Student Visas

February 24, 2017

The subject of student visas aggravates me as much as illegal immigration (although we’re finally getting some great news on that front).

Why?  “What’s the problem with student visas?” you might ask.  For most, the topic probably conjures up images of foreign exchange students coming to the U.S. to experience life here and return home to spread the news about what a great place the U.S. is and to help spread our value system around the world.  Or maybe you envision students coming here for an education that can be put to work back home in some underdeveloped country, helping to raise living standards there.  But the reality of the situation is nothing like this.  The student visa program boils down to money.  It’s a system designed to suck trade dollars back into the U.S. economy and to prop up inflated tuitions.

Let’s begin with some data.  Here are the statistics for non-immigrant visas issued from 2011 through 2015.  (The data for 2016 is not yet available.)  Student visas are primarily “F” visas.  “M” visas are for vocational students.  Taken together, they totaled nearly 700,000 in 2015.  These are “non-immigrant” visas, but don’t be fooled.  A large percentage of these students receive immigrant visas (leading to permanent status) almost automatically upon graduation.

Where do these students come from?  About 280,000 came from mainland China.  75,000 came from India.  28,000 came from Saudi Arabia.  27,000 came from South Korea.  17,600 came from Vietnam.  An equal number came from Mexico.  17,000 came from Japan.  The rest are spread across the remaining nations of the world.  The significance of this list will be discussed later.

To get an idea of what the student visa program is really about, take a look at this web site, which provides information for foreign students for how to apply:

https://www.studyusa.com/en/a/33/how-to-get-your-u-s-student-visa

What it boils down to is this:  you have to explain why you want to study in the U.S. and, more importantly, you have to prove that you can pay for it.  There’s no student loan program here, at least not through U.S. agencies.  If you can get scholarship money from your native country, fine, but regardless of how you get the cash, you have to be able to pay your way.  You must also declare your intent to return to your home country when you’re finished with your studies.  But that’s a formality, one easily skirted when you actually get your degree.

In 2015, over 677,000 “F” visas were issued.  223,000 applicants were refused.  In other words, about three quarters of all applicants are accepted.

Now, let’s take a look at some interesting findings about the student visa program published in a study by the Brookings Institution in 2012.  Here’s the link:

https://www.brookings.edu/interactives/the-geography-of-foreign-students-in-u-s-higher-education-origins-and-destinations/#/M10420

“From 2008 to 2012, 85 percent of foreign students pursuing a bachelor’s degree or above attended colleges and universities in 118 metro areas that collectively accounted for 73 percent of U.S. higher education students. They contributed approximately $21.8 billion in tuition and $12.8 billion in other spending—representing a major services export—to those metropolitan economies over the five-year period.”

Got that?  They paid full tuition and living expenses, bringing over $33 billion into the economy.  And that was through 2012.  In 2015, when 25% more visas were issued than in 2012, that figure rises to over $42 billion.

Two-thirds of foreign students pursuing a bachelor’s or higher degree are in science, technology, engineering, mathematics (STEM) or business, management and marketing fields, versus 48 percent of students in the United States.

Remember how tech companies claim that they depend heavily on immigrants to provide the advanced skills that they need?

Forty-five (45) percent of foreign student graduates extend their visas to work in the same metropolitan area as their college or university.

In other words, these students then go on to become the H1-B visa workers that the tech industry (and many others) claim that they need.  So the “non-immigrant” nature of student visas, and the declaration of intent to return to their home country, is truly a joke.  Here’s further evidence that student visas are used as the pipeline for H1-B visas:

http://www.h1base.com/content/f1visa

These companies who claim that they’re dependent on immigrants for the skills they need are trying to pull the wool over your eyes.  What they need are STEM graduates and they get them from American universities.  They like the fact that foreign students contribute to a glut of labor that helps to keep their payroll costs suppressed.  When Apple claims that, if immigrants aren’t allowed to travel freely to work in the U.S., then they might need to relocate to where they can have easier access to immigrant labor, that’s a “crock” and they know it.  Go ahead, Apple, move to Yemen or  Iran or Libya or one of those other countries, and let’s see how successful you can be there.  What you really need are the STEM graduates of American universities.  You won’t find them in those other places.  But what you will find are poverty, illiteracy and oppressive governments.  But you say you can do better there.  So prove it.  Just leave.  Go ahead.  Go.

There’s a mind-numbing amount of information in these links.  Let’s boil it all down:

  • Immigrants currently fill 1.2 million of the seats available in American universities.  That’s a significant percentage of the seats available.
  • Approximately three quarters of foreign students who apply are accepted.  Compare that to the acceptance rate for American students at most prominent universities, where only 10% or fewer attain admission.
  • Why the preference for foreign students?  Because they pay full tuition, propping up the ridiculous rate of tuition increases.
  • Foreign students are given preference over American students because of their ability to pay.  This effectively shuts American students out, especially from STEM curricula.
  • The influx of foreign students actually counts as an export of services.  Can you believe that?  It’s one of the tricks used by the government to draw trade dollars back into the U.S. economy and to keep our trade data from looking even worse than it does.
  • University sports teams have also gotten in on the act, now recruiting foreign students through the “student” visa program, denying athletic scholarships to deserving American athletes.  When it comes time for the Olympics, those athletes, trained in America, compete for their home countries, leaving the American teams thin.
  • Almost half of foreign students then go on to work in America, shutting American students out of those jobs as well.
  • The student visa program feeds into the H1-B visa program, which then begins to feed many of the other immigrant categories such as immediate relatives and family-sponsored preferences.

OK, remember the above list of countries that send the most students?  Did you notice anything about that list?  Did you notice that it includes the countries with whom America has the biggest trade deficits?  That should give you a clue as to where these foreign students are getting the money they need for tuition.  Their parents are getting rich on manufacturing for export to the United States.  What this means is that, in addition to taking your job, they then use your money to pay for their kids to come over here and take your kids’ jobs too!  Can this scheme possibly get any more outrageous?

If you’re an American student who hasn’t been able to get accepted into the school or program of your choice, the student visa program is probably the main reason.  If you’re a recent graduate and find yourself now saddled with crushing student loan debt, you can blame the student visa program for propping up ridiculous tuition rates.  And if you now find yourself struggling to find a job, you can once again blame the student visa program.

The student visa program is an outrage perpetrated on unsuspecting parents and students, depriving them of opportunities to help America out of its trade-created cash crisis, to help greedy universities prop up inflated tuition rates and to help corporations suppress wages with a labor glut.  It has to stop.  No foreign student should be admitted until every last American kid who wants a college education has gotten a seat in a university.  President Trump … please … take a close look at the student visa program and rein it in.


Davos: A Monday Morning Staff Meeting …

January 17, 2017

…at a company that went bankrupt on Friday.  Other analogies come to mind:  an emergency meeting of the damage-control committee on the Titanic.  A meeting of parasites as the sick animal host walks away following a dose of antibiotics.

The participants at Davos stare across the table at each other, carrying out their agenda in robot-like fashion, but knowing full well the reality of the situation they now face.  They’re irrelevant – vestiges of a failed experiment staggering along in a zombie-like state.

As reported in this Reuters article, their agenda has taken on a new theme.  They’re suddenly, but disingenuously, interested in the fate of American workers who’ve been left behind by their globalization regime:

The titles of the discussion panels at the WEF, which runs from Jan. 17-20, evoke the unsettling new landscape. Among them are “Squeezed and Angry: How to Fix the Middle Class Crisis”, “Politics of Fear or Rebellion of the Forgotten?”, “Tolerance at the Tipping Point?” and “The Post-EU Era”.

This morning, the meeting opened with an address by Chinese president Xi Jinping, in which he declared that “no one will emerge as a winner in a trade war.”  It’s ironic that the biggest winner in today’s trade war (and make no mistake, that’s exactly what we’ve been in for decades) would lecture the biggest loser – the U.S.  It’s no different than if Japan’s Emperor Hirohito had lectured America about standing up for itself in the wake of Pearl Harbor.

He went on to denounce “protectionism,” conveniently ignoring the vast network of protectionist measures employed by his own country.  Like all participants at the Davos forum, Xi likes to forget that the enforced flow of jobs from America to China and other nations unable to grapple with their bloated labor forces, denying America the ability to engage in trade deals that are mutually beneficial – is a rigged system that it has dubbed as “free trade.”  And it decries the freedom to operate our economy as we see fit as “protectionism.”

The winners in the World Trade Organization-enforced regime, China being the biggest winner, frequently declare that trade deficits don’t matter.  If that’s true, then they shouldn’t mind taking their turn at it.  Your turn, China.  It’s time for you to relinquish your trade surplus with the U.S. and suffer a deficit for a while.  Then let’s see how you feel.

 


On Tariffs, Indications are Trump Means Business!

December 22, 2016

http://www.reuters.com/article/us-usa-trump-navarro-idUSKBN14A27N

http://www.cnn.com/2016/12/21/politics/donald-trump-tariffs/?iid=ob_homepage_deskrecommended_pool

I’ve provided links above to two articles reporting on some very important developments in the Trump transition that have taken place over the last two days.  First of all, Trump has chosen a real trade hard-liner, Peter Navarro, University of California economics professor and author of Death by China: How America Lost its Manufacturing Base, as head of a newly formed White House National Trade Council.  The second article reports that the Trump team is planning to slap up to 10% tariffs not just on imports from China, but across the board on all imports.

These developments are an indication that, instead of merely pandering to populist sentiments during the election, Donald Trump was deadly serious when he made trade the centerpiece of his plan to “make America great again.”  Never mind threatening to label China a currency manipulator, complaints about unfair trade practices, enforcement actions taken up with the World Trade Organization, or any of the other mamby-pamby “actions” taken by previous administrations.  It now appears likely that Trump will go right for the jugular.  A 10% across-the-board tariff on all imports would be a death blow to globalization.

To put such a tariff in perspective, in 2015 the U.S. imported $2.76 trillion worth of goods and services.  A 10% tariff would raise $276 billion per year in federal revenue.  Opponents say that this is actually a huge tax on American consumers.  They’re lying.  Tariffs are paid by the companies who ship the products to the U.S.  Those companies then have a choice.  They can try to maintain their profit margin and pass it along to consumers, but that opens the door to domestic manufacturers who could undercut them on price.  Or they can “eat” the tariff and not raise prices, maintaining their market share but eroding their profits.  Either way, there’s a huge incentive to shift manufacturing to the U.S.

Consider another benefit.  That increase in federal revenue can be used to fund an equally large cut in income taxes for American taxpayers.  So, even if the importing companies pass along the cost of the tariff, you’ll have that much more money in your pocket to cover the higher cost.  Essentially, the tariff takes the money right out of the pockets of the global corporations and puts it into the pockets of walk-around Americans.  For all of you who have railed against the worsening income disparity between the top 1% and the rest of us, this is exactly the right way to go about addressing that problem.

For those who doubt the effectiveness of tariffs in boosting domestic manufacturing, consider this:  in spite of the fact that U.S. automakers lost half of the domestic market to imports, nearly every truck on American roads is still built in the U.S. Why?  Because trucks are one category of product on which the U.S. still maintains a 25% tariff.   Without that tariff, it’s likely that most trucks would now be imports and the “Big Three” automakers may not have survived.

Brace yourself, folks.  All hell is going to break loose on January 20th!  It’s been a long time coming and it’s going to be fun to watch.  I can’t wait.


Some Observations about Trump’s Transition

November 25, 2016

The following are some random thoughts and observations about the unfolding transition of Donald Trump’s presidency.  (I still can’t believe I’m writing those words.)

  • Wow, for a guy pushing 70, this guy has a motor!  I stayed up the night of the election until it was clear he had won, which happened about 3 AM on the morning of the 9th.  I was exhausted for the next several days.  Not Trump.  Two days after the election he was at the White House to meet with President Obama and then on to Capitol Hill for a series of meetings.  The next day he launched into an endless stream of meetings with potential staff members – up to twenty meetings a day – and still had the energy to be “tweeting” at 3 o’clock in the morning.  Yesterday – Thanksgiving Day – he was even on the phone with the CEO of the Carrier Corporation trying to convince them that moving their manufacturing operations to Mexico was a bad idea.  The guy is clearly a workaholic.
  • In order to push forward his agenda, he needs a cabinet staffed with like-minded individuals, not a “team of rivals” as some have suggested.  I’ve been pretty pleased with his picks thus far, but I really hope he doesn’t pick Romney for Secretary of State.  Romney might soothe ruffled feathers among traditional Republicans and calm nerves among foreign leaders with his polished style and globalist outlook, but that’s not what Trump needs.  He needs someone who can look China in the eye and tell them “tough s___” when they complain about Trump’s trade policy.  That’s definitely not Romney.  Giuliani would be a much better choice.
  • Trump has softened his stand on illegal immigrants somewhat, vowing to deport or incarcerate 2-3 million of the worst among them, but expressing a willingness to “consider” the rest.  I’m OK with that as long as he “builds a wall” or takes whatever other actions are necessary to put a halt to illegal border crossings and to immediately deport those who still do make it across.  A pleasant surprise has been his vow to also crack down on some legal immigration, like the H1B visa program which is designed purely to hold down wages.  The program, and others like it, should be completely eliminated.
  • Early on, Obama began assembling a team of economic advisors, mostly academics, largely from Harvard.  No wonder his vow to tackle the trade deficit was quickly abandoned.  So far I’ve heard none of this about Trump’s transition team.  Unless I’ve missed something, there hasn’t been a single mention of an “economic advisor.”  Good.  He doesn’t need any.  His economic plans are right on target and he would be hard pressed to find any economists who wouldn’t steer him in the wrong direction.
  • So far, his plans to impose tariffs on Mexico and China, though a huge step in the right direction, are too timid.  Tariffs on auto parts from Mexico will only make U.S. auto manufacturers less competitive with imports from Japan, South Korea and Germany.  Tariffs on Chinese imports will only move manufacturers to India, Vietnam, Indonesia and other countries with huge labor forces.  To be successful, he needs to extend his tariff plans to include all products from all such countries.
  • I’ve heard some pundits proclaim that some manufacturing jobs won’t come back to the U.S. no matter what he does with trade policy.  That’s absolute nonsense.  If tariffs raise prices to the point where products can be made profitably in the U.S., then someone will seize the opportunity and do exactly that.  For example, if Apple doesn’t move its i-phone manufacturing back to the U.S., then someone else will soon undercut them with cheaper and better phones made right here in the states.
  • Manufacturers who have moved to China might be wise to not even wait for tariffs to be implemented.  They’d be smart to move their equipment back to the U.S. before China prevents such moves.
  • Despite all the fear-mongering by free trade and globalization cheerleaders about the dangers of “protectionism,” investors seem to be betting on the opposite.  In fact, we see the same thing happening in Britain in the wake of “Brexit.”  I’m reminded of an old saying:  “Money talks and BS walks.”
  • The media has been wringing their hands over potential conflicts of interest with Trump’s vast and far-flung business empire.  It’s a potential concern, but everyone knew it when they voted for him and it’s not something he can divest overnight.  Let’s give it time to play out.
  • Trump’s not an inspirational orator like Obama has been.  That’s OK.  I’ll happily trade that trait for someone who can get things done to fix our immigration mess and our idiotic trade policy.

There should be no misconceptions that this will be anything but a wild ride.  It’s going to be absolutely fascinating to watch it play out and, if he follows through on his campaign promises on immigration and trade, we’re going to witness a transformation in the U.S. economy that no one even thought possible.


How the Global Elite Sewed the Seeds of Trump’s Victory and Their Own Demise

November 23, 2016

With each passing day since the election I am more amazed than the day before at what I see happening as the Trump administration begins to take shape and at the reaction from world leaders, the business world and political pundits.  I have a lot of thoughts I want to share about what this all means but, before getting into all that, I thought I’d share another take on just what happened with this election – a “take” that I haven’t heard from anyone else yet.

As global corporations began the process of implementing the New World Order that had its genesis in the signing of the Global Agreement on Tariffs and Trade in 1947 – especially as the process accelerated first with the signing of the North American Free Trade Agreement, followed closely by the admission of China to the World Trade Organization, both events occurring during the Clinton administration – the painful process of passing out pink slips to American manufacturing workers got underway in earnest.

With nothing more than a small severance check and, perhaps, some “job re-training” (to do exactly what was never clear), millions of people were suddenly faced with the question, “now what do I do?”  They began with the obvious – look for another job.  When that didn’t work, more and more people tried their hands at starting their own businesses. It stimulated an interest in entrepreneurism like we hadn’t seen before.  People sought out the advice of successful entrepreneurs and began to revere the most successful among them.

The appetite for entrepreneurial advice didn’t escape television executives.  Never one to miss an opportunity, enter Donald Trump and his reality show “The Apprentice,”  which first aired in January of 2004 and has run continuously since then in various formats.  Viewers were awed by his business instincts, his ability to see through phoniness and identify those with real ambition, and his ability to win at business.  For people who had been exposed to the lies and BS that were standard fare used by corporations to justify the sacrifice of their jobs on the altar of globalism, this was refreshing.  This was someone they could admire.

What the global elite didn’t anticipate was that they were making a hero of a fabulously successful entrepreneur who didn’t need their money, one with political ambitions and one who, for whatever reason, seemed to have an affinity for the working class.  I’m reminded of the natural world where imbalances have a way of correcting themselves.  If a population of some species grows out-of-control, other forces have a way of reining it in.  In the same way, when the global elite concocted a system that helped some at the expense of others, they unwittingly sewed the seeds of that system’s own demise.

 


Are Americans really ready for what’s to come?

November 16, 2016

Some have described the election of Donald Trump as a “political earthquake.”  That doesn’t begin to describe it.  A more fitting analogy would be the asteroid that struck the earth millions of years ago, wiping out the dinosaurs and most other living species.  The world was forever changed.

Sure, the sun came up the morning after Trump’s election and normal life resumed.  People living off the grid would never know that anything had happened. But fasten your seat belts, folks.  You haven’t felt it yet, but the blast wave from that asteroid strike is on its way.  If Trump implements the trade policy he promised during the campaign, we’re in for a very rough ride.  I’m afraid that few people really comprehend what’s coming.

Don’t get me wrong.  It needs to be done.  If Trump doesn’t do it, America will continue to be sucked into the vortex of the poverty-sharing scheme of globalization until we have nothing left.  Incomes will continue to decline.  Health care and college educations will become even less affordable.  Forget any dreams of a secure retirement.  Infrastructure will crumble further while the national debt soars.

So it has to be done, but entire economies – big ones – have been built on manufacturing for export to the U.S.  Globalization won’t go down without a fight.  It’ll begin with sniping from every corner of a vast network of globalization cheer-leaders that support their special interests, including the World Bank, the International Monetary Fund, the World Trade Organization, national leaders, CEOs of global corporations, the U.S. Chamber of Commerce and its local chapters, and economists who can’t come to grips with the notion that everything they’ve learned, taught and fought for was wrong.  Based on past experience with presidents over the past several decades, it’s hard to imagine one that could withstand such withering criticism.

But that’s nothing compared to what will follow.  It seems that Mexico is the first one that Trump has in his cross-hairs.  They may try retaliatory trade sanctions, like big tariffs on food exports.  But they don’t have the wherewithal to present real problems.  China, however – who the Trump administration will turn its sights on next – is another story.  They’ll try retaliatory trade sanctions first but, when you’re the nation with the huge trade surplus, it’s impossible for China to win a trade war.  The thing that Chinese leaders fear the most is not the U.S., but civil unrest among its own people.  Big tariffs on Chinese exports to the U.S. would shift the now-booming Chinese economy into reverse.  Conceivably, it could collapse their economy.

The Chinese people have become conditioned to feel entitled to a booming economy and to preying on the U.S. market.  They’ll be angry as hell and will demand action from their government.  Rioting may break out.  In its death throes and desperate to placate their demands, the Chinese regime may turn to military action.  It’s impossible to predict how something like that might unfold.

There are those already saying that tariffs against Mexico can’t work – that forcing the manufacturing of American cars and parts back into the U.S. will only make them uncompetitive with other auto imports.  And they are right.  In order to succeed, Trump will need to expand the use of tariffs to include other countries like Japan, South Korea, Germany and others.  Now we’ll have more unhappy campers who may be willing to form a new alliance against the U.S.  Are Americans prepared for this?

And are they prepared for some gut-wrenching changes in our own economy?  It’s true that tariffs will drive up prices for U.S. consumers and, in many cases, there are no American manufacturers ready to fill the void.  It’s going to take some time to design, build and start up new plants.  Will Americans have the patience to endure a burst of inflation and very likely a recession until wages catch up and offset the higher cost of goods, or have we become too spoiled for that?

I wonder if even the most strident Trump supporters have anticipated these ramifications and whether they’re willing to endure the pain.  It’s easy to say “make American great again” but making it happen is going to be a long and very difficult process.    It’s going to take a virtual war-footing mentality among Americans.

And what about Trump?  Will he be a strong enough leader to maintain the support of the people through all of this?  Based on what we’ve seen from Trump, we can expect that, when foreign leaders lash out at him, he’ll hit back just as hard.  No one should doubt his ability to win.  It’s the American people I’m more worried about.  Will they be ready to jump ship at the first sign of adversity, or are they tough enough to stand by Trump and see this through?

 


Ford Moving to Mexico; Trump Says He’ll Stop It

September 15, 2016

http://money.cnn.com/2016/09/15/news/companies/donald-trump-ford-ceo-mark-fields/index.html

The above link will take you to an interview conducted by CNN’s Poppy Harlow with Mark Fields, Ford CEO.  If you have the patience to watch it all the way through, it will be immediately followed by further discussion of Trump’s plans to raise tariffs and bring manufacturing jobs back to the U.S.

Trump has long predicted that Ford would be announcing its move to Mexico.  Fields responds that they are only moving its small car production – the Focus and the C-Max (both made at Ford’s Dearborn, MI plant) -to Mexico.  Other models will continue to be made in the U.S.

Ford actually sells six car models:  Fiesta, Focus, C-max, Fusion, Mustang and Taurus.  The Fiesta and the Fusion are already built in Mexico.  Ford’s announcement about the Focus and C-max leaves only two of its six car models that are still made in the U.S. – Mustang and Taurus.  The former is built at its Flat Rock, MI plant and the Taurus is built in Chicago.  Most of its SUVs and trucks are built in the U.S.  There’s a good reason for this.  The U.S. continues to maintain a 25% tariff on all imported light trucks.

The Transit Connect is an interesting exception.  Until 2013, Ford imported the Transit Connect, a vehicle it markets as a commercial van/truck, from Turkey, trimmed out as a passenger van.  It then strips out the passenger interior, removes the windows, and replaces them with metal panels, converting it into a commercial vehicle.  It did all of this to escape paying the 25% import tariff.  In 2013, the U.S. ordered Ford to stop this practice.  Ford still does it, but now it pays the tariff.  It “eats” the cost of the tariff.  It doesn’t pass it on to the consumer.

If elected, Trump has vowed to essentially tear up most trade deals – particularly NAFTA, and will raise tariffs to force companies to re-establish their manufacturing operations in the U.S.  In the case of Mexico, he has suggested a 35% tariff.  During the linked interview, Ms. Harlow asked Mark Shields directly whether he would still move manufacturing to Mexico if that were to happen.  Shields side-stepped the question.  But the answer is obvious.  Of course Ford would not move more production to Mexico if that were to happen.  Quite the opposite.  Production of the Fiesta and Fusion would also return.

Late in the interview, Shields cited the huge savings in labor costs for the move to Mexico, saying that it needed to be done to remain competitive in that segment of the market.  Ms. Harlow failed to follow up with the obvious question:  “So you’ll be reducing the price of the Focus once production has moved to Mexico?”  I would have loved to see him squirm and see the smirk run away from his face when he replied that the price wouldn’t change a bit.

Has any company ever cut the price of any product once its production was moved overseas?  Of course not.  They pocket the extra profit.  Which brings us to one of the arguments employed by economists (and cited in the 2nd CNN segment which starts immediately after the Mark Shields interview) that prices will rise and consumers will be forced to pay the tariffs, hurting the economy and cutting deeply into consumer spending.

That’s absolute nonsense.  Consumers don’t pay the tariffs.  The importing companies pay the tariffs.  Whether or not they elect to pass that extra cost along to the consumer is entirely up to them.  As we saw above with the Transit Connect, Ford doesn’t pass it along.  Sure, that would cut deeply into profits.  By far, the smarter alternative is to move manufacturing back to the U.S.

During the course of the interview, Ms. Harlow repeats a myth about tariffs and their role in the Great Depression.  “… the last time a big tariff was instituted in the United States back during the Great Depression, all the economists agree that it made the Great Depression worse.”  I’ve said it many times but it bears repeating here:  that’s factually false and is absolute nonsense.  First of all, no new, big tariff was implemented during the Great Depression.  The Smoot-Hawley Tariff Act of 1930 was a very slight tweaking of the  Fordney-McCumber Tariff Act of 1922, raising tariffs overall from 38.5% to 41.4%.  Following enactment of Fordney-McCumber, the economy boomed during the “roaring ’20s.”

By the time Smoot-Hawley was enacted, the Great Depression had already been underway for a year.  During the Great Depression, America’s balance of trade declined by less than $1 billion while GDP fell by $33 billion.  To blame tariffs for the Great Depression is ludicrous.  But that didn’t stop economists from doing it, eager to make a case for their new, untested theory about “free” trade.

In the CNN piece following the Mark Shields interview, CNN reports on dire warnings by economists that Mr. Trump’s tariffs would have disastrous consequences for the economy, cutting GDP by up to $1 trillion and would result in the loss of 4 million jobs.  Such claims are really puzzling, given the fact that economists know very well that a trade deficit is actually a subtraction in the calculation of GDP.  It’s impossible that bringing back manufacturing would do anything other than boost GDP dramatically.  Merely balancing trade in manufactured goods would be an $800 billion boost to the economy.  That would be a 4% jump in GDP which, not coincidentally, is what Trump has targeted for economic growth.  Any further surplus in trade in manufactured goods would boost the economy even more.  And instead of cutting 4 million jobs, it would actually create approximately 10 million jobs.

Free trade advocates claim that manufacturing jobs don’t matter any more, that most manufacturing is automated and there are few jobs there to be had.  If that’s true, then why do so many badly overpopulated nations with huge, bloated work forces cling so desperately to the manufacturing that they do for the American consumer?  Certainly, automation has improved productivity in manufacturing, but not nearly to the extent that free traders would have you believe.  Consider the production of the supposedly high-tech cell phones like the i-phone.  Their manufacture is about as low tech as you can get – thousands of people assemble the circuit boards by hand in China.

During one of the CNN segments, the reporter comments that “cars aren’t really built from scratch any more.  They’re assembled.  Those plants in Mexico will be assembling them from American-made parts.”  As if the process of assembly requires no effort, and as if cars haven’t been built that way since Henry Ford invented the assembly line.  I can tell you from personal experience, having toured the Dearborn plant where Ford builds the Focus, that it takes a lot of workers to make an assembly plant “tick.”  Watching a stack of sheet metal being turned into a finished automobile in less than 24 hours is truly awe-inspiring.  Having toured both auto assembly plants and electronics manufacturing, I can tell you that an auto assembly plant is far more “high-tech” than electronics production.

Trump’s plans to use tariffs to return manufacturing back to the U.S. is exactly what the American economy needs – and is exactly the thing that globalists fear the most.