on such “findings.” And it isn’t a Treasury “finding” – it’s a Presidential “finding.” Mnuchin could slow walk the paperwork, but not indefinitely. Hopefully, a smart Treasury lawyer writes it so badly that a court could conclude that it was b.s.

  19. 19.

    Magda in Black

    March 2, 2018 at 9:09 pm

    I feel kinda dumb I hadn’t made the Harley/Ryan Bourbon/McConnell connection. But, it has been a long drama filled week. TY for connecting the dots for me.

  20. 20.

    Baud

    March 2, 2018 at 9:09 pm

    @Chyron HR: Ha!

  21. 21.

    Another Scott

    March 2, 2018 at 9:10 pm

    Piling on, SCMP:

    […]

    The US move may provoke retaliation from China, the world’s biggest steel and aluminium producer, at a time when President Xi Jinping’s top economic adviser, Liu He, has been dispatched the US in attempt defuse tensions.

    China has already launched an investigation into US imports of sorghum, and is studying whether to restrict shipments of US soybeans – targets that could hurt Trump’s support in some politically important farming states.

    […]

    While China accounts for just a fraction of US imports of the metals, it is accused of flooding the global market and dragging down prices.

    “The United States has overused trade remedies and it will impact employment in the US and the interests of US consumers,” Chinese Foreign Ministry spokeswoman Hua Chunying said.

    “China will take proper measures to safeguard its rights and interests.”

    […]

    US rhetoric appears to be getting more aggressive going into the midterm elections, though Beijing still has plenty of ways to hit back, according to Dwyfor Evans, head of Asia-Pacific macro strategy at State Street Global Markets in Hong Kong.

    “On financial assets, let alone trade, the Chinese can turn around and basically spook the Americans,” Evans told Bloomberg Radio Thursday.

    “The Chinese can always rebound with a comment that they own a hefty amount of US Treasuries they can obviously withdraw.”

    On that last bit, people were yelling for years during the Obama Administration that China was somehow causing us problems by buying Treasuries. Trouble for China is, they have to buy them to keep the value of the Yuan/Renminbi low to keep up their exports. If they dump Treasuries and cause the value of the Y/R to rise (by depressing the value of the Dollar), they’re hurting their own economy. Plus, they have, what, $3T in dollar-denominated assets? They don’t want to destroy the value of their assets.

    China, and the EU, and the rest of the world will respond if Trump does impose tariffs on aluminum and steel. But it doesn’t mean we’re doomed. While he’s brain damaged, they’re not.

    Cheers,
    Scott.

  22. 22.

    NorthLeft12

    March 2, 2018 at 9:11 pm

    The Guardian has an interesting article on the complete failure of the “Clean Coal” project.
    https://www.theguardian.com/environment/2018/mar/02/clean-coal-america-kemper-power-plant
    I am wondering if this story gets much traction in the US media.

  23. 23.

    germy

    March 2, 2018 at 9:13 pm

    NBC:

    On Wednesday evening, the president became “unglued,” in the words of one official familiar with the president’s state of mind.

    A trifecta of events had set him off in a way that two officials said they had not seen before: Hope Hicks’ testimony to lawmakers investigating Russia’s interference in the 2016 election, conduct by his embattled attorney general and the treatment of his son-in-law by his chief of staff.

    Trump, the two officials said, was angry and gunning for a fight, and he chose a trade war, spurred on by Commerce Secretary Wilbur Ross and Peter Navarro, the White House director for trade.

    The Thursday morning meeting did not originally appear on the president’s public schedule. Shortly after it began, reporters were told that Ross had convened a “listening” session at the White House with 15 executives from the steel and aluminum industry.

    Then, an hour later, in an another unexpected move, reporters were invited to the Cabinet room. Without warning, Trump announced on the spot that he was imposing new strict tariffs on imports.

    By Thursday afternoon, the U.S. stock market had fallen and Trump, surrounded by his senior advisers in the Oval Office, was said to be furious.

  24. 24.

    NorthLeft12

    March 2, 2018 at 9:14 pm

    @Magda in Black:

    I hadn’t made the Harley/Ryan Bourbon/McConnell connection.

    Frankly, I think the Europeans could have made a better point by targeting industries in Republican held states that are more likely to flip to the Dems than Kentucky and Ryan’s district.

  25. 25.

    efgoldman

    March 2, 2018 at 9:14 pm

    @Baud:

    I assume there is a preexisting statute

    Dunno’. Burnsie might.

  26. 26.

    patroclus

    March 2, 2018 at 9:16 pm

    @Another Scott: “China” isn’t purchasing Treasuries – various independent publicly-traded companies domiciled in China and various Chinese partially-owned SOE’s (and some full-blown SOE’s) are buying them. Pretending that they are all the same is inaccurate and thinking that they will all act the same is also not likely. Canada is the largest exporter of steel to the U.S. – they WILL respond and it won’t be pretty. NAFTA will die and a U.S.-less TPP (but with Canada) will also respond. It’ll be like BREXIT – the rules of trade will be set by others and the U.S. will have little to no say about them (but will ultimately have to comply with the market standard if and when the coming trade war ever ends).

  27. 27.

    Raven

    March 2, 2018 at 9:17 pm

    Jorma is great and the religion is not something I’d notice anymore than when he plays Good Shepherd or I see the light!

  28. 28.

    Dorothy A. Winsor (formerly Iowa Old Lady)

    March 2, 2018 at 9:17 pm

    Re the picture, someone took that lady’s pants.

  29. 29.

    NorthLeft12

    March 2, 2018 at 9:17 pm

    @germy: Trump has been screaming at his cabinet and chief for about a year regarding tariffs. I remember a laughable exchange regarding trade where he kept asking “where are my tariffs?” and angrily berating [whats new] his staff that they were not bringing him any tariffs to put in place.
    I guess he finally got what he wanted.

  30. 30.

    Adam L Silverman

    March 2, 2018 at 9:20 pm

    @efgoldman: Yes, if Commerce issues a national security finding. Which Ross did. This is an absolutely stunningly galactically stupid idea.

  31. 31.

    Magda in Black

    March 2, 2018 at 9:20 pm

    @NorthLeft12:
    Seems like a nice simple specific high profile jab/point made. Prob more aimed at the Big Boys than voters. But…..you’re asking me to think…..and I spent my week working with non-thinking republicans, so my thinking gears are rusty. ?

  32. 32.

    Davebo

    March 2, 2018 at 9:21 pm

    @Roger Moore: They do have one very expensive line made in Greensboro, NC.

  33. 33.

    Adam L Silverman

    March 2, 2018 at 9:21 pm

    Speaking of absolutely stunningly galactically stupid ideas!
    https://www.cnn.com/2018/03/01/politics/north-korea-trump-nuclear-missile-threat-red-line/index.html

    “All the damage that would come from a war would be worth it in terms of long-term stability and national security,” Senator Lindsey Graham, a South Carolina Republican who has had multiple conversations with President Donald Trump about North Korea, told CNN.

  34. 34.

    Baud

    March 2, 2018 at 9:22 pm

    All the anti-trade folks should have gone balls-to-the-wall to get Hillary elected after she agreed to revisit the TPP. Now their credibility will depend on how well Trump handles trade issues.

  35. 35.

    Baud

    March 2, 2018 at 9:23 pm

    @Dorothy A. Winsor (formerly Iowa Old Lady): I sympathize.

  36. 36.

    DissidentFish

    March 2, 2018 at 9:23 pm

    @–bd:

    I can tell you that hookahs look a lot different now compared to the one that the guy is holding on the whiskey label.

    Bo*bies, however, look much the same. (Except in LA)

  37. 37.

    David ??Merry Christmas?? Koch

    March 2, 2018 at 9:24 pm

    SHOW ME YOUR WAR FACE!

    His campaign says [Wilmer] also would impose countervailing tariffs on imports from China and Japan “until they stop dumping steel into the United States and stop manipulating their currencies.” (link)

  38. 38.

    Davebo

    March 2, 2018 at 9:24 pm

    @Adam L Silverman: He had to do something to continue to depress the market and this seems to have done the trick.

    What can I say, he’s a stunningly galactically stupid guy.

  39. 39.

    efgoldman

    March 2, 2018 at 9:25 pm

    @Adam L Silverman:

    This is an absolutely stunningly galactically stupid idea.

    Majorx4 ought to write a macro which drops that in every post about the unmentioned one.

  40. 40.

    Another Scott

    March 2, 2018 at 9:26 pm

    @patroclus: Take it up with the St. Louis FED.

    ;-p

    Cheers,
    Scott.

  41. 41.

    Ken

    March 2, 2018 at 9:26 pm

    @DissidentFish: Please! That’s clearly an artistic work, so they should be called “nudes”, not “bo*bies”.

  42. 42.

    Adam L Silverman

    March 2, 2018 at 9:26 pm

    @germy:

    By Thursday afternoon, the U.S. stock market had fallen and Trump, surrounded by his senior advisers in the Oval Office, was said to be furious.

    Unfortunately he wasn’t furious at himself, Ross, and Navarro for being so stupid.

  43. 43.

    Amir Khalid

    March 2, 2018 at 9:27 pm

    @Another Scott:
    This is also the practice at iconic American guitar brands Fender and Gibson, I have learned. All I keep hearing about Gibson is that they’re half a billion dollars in debt (amazingly, only half of what JarJar is in hock for!) and going bust.

  44. 44.

    NotMax

    March 2, 2018 at 9:27 pm

    @Adam L. Silverman

    “We had to destroy the economy in order to save it.”

  45. 45.

    Adam L Silverman

    March 2, 2018 at 9:27 pm

    @Dorothy A. Winsor (formerly Iowa Old Lady): And your point is?//

  46. 46.

    Roger Moore

    March 2, 2018 at 9:28 pm

    I’m sure they would have put a tariff on anything Trump made if his companies actually made anything.

  47. 47.

    Adam L Silverman

    March 2, 2018 at 9:29 pm

    @NorthLeft12: From the reporting, apparently it was Rob Porter who had sidelined the tariff insanity and managed to keep it sidelined. Remove Porter and no one is specifically tasked with preventing the destruction of the US economy.

  48. 48.

    Adam L Silverman

    March 2, 2018 at 9:30 pm

    @DissidentFish: And South Beach.

  49. 49.

    efgoldman

    March 2, 2018 at 9:31 pm

    @Roger Moore:

    if his companies actually made anything.

    They could put an excise tax on grift

  50. 50.

    Gravenstone

    March 2, 2018 at 9:32 pm

    @Adam L Silverman: So we’re gonna recall Sen. Graham to active duty and ship him off to the Korean peninsula to join the first wave of any invasion, right?

  51. 51.

    David ??Merry Christmas?? Koch

    March 2, 2018 at 9:33 pm

    “Hoot-Smalley is an example of somebody who’s done an amazing job and is getting recognized more and more.”

  52. 52.

    Adam L Silverman

    March 2, 2018 at 9:33 pm

    @NotMax: Apparently. Even Hewitt seems to be freaking out, which is kind of hard given he always appears to be completely baked on Jeff Sessions’ favorite gateway drug. Of course, since it’s Hewitt, he has to revise history in order to freak out.

    Peter Navarro conned everyone in WH. Everyone. Quietly sat there for a year, staying low, and then tossed in a grenade to explode a year of economic growth and regulatory rollback, without any review from serious economists, nat sec experts. EU first to https://t.co/9WAAMSrWgC

    — Hugh Hewitt (@hughhewitt) March 2, 2018

    Apparently @hughhewitt missed the entire 2016 campaign, when talking about tariffs and blowing up NAFTA, WTO, and other deals was only the centerpiece of Trump's whole economic schtick. More so than tax cuts. https://t.co/9iqNYZ0FDw

    — David Burbach (@dburbach) March 3, 2018

  53. 53.

    Adam L Silverman

    March 2, 2018 at 9:35 pm

    @Roger Moore: Everything his companies make is made in China, so kind of hard for the PRC to put a tariff on it.

  54. 54.

    Adam L Silverman

    March 2, 2018 at 9:37 pm

    @Gravenstone: One of my former students and a good friend, a USAF colonel, refers to Senator Graham as “that’s our Lindsay”. And his voice drips with sarcasm and he rolls his eyes.

  55. 55.

    NotMax

    March 2, 2018 at 9:37 pm

    @Adam L.Silverman

    And, in the now typical ‘would screw up a one-person nose picking contest’ way they operate –

    …The NBC News report added that Ross hadn’t informed the White House in advance of the steel and aluminum executives he’d invited to yesterday’s meeting. “As a result, White House officials were unable to conduct a background check on the executives to make sure they were appropriate for the president to meet with and they were not able to be cleared for entry by secret service. According to a person with direct knowledge, even White House chief of staff John Kelly was unaware of their names.” Source

  56. 56.

    Another Scott

    March 2, 2018 at 9:37 pm

    @Amir Khalid: US guitar makers got decimated when Guitar Center had huge financial issues. Naturally, Bain Capital had its fingers in the pie:

    […]

    To recap, Guitar Center was acquired in 2007 by Bain Capital, who took on a huge debt load of $1.6 billion in the process. More recently Bain’s partner Ares Management turned it’s debt into equity when Bain had trouble making payments and took over the management of GC. Suddenly there was less inventory, fewer SKUs and fewer vendors, but there was also the matter of 5 stores unionizing. Ares was allegedly very slow in negotiating a union contract with these stores and was then hit by an unfair practice charges by the Retail Workers Union to the National Labor Relations Board.

    Garland has stated all along that this was a financial hole that GC could probably never crawl out of, and that at some point the company would have to declare bankruptcy and regroup. The latest evidence that this might be in the offing comes from a new employee agreement (as seen below) that resulted in decreasing sales commissions from 10% on profit and 2% on gross down to 0.25%.

    [ Guitar Center commisson letter ]

    Not only that, the company has decreased the number of work hours for both salesman and managers to the point where the inside joke is that the company is at “liquidation staffing” levels. To grind the corporate heel in the salesman’s face just a little more, the company has raised the cost for employees to purchase new gear (one of the major reasons for musicians wanting to work there) by 10 to 15%.

    Many store employees also feel that the company has reneged on promotions and benefits agreed to in the previous employment agreement. Worse, the general feeling of store employees is that this is at least a partial punishment for those stores attempting to unionize and a warning to others in the chain who may be considering it.

    To say that this is bad for Guitar Center’s business is an understatement. Unhappy employees lead directly to unhappy customers, something the company can ill-afford right now. While GC salesman have reaped a lot of abuse in the past for their lack of training and professionalism, the fact of the matter is that there are many that truly care about the customer and try their best to please. Treating them poorly is just another step towards forcing them out, only to have a new round of poorly trained replacements take their place. Of course, it’s the customer that suffers in the end, which further hastens the company’s downward spiral.

    Guitar Center is an excellent example of financial engineering based on the type of greed that’s all too common in big business today. The formula of acquiring a company for a minimum of cash and a load of debt, then using lean management techniques to make the company look profitable in order to sell to a bigger fish may well be the order of the day in most other industries, but the musical instrument industry is too small for that to work, as evidenced by GC’s performance over the last eight years.

    […]

    Of course, most popular music in the US isn’t guitar-based any more, so that’s putting huge pressure on guitar makers as well.

    Cheers,
    Scott.

  57. 57.

    patroclus

    March 2, 2018 at 9:38 pm

    @Another Scott: I think I’ll stick with the actual facts and the publically available knowledge of the markets caps of Bank of China, ICBC, ABC, Bank of Communications and the CCB, as well as each of their AMC’s and the insurance giants like PICC and, of course CIC and the ITIC’s located in each province and SAR’s. The PBOC has been decentralized for over a decade and Americans (including the lightly regarded St. Louis Fed) should learn about all of the various individual entities, how they are organized, how much they are publically owned and the impetus driving each of their individual behaviors.

  58. 58.

    John Revolta

    March 2, 2018 at 9:38 pm

    @Adam L Silverman: “Ah’m not sayin’ we wouldn’t get ar hayuh mussed…………”

  59. 59.

    Dorothy A. Winsor (formerly Iowa Old Lady)

    March 2, 2018 at 9:40 pm

    @Adam L Silverman: I conclude she lives in a warmer climate than I do.

  60. 60.

    Adam L Silverman

    March 2, 2018 at 9:41 pm

    @NotMax: As I stated before the inauguration (and this is probably not word for word, so more like a paraphrase):

    These are not particularly smart folks. They think they are, but at best they’re cunning or crafty. They’re loud. They telegraph everything. They can’t keep their mouths shut. People are going to get hurt, especially people that deserve to get hurt the least. But these folks will be their own undoing. Hold the line.

  61. 61.

    Adam L Silverman

    March 2, 2018 at 9:43 pm

    @Another Scott: Because there is no difference in making and selling quality guitars as there is doing business consulting. Completely interchangeable skill sets. Same with Cerberus and Remington.

  62. 62.

    Another Scott

    March 2, 2018 at 9:44 pm

    @patroclus: Ok, I’ll defer to your obviously better knowledge than mine.

    But we’ll see what happens, if anything.

    Thanks.

    Cheers,
    Scott.

  63. 63.

    Adam L Silverman

    March 2, 2018 at 9:46 pm

    @John Revolta: War on the Korean peninsula in the 21st Century would make what the Iron Brigade did to the Confederates near the Dunker Church at Antietam, Pickett’s Charge at Gettysburg, the trench warfare of WW I, Guadalcanal in WW II, and the battle of the Chosin Reservoir during the Korean War look like a kid’s party with cupcakes, a piñata, a bounce house, and a pony.

  64. 64.

    patroclus

    March 2, 2018 at 9:46 pm

    @Adam L Silverman: No. The applicable statutes are the Trading with the Enemy Act (which allows the POTUS to impose tariffs in a time of war) and the International Emergency Economic Powers Act (which authorizes the POTUS to impose tariffs in the event of a POTUS “finding” of a national emergency). Both TWEA and IEEPA are administered by the Treasury Department’s Office of Foreign Assets Control (“OFAC”) and it is therefore up to Mnuchin, not Ross. Like I said above, Mnuchin can slow-walk it for awhile, but probably not indefinitely.

  65. 65.

    Adam L Silverman

    March 2, 2018 at 9:47 pm

    @Dorothy A. Winsor (formerly Iowa Old Lady): Or they have central heating.

  66. 66.

    Another Scott

    March 2, 2018 at 9:48 pm

    @Adam L Silverman: Yup.

    It’s been proven, over and over again, that a top-flight MBA gives a person skills so that they can manage anything…

    (groucho-roll-eyes.gif)

    Cheers,
    Scott.

  67. 67.

    Adam L Silverman

    March 2, 2018 at 9:50 pm

    @patroclus: Okay. There are two issues here:
    1) Officially the US is not at war anywhere. Without a declaration of war, I don’t see how the first one actually is in play.
    2) Given that the only national emergency finding we have right now is in regard to terrorism, specifically non-state actor terrorist groups that don’t produce steel or aluminum, here too the law isn’t applicable.

    That doesn’t mean this won’t hold up, just that the legal cover is thin to non-existent.

  68. 68.

    Calouste

    March 2, 2018 at 9:50 pm

    Note that the US is imposing tariffs on raw materials, but the EU in retaliation is imposing tariffs on finished consumer goods. Making foreign raw materials more expensive hurts your own industry. Making foreign finished goods more expensive just shifts the market to your own producers. Europeans are just going to buy Nortons and Ducatis instead of Harleys, and scotch instead of bourbon.

  69. 69.

    James E. Powell

    March 2, 2018 at 9:56 pm

    @Another Scott:

    Guitar Center sells everything.

  70. 70.

    John Revolta

    March 2, 2018 at 9:58 pm

    @Adam L Silverman: There would also be a downside.

  71. 71.

    Another Scott

    March 2, 2018 at 9:58 pm

    @Adam L Silverman: It would be interesting to see a detailed comparison of what Trump is proposing to do with aluminum and steel with what Obama did with Chinese tires in 2009. Here’s a 2016 story comparing Obama’s actions with Trump’s campaign proposals.

    It feels like Trump’s people are skipping some steps that Obama went through, but it might be that the reporting is different. Dunno.

    Cheers,
    Scott.

  72. 72.

    frosty

    March 2, 2018 at 10:00 pm

    @NorthLeft12: Harleys are assembled in York PA. Not a completely red state yet, and one of the bigger employers in the County.

  73. 73.

    Another Scott

    March 2, 2018 at 10:01 pm

    @James E. Powell: I haven’t been able to find a linky this evening, but my recollection is that something like 50% of Gibson’s and/or Fender’s sales were through Guitar Center. GC having problems directly contributed to Gibson’s and Fender’s problems.

    Corrections welcome.

    [eta:] But I guess I misunderstood. Yeah, they sell drum machines dual turntables and the like that hip-hop artists might use. But Apple probably has taken a lot of hardware sales with Garage Band and the like…

    Cheers,
    Scott.

  74. 74.

    Adam L Silverman

    March 2, 2018 at 10:02 pm

    @Another Scott: There’s no real policy process here. There’s no real strategy development to implement the policy. This is just something the President and Navarro have been arguing for for decades. Both have been very, very pro tariffs for ever.

  75. 75.

    patroclus

    March 2, 2018 at 10:03 pm

    @Adam L Silverman: Sort of. Technically, the findings authorizing both the economic sanctions against the DPRK and Cuba in the Foreign Assets Control Regulations and the Cuban Assets Control Regulations were authorized pursuant to TWEA and TWEA was amended in 1933 (to close the banks) to operate in peacetime as well as war times (although it has never been used merely to implement tariffs). Moreover, the conflict in Korea was never officially terminated – only the Panmunjon Armistice applies.

    Under IEEPA, we are currently under roughly 128 POTUS “findings” of national emergencies – which apply to all of the myriad economic sanctions that the U.S. currently has in place. (You name the country – I can name the sanctions – it is VAST!) Go to the OFAC site for a complete listing – aside from the military, OFAC is the most active implementer and administrator of economic foreign policy.

    That said, I agree with you -there really isn’t a “national emergency” with respect to Canadian steel – it’s laughable. But the courts have ALWAYS deferred to OFAC and the presidential findings they promulgate. Basically, if the POTUS says it, they uphold it. It is very unlikely that they would overturn a POTUS finding under either TWEA or IEEPA. A suit might temporarily delay things, but not indefinitely. The legal cover is non-existent here, but historically, all they have ever needed is the fig leaf of a Presidential “finding.”

  76. 76.

    Another Scott

    March 2, 2018 at 10:07 pm

    @Calouste: Excellent point.

    Cheers,
    Scott.

  77. 77.

    Adam L Silverman

    March 2, 2018 at 10:07 pm

    @patroclus: There was no declaration of war for the Korean conflict.

  78. 78.

    charluckles

    March 2, 2018 at 10:09 pm

    @Adam L Silverman:

    Has the Republican Party been taken over by ghouls? It would be irresponsible not to speculate.

  79. 79.

    Davebo

    March 2, 2018 at 10:14 pm

    @Gravenstone: Really hard to get farther from the front line than Air Force JAG officer.

  80. 80.

    frosty

    March 2, 2018 at 10:16 pm

    @Another Scott: If MARS and GC hadn’t rolled into town like Walmart and shut down independent retailers who’d been local for decades, then Fender and Gibson would still have outlets. This is not only an MBA/Bain issue, it’s an overall monopoly issue (cf Amazon). Where’s TR the trust buster when we need him?

  81. 81.

    nasruddin

    March 2, 2018 at 10:16 pm

    @frosty: York Co – red

  82. 82.

    Adam L Silverman

    March 2, 2018 at 10:16 pm

    @charluckles: No. Senator Graham thinks he’s good at national security and foreign policy issues, despite all evidence to the contrary. Bless his heart

  83. 83.

    Another Scott

    March 2, 2018 at 10:17 pm

    @Adam L Silverman: Commerce says it’s going through the motions and waiting for a US ITC finding about Chinese aluminum foil (from February).

    Obama used the US ITC finding to put in place the tariffs on Chinese tires.

    Yes, Trump’s minions are generally ignoring rules and norms, but at least part of the normal process seems to be happening here with these proposed tariffs on aluminum and steel.

    We’ll see what happens, if anything.

    FWIW.

    Cheers,
    Scott.

  84. 84.

    Another Scott

    March 2, 2018 at 10:18 pm

    @frosty: Another excellent point.

    The MBAs are going to continue to destroy the US economy if something isn’t done. And continue to enrich themselves in the process… :-(

    Cheers,
    Scott.

  85. 85.

    patroclus

    March 2, 2018 at 10:19 pm

    @Adam L Silverman: Right. We don’t declare war anymore and only occasionally, do we authorize the use of military force (by Congress). All of that has been delegated to OFAC, as it was with Korea in 1950. There, Truman made a “finding” of a national emergency under TWEA and it is still in force because there was never a peace treaty or a new finding or Congressional action. “No dealings” between U.S. persons and DPRK persons are allowed by U.S. banks or businesses and they haven’t been allowed since that finding and the promulgation of the Foreign Assets Control Regulations. Effectively, we remain “at war” economically as we have been for 68 years even though was never neither a declaration of war nor a Congressional authorization of the use of military force.

    Sam Rayburn (and Congress) acquiesced to Truman on this issue regarding Korea because he thought that the POTUS and OFAC could act more expeditiously than lengthy Congressional debates regarding these issues. It all started with Korea and was a huge political issue at the time (Truman described it as a “police action” of the UN) needing no Congressional action other than funding. Its precursors were FDR’s declarations of unlimited national emergencies imposing an asset freeze and what turned out to be a trade embargo against Japan in 1940 and 1941. But no UN existed then, so Korea is really the starting point for OFAC’s vast powers.

  86. 86.

    Ken B

    March 2, 2018 at 10:19 pm

    @Adam L Silverman:

    Didn’t the Chinese give the Trump organizations a lot of patents andor trademarks last year, as a thinly hidden bribe?

    What’s to stop them from scratching their heads and saying, “Mistakes were made, we’re pulling them”?

    And how well would Trump properties do in Europe if they found themselves facing serious health code monitoring? What if any building with the Trump name on it started getting extra regulatory attention?

    What if Deutsche Bank called in his loans?

    Also, I suspect the US IC, and Mueller, may find themselves getting even more cooperation than they already are.

  87. 87.

    matt

    March 2, 2018 at 10:22 pm

    I like that they’re being so targeted with shithole state stuff. Makes me think they’re keeping closer track of things than a lot of folks (like US political media).

  88. 88.

    mad citizen

    March 2, 2018 at 10:22 pm

    @NorthLeft12: “The Guardian has an interesting article on the complete failure of the “Clean Coal” project.
    https://www.theguardian.com/environment/2018/mar/02/clean-coal-america-kemper-power-plant
    I am wondering if this story gets much traction in the US media.”

    I saw your post–this is my job area. Don’t you mean “beautiful clean coal”? We have a functioning Clean Coal plant in my state–Indiana. The original estimate was around $1.9 billion; final cost around $4 billion. And it has operational issues, but is doing much better lately. Aside from working on the case, I’m also a customer so get to pay for it as part of my monthly bill. Of course in 2008-09, no one saw the extent of shale gas.

    Even a recent conventional coal plant plant suffered similar cost overrun issues, Prairie State in Illinois. These days everyone is building gas, and of course wind, solar is here and storage may be coming soon. Even fusion is still being worked on, and could be commercial in fifteen years or so.

  89. 89.

    Amir Khalid

    March 2, 2018 at 10:23 pm

    @Adam L Silverman:
    The big grumbles about Gibson’s recent US-made product are iffy quality control, innovations that don’t work well, and ugly aesthetics. There’s a widespread feeling that a Gibson Les Paul is not worth the typical 300% premium over the equivalent Epiphone-branded guitar. (Epiphone Inc, a Gibson unit,makes cheaper versions of Gibson guitars as well as its own models.) Gibson also took on a lot of debt for a diversification into “music lifestyle” that hasn’t paid off. It still makes a profit on guitars, though, and that business might yet survive the looming Gibson Brands bankruptcy.

  90. 90.

    frosty

    March 2, 2018 at 10:23 pm

    @nasruddin: Absolutely. In 2008 my Democratic Party contact said that if we could get York County to 34% we’d win PA. We hit 36% and took it (numbers are close but may not be exact).

  91. 91.

    patroclus

    March 2, 2018 at 10:28 pm

    @Another Scott: That’s another possible authorizing statute – which would be under Ross (as Adam stated), not Mnuchin. I think Bush used that one for his brief tariffs as well. The difference is that those are imposed for temporary durations and require periodic new findings (like under the Iran deal) whereas the TWEA and IEEPA sanctions are for an indefinite period and basically never end until and unless the underlying conflict is fully resolved. Which is what Trump said he was going to do. (Not that he knows what he is talking about). Hence, they are less permanent and more likely to be subject to legal challenge. It is possible that Mnuchin and OFAC will balk and that the Commerce ITC sanctions will be relied on instead. Like you said, we’ll see.

  92. 92.

    frosty

    March 2, 2018 at 10:29 pm

    @mad citizen: Fusion will always be commercial in 15 (or 20) years or so. Nevertheless, hope it’s more likely this decade.

  93. 93.

    Adam L Silverman

    March 2, 2018 at 10:30 pm

    @patroclus: No arguments here. If we were going to slap the tariff on steel and aluminum from the DPRK, then this would all make sense. That lack of coherence is not your fault, you’re just the messenger.

  94. 94.

    Brachiator

    March 2, 2018 at 10:31 pm

    The crazy thing is that Trump supporters don’t care. They are sustained by Trump’s resentment, have made it their own and don’t care whether these policies are counterproductive or self destructive. They want to stick it to anyone who defies America.

    This echoes what is happening in the UK. A recent report suggests that BREXIT will hurt the areas of the country that voted for it. A minister dismissed the report, saying experts are always wrong. And the most strident BREXIT supporters angrily lash out against anyone who points out problems or suggests caution. There is also a fantasy that the US and the UK will form an economic alliance that will stick it to the Europeans.

    And here in the US the craziest thing of all is that the GOP leadership will go along with anything that Trump says. It goes beyond loyalty. It is positively servile.

  95. 95.

    Adam L Silverman

    March 2, 2018 at 10:32 pm

    @Ken B: Yes they did. They approved a bunch shortly after the inauguration ahead of his visit to the PRC. These were both for Trump Org and for Ivanka’s branded companies.

  96. 96.

    frosty

    March 2, 2018 at 10:33 pm

    @Amir Khalid: True, Epis are good value. I had QC issues on a Korean Epi bass that were pretty easily resolved.

    There should be *none* on. USA Gibson.

  97. 97.

    Adam L Silverman

    March 2, 2018 at 10:33 pm

    @Amir Khalid: I do not play the guitar. I do not follow guitar issues. I will take your word on all of this.

  98. 98.

    Steve in the ATL

    March 2, 2018 at 10:39 pm

    @Another Scott:

    Ares was allegedly very slow in negotiating a union contract with these stores and was then hit by an unfair practice charges by the Retail Workers Union to the National Labor Relations Board.

    I get hit with ULP charges all the time. It ain’t no thang. It’s just an accusation by a union that a company is doing something they don’t like. May or may not have merit. Doesn’t cost the union any money; anyone with a crayon and a piece of paper can file one.

    ETA: It’s also common for first contracts to take a long time, as the company doesn’t have experience with labor and doesn’t know how to do it. Plus, usually the company really doesn’t want to do it.

    GC seems like a company that really needs a union. Probably every company owned by Bain and similar bastards.

  99. 99.

    Steve in the ATL

    March 2, 2018 at 10:44 pm

    @Adam L Silverman: Amir speaks the truth. As does frosty. Who hopefully stays that way.

  100. 100.

    patroclus

    March 2, 2018 at 10:44 pm

    @Adam L Silverman: Indeed. There is no national emergency involving Canada in force and there has never been any “finding” of one. It’s patently absurd. Which is why they are focusing on China, which is the world’s largest steel producer but doesn’t export all that much to the U.S. And arguably, China has been “dumping” it on other countries, driving the world market price down. But the statute authorizing the Commerce findings requires actual economic facts and data to prove the “dumping” (in accordance with WTO processes) which is why it must be continually updated with new such facts. This isn’t what Trump wants, would be difficult to really prove and would be challengable at both the WTO and in U.S. courts. Which is why, I think, that Trump has signaled that he wants to go the TWEA/IEEPA route, which is essentially b.s. If Mnuchin and OFAC balk, though and it gets tied up with the WTO, it’s possible that the harmful effect of Trump’s nonsense can be minimized, at least for awhile.

  101. 101.

    Ol'Froth

    March 2, 2018 at 10:53 pm

    I always thought Harley’s were made in York, PA?

  102. 102.

    Another Scott

    March 2, 2018 at 10:56 pm

    @patroclus: Thanks for your extended input on this thread. It’s always great to get real-time posts from people who know what they’re talking about and aren’t just informed (to variable degrees!) lay people. That’s one of the great things about this blog!

    Cheers,
    Scott.

  103. 103.

    Adam L Silverman

    March 2, 2018 at 10:58 pm

    @Steve in the ATL: I believe them both.

  104. 104.

    Corner Stone

    March 2, 2018 at 10:58 pm

    @Another Scott:

    lay people

    For Pope’s sake, whatever you do, do NOT mention the word laity.

  105. 105.

    Adam L Silverman

    March 2, 2018 at 11:00 pm

    @patroclus: Yep.

    Though my understanding is there will be a full push by the sane advisors (everyone but Navarro and Ross) between now and next week’s signing of the order to try to get this back in the box and keep it from happening.

  106. 106.

    efgoldman

    March 2, 2018 at 11:18 pm

    @Steve in the ATL:

    GC seems like a company that really needs a union.

    I believe the office paper company (name escapes me) that Mittster hollowed out, bankrupted and put out of business had at least some union workers. Didn’t help

  107. 107.

    efgoldman

    March 2, 2018 at 11:20 pm

    @patroclus:

    Which is why, I think, that Trump has signaled that he wants to go the TWEA/IEEPA route, which is essentially b.s.

    You attribute thinking processes and decision making to hair furor that simply doesn’t exist. Think four year old.

  108. 108.

    Ladyraxterinok

    March 2, 2018 at 11:21 pm

    @Adam L Silverman: Is there a rule of unintended consequences?

  109. 109.

    Steve in the ATL

    March 2, 2018 at 11:23 pm

    @Ladyraxterinok: it’s more of a guideline

  110. 110.

    Another Scott

    March 2, 2018 at 11:34 pm

    @Steve in the ATL: Thanks.

    I know you get a lot of (overwhelmingly good natured!) grief here. I appreciate your input.

    Cheers,
    Scott.

  111. 111.

    Steve in the ATL

    March 2, 2018 at 11:39 pm

    @Another Scott: no grief I get here compares to the grief I get from the union thugs I deal with every day, and no grief I get from union thugs compares to the grief I get from my wife and daughters!

  112. 112.

    Another Scott

    March 2, 2018 at 11:52 pm

    @Steve in the ATL: All of it well deserved, I’m sure!!

    ;-)

    Cheers,
    Scott.

  113. 113.

    Ruckus

    March 2, 2018 at 11:52 pm

    @Brachiator:
    They want to stick it to anyone who defies their version/vision of America.
    FIXIT for you.

  114. 114.

    Ruckus

    March 3, 2018 at 12:04 am

    @Brachiator:

    It goes beyond loyalty. It is positively servile.

    He is their leader and most of them are not close enough to smart to realize that drumpf is bad for anyone who associates with him. Either they think they can profit off of him for their own ends or they think they can profit off of the chaos for their own ends. Also a lot of their ends are in line with drumpf’s so that just puts them back in the same place. If they were smart they would bail tomorrow. But if they were smart enough to do that they wouldn’t be republicans in the first place. We get bullshit because that’s all the entire party knows any more. Their owners want it that way. Because that’s pretty much all their owners know as well.

  115. 115.

    efgoldman

    March 3, 2018 at 12:07 am

    @Another Scott:

    All of it well deserved, I’m sure!!

    Especially from daughters (I speak from experience)

  116. 116.

    Brachiator

    March 3, 2018 at 1:01 am

    @Ruckus:

    Also a lot of their ends are in line with drumpf’s so that just puts them back in the same place.

    I think it lines up only with respect to bigotry and hatred. But even here, Trump exploits this hatred to enrich himself, his family and his plutocrat buddies. Everybody else is a chump who is going to end up with nothing.

  117. 117.

    Ruckus

    March 3, 2018 at 1:34 am

    @Brachiator:
    Oh I don’t disagree with this very much. I’m just saying there are no innocent conservative victims here. I do think though that it’s also about grift and corruption, which is bubbling just under the surface and if it’s exposed it will burn a lot of conservative pols, not just drumpf. He most likely will suffer the most because he’s in way, way, way, way over his head. And has been elected head snake.
    As a side note I think a lot of conservative pols are backing him simply because they think that he will suffer for them. I don’t think it’s going to work that way. He maybe stupid but as you made the point, he will throw everyone but himself under that bus. That will of course make it much more obvious how deep he’s in the shit.

  118. 118.

    Jack the Cold Warrior

    March 3, 2018 at 2:27 am

    @Mary G:

    NC is a purple state, voted for Obama twice and B. Clinton once and would be a D state in Congress If we weren’t the most gerrymandered state in the US. We have progressive/liberal bastions in the Research Triangle (Raleigh, Durham, Chapel Hill), Asheville, and almost every college town.

    Our recent off year local elections have seen a strong surge to progressives. My city, Salisbury, just elected several progressives to the city council, including our first Black (and Female) Mayor and a lesbian councilwoman. We are going to work like hell to get rid of a lot of R legislators this year, as well as Congress critters.

    Please contribute to Act Blue!

  119. 119.

    lowtechcyclist

    March 3, 2018 at 6:32 am

    @Adam L Silverman:

    @John Revolta: War on the Korean peninsula in the 21st Century would make what the Iron Brigade did to the Confederates near the Dunker Church at Antietam, Pickett’s Charge at Gettysburg, the trench warfare of WW I, Guadalcanal in WW II, and the battle of the Chosin Reservoir during the Korean War look like a kid’s party with cupcakes, a piñata, a bounce house, and a pony.

    And Lindsey Graham says there’s a 30% chance that Trump will launch a first strike on North Korea, and he says that goes up to 70% if NK does one more nuclear test.

    If that’s anything close to the truth, AFAIAC the GOP is committing treason by not impeaching and removing Trump yesterday, as he constitutes a clear and present danger to the U.S. and its allies. Ditto Pence and Trump’s Cabinet for not exercising 25th Amendment remedies. Hell, if Lindsey believes that, he should take matters into his own hands and off Trump the next time they meet.

    As I lack means, talent, and stomach for political assassination, I can only hope that Sen. Graham is wildly wrong.

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