Paul nails it again. Paul, give the dems an economic plan to knock this turkey off his perch.
18
The hogs voted Trump in. Now they're facing unemployment. Something for nothing. Tariffs for jobs, why not? Another truth based upon an alternative fact.
13
Trump got elected by sucking up to the "base". Now behold, what with jacked up tariffs on goods coming into the US, combined with trading partners jacking up their tariffs on US goods being exported into their countries, looks like jobs promised the "base" will become more and more of less and less, and Trump's sucking up to the "base" will turn the "base" into suckers.
9
Trump has to be removed from office somehow. He is against America & is about to destroy NATO and strike illegal deals with Putin.
9
The trump said trade wars are easy to win. I expect his next comment will be, " This is like health-care: no body knew trade was so complicated."
7
All true, Professor Krugman. Contrary to the big, fat lies Trump has been telling about how easy trade wars are to win, we’re going to see precisely the opposite. None of our former allies (Germany, France, Canada, etc.), and certainly not China, are going to fold their tents just because Trump thinks he can wave his magic wand.
As for “economist” Kevin Hassett (formerly of the scary, right-wing American Enterprise Institute), his claim to fame was co-authoring the thoroughly embarrassing book “Dow 36,000.”
All I want to know is: what bigger, fatter lies are Trump and Fox “News” going to tell Red State voters when manufacturers can’t sell their bourbon, soybeans, and so forth to overseas markets, and Red State jobs disappear.
8
With Harley-Davidson and now GM leaving the US in the dust, maybe those who forget Smoot-Hawley are condemned to repeat it. Does "it" mean another Great Depression?
7
Paul, China is hurting now to. It's a rapidly falling Bull Market over there. Let's just settle this like mature adults and do away with all tariffs. A totally free market, letting the chips fall where they may with real competition. But let's eliminate loopholes and punish corporate tax evaders with the full extent of the law.
Putin means to be Czar of as much of the World as possible, a 21st. century Napoleon. Trump is his man in America with orders to help make it so. Trump is smashing the US so that there is no nation strong enough , equally armed to stand in the way of the wannabe Russian Emperor.
4
What a nightmare a Trump Presidency is!
So many self inflicted wounds in his incoherent economic and trade policies. I fear chaos and recession and worse. Just an ugly miserable world!
7
The only thing that the President understands if any punitive damage is inflicted on his business empire. By the time he is out of office, his assets would be atleast 1000 times when got into the office.
If EU or Chinese are smart behind the back they should hurt his business!!!!
2
Tariffs are like taxes on foreign goods, they end up being passed off to the consumer government gets income, consumer see price rise. This is especially true after reciprocation. The major difference is of course if a country can rearrange its production at higher cost so that its all domestic then on this production there is no direct tax but results in workers possibly being paid more because of increased demand. Countries who cannot arrange internal production or farmers selling mainly to export markets of course suffer more. For farmers it ends up incentivizing crops which can be sold internally. One has to view gloom and doom about tariffs with a bit of skepticism: After all the U.S. choose to protect its manufacturing from foreign dumping up to WWII without going bankrupt. What Trump implicitly says is that U.S. manufacturing is probably now weak and needs protection which is true as long as multinationals will continue to hire in U.S. when given a choice.
I'm not an economist, just a regular dumb American... but I cannot follow anything you say:
if US businesses reap any kind of reward from imposition of tariffs on imports, how would that lead to increased domestic demand when we already know any financial benefit - which given international supply chains is probably a chimera - will be passed through to shareholders as value?. you couldn't be suggesting businesses would increase wages, could you?
the runup to WWII was the great depression, and we did go broke, thanks to Republicans and their bad ideas on tarriffs, among other causes.
the rest of your points are similarly - again, to a regular person with no economic training - farfetched, to say the least.
the short story is Trump and his enablers are know nothings who don't learn from history, ideologues disconnected from reality but addicted to the adulation of crowds even more ignorant and delusional than they are.
all except Wilbur Ross, who is playing the whole country for fools.
7
I find myself wondering, with the daily outrage, if this is how the Republicans win. Democrats feel outraged, and protest, and perhaps feel they have expressed themselves. Meanwhile, the Republicans go to the polls, vote, and do whatever they want. Democratic outrage doesn't speak to the people that are voting Republican.
We had an off year election in our town, with 35,000 registered voters. Around 15K actually voted. Why?
10
It's a typical problem in any democracy where not voting isn't illegal.
Conservatives tend to hate the government, so when Republicans control it, they actually don't expect them to accomplish a lot, they just want them to "reduce" the government, and often are already happy when newspapers write that they're eliminating "regulations" and cutting taxes. Add to that some more restrictions on social issues, and they're happy.
At the same time, they fear nothing more than "the" government, AND are convinced that Democrats want "big government", which they associate with tyranny, tons of waste, and useless regulations stiffening all individual initiative and power.
So for them, having the Dems losing elections is ALREADY a huge achievement in itself (look how many conservatives today for instance agree that Trump isn't behaving very well, but then, they add, at least it's not Hillary ...).
Now compare that to the majority of the country, which agrees with the Dems on most issues.
That means that most voters know that if well used, the government can actually improve a LOT of things, on all levels. So they hear Dem politicians talk about those ideals, get enthusiastic, and vote for them.
But then ... ignoring that achieving something in a democracy is only possible through compromise and that all real progress is step by step progress ... they loose all hope when change doesn't happen overnight, imagine that all politicians must be corrupt, and stay home next time ...
5
Maybe this will push everyone toward actual free trade - no tariffs on anything worldwide.
2
With Trump, rich guys are trying to have their cake and eat it too. It isn't going to work. The correct way to make the US economy vibrant is to raise taxes on the rich, not cut them. Then the federal govt will borrow less, and over time investors will look for job-creating private investment opportunities that strengthen the economy and federal bottom line. The economy is arguably as vibrant as it is now because of the trends set in motion during the Obama administration, but interest rate hikes, gas price hikes and tariffs are likely to turn it downward.
11
Donald Trump, during the 2016 campaign, often made me think of stereotypes associated prosperity preachers. He always mentioned his wealth, and he arrived in a jetliner with name on it. His supporters clearly looked at the display and assumed he knew how to make money, and sure enough, President Trump does know how to make. Leasing his name, selling branded clothing (made in China)
7
I think everything Trump does, from putting children in internment camps to threatening trade wars, is about politics. Trump has no idea what the economic consequences of tariffs are, and I don't think he cares. He cares about energizing his base, and in so doing protecting himself from the consequences of what he knows the Mueller investigation will find.
He is primarily a salesman (as is every New York con artist). If his trade war proves disastrous, he'll spin his base by putting the blame elsewhere, probably on Europe. One goal of his appears to be to undermine the Atlantic Alliance, so both disaster and success can play to his purpose.
6
Harley Davidson (HOG) is a publicly traded company with a board of directors and shareholders expecting fiduciary responsibility, not American patriotism. The company must act to preserve and extend markets and profitability or risk lawsuits and damage claims. Executive compensation is likely tied to some combination of these elements as well as minimizing operating costs and especially taxation and duty costs. Trump literally has no influence over the rules that will govern HOG's decision making.
9
I stand by the view of Paul Krugman from March 2016, when he argued persuasively that trade wars, while they may reduce economic efficiency, DO NOT cause recessions. As Dr.Krugman said then, it is just "bad international macroeconomics" to think so. See here:
https://naimisha_forest.silvrback.com/trade-war-won-t-cause-recession-sa...
Trump's model of reality is as defective as his advisers are hopeless. But why expect more of a serial bankrupt who never learned to read or spell or pay attention to a briefing? He lives in delusions that his will is supreme, adversaries and enemies will yield at once to his threats, and his inauguration was attended by the largest crowd ever, period. Bullying, lying, threatening, bribing, and cheating are Trump's strengths: he has no others, and made money using them. He expects to succeed as president doing the same to make even more money than ever before, and serve Putin's agenda. Perhaps he hopes for large pay-offs from Putin as well?
11
Trump has strengths you neglect to mention that have served him well in business and politics:
he is tall, always an asset, especially when combined with a domineering personality.
and, he had the good sense to be born with a silver spoon in his mouth.
3
Trump and his adviser Stephen Miller are better suited at bullying immigrant women and their children.
When it comes to trade, the contenders are hardened individuals that are not phased in the least by bullies.
15
Does anyone really think that Trump knows, cares, or understands economics?
20
The message the president is sending to corporations is very simple. My policies are totally unpredictable, and you need to be ready to react quickly. The best way to do this is to locate some of your factories in the EU and some in Asia, so you can shift production around to adapt to the totally irrational tariffs. It has been a worldwide economy for some time now and in the the end we may see a few more "Made in America" stickers in America, and dramatically fewer "Made in America" stickers overseas. We will also see significantly higher prices for manufactured goods in America.
10
Donald Trump’s base of deplorable will cheerfully watch their own families starve so long as he keeps pandering to their racism and xenophobia. Think of the famous LBJ quote about the “lowest white man” (first quoted here by Dr. K himself a while ago?)
13
Why don't Trump's supporters understand that Donald Trump is one of the biggest losers when it comes to business acumen? He has faced bankruptcy 6 times, including a hotel in Manhattan and one in Toronto. He basically lost all his daddy's $200 million in the early 1990s and puttered around NYC for a few years living off of borrowed money from his relatives. Until he got the gig on The Apprentice, Trump was nearing personal bankruptcy. The producers of The Apprentice tell the real story about Trump. It is scary. The Donald Trump from that reality show was a fictionalized version of the real Trump, the loser. How did Trump fool so many people? How is it that a sleazy, depraved Real Estate hustler from NYC end up in the White House? Ask Putin.
35
And McConnell and Ryan
6
better yet, ask disenfranchised, fearful, superstitious, biggoted, poorly educated voters in rustbelt and rural districts who were on the lookout for someone to loudly voice their preexisting feelings and pander to their demolished egos.
also, the obsolete Electoral College.
7
I think we need a test for would be Presidents to pass. Imagine having a doctor operate on you with no credentials. An unfit President can cause a lot more chaos than a doctor who has no credentials. He or she can destabilize the whole world.
13
So glad Prof. Krugman, that you continue to not pull any punches in calling out this extraordinarily incompetent, uneducated, group of ideological three year olds. Thank you!!!
17
Since the tariffs hitting the bottom line, do the tax cuts also make it easier to offshore production now that it seems less of a hit on bringing money back into the U.S.?
3
Putin tells Trump what to do to ruin the American economy and the international order of things. Anybody who doesn't understand this now is willfully deaf and blind.
17
So many experts -- and still no luxury tax on luxury goods e.g. multi-million dollar paintings sold at auction and if put on public display for six months, no state tax either.
At least the tariffs -- a tax for the little people are right up front. There are all those hidden taxes on gas, on utilities, on this and that (hidden cause we don't know about them). Sugar and milk are supported products...no free market there.
.
Frankly, IMO less of a consumer economy aka it's all garbage -- recycling is a major joke -- would be a good thing. Obesity and sedentary life styles have lead to a nice rise in certain diseases.. and Congress's law about Medicare NOT negotiating drug prices. Why pick on just one thing??
4
You might want to read up on stuff. It might form an actual coherent position on Tariffs.
The only real investment of tax savings has been to increasing dividends and stock buybacks. Wages have barely budged, even with low unemployment numbers. Wait until the tariffs start to take effect, things will slow down. Midwest weather is also going to harm crop yields, squeezing the farmer even harder.
8
Trump really should’ve looked to the future (meaning the midterm elections) before he started the steel tariffs. Give it a couple months and his base will be marching down main streets everywhere when everything they buy is costing more than it used to. The republicans that are in election years must be a little nervous about what’s happening and where things are going. I’m sure it’s going to hit Canada’s bottom line up here too if it is a prolonged trade war. Time for Americans to show up at the polls in force, I believe, and fix this mess up.
14
Trump has the impulse control of a 6 yr-old in a candy store.
5
Contrary to Krugman's conclusion, it seems to me the Harley story does tell us one good thing, or as at least hint at its possibility: Trump may well cave. For Trump it's not about substance, it's about appearance. As for example his claim that North Korea is no longer a nuclear threat, even though nothing substantive came from the summit fiasco. So ... one possibility is when the heat is on and Trump is losing his trade war bigly, he will simply declare that the U.S. has won and reduce tariffs, or at least stop adding more. As long as he actually believes his own nonsense and can spin it in a tweet, it's possible this will all end in a whimper. Of course the other possibility is that the trade war will get real bad and not end until Trump leaves office (hopefully sooner than 2025).
12
Trump is the classic "know it all" boss. These bosses do great damage to an organization. Employees become demoralized because the boss always has an answer and hates to be contradicted. Good employees head for other departments or other companies.
Expand this problem to an economy as large and complex as the US. Trump knows little about how the economy functions and even less about how publicly-traded companies function, yet he has answers for everything. Unfortunately, they are the wrong answers.
Trump has never studied history and as the saying goes: "those who fail to learn from history are doomed to repeat it." Trade wars are not easy to win and can cause irreparable harm.
17
Krugman omits one strategic possibility Trump may be employing. He's just yelling loudly for the American business audience. He wants to discourage other businesses from shipping production overseas PUBLICALLY, like HD did. (Quietly and privately? Who cares? Right?)
6
Interesting:
Trump is a weak president in a very strong country.
Putin is strong president in a very weak country.
When they meet, surely the big winner will be...
12
Trump seems to misunderstand the difference between a publicly held company like Harley Davidson and a family business like his.
Publicly held companies are accountable to boards and investors and make decisions about global business plans based on the long term interests of shareholders, taking into account most favorable trade policies by country.
Family businesses are accountable only to the family and can do whatever the family wants, rational or not, which is why Trump went bankrupt and has had to rely on foreign cash of questionable origin. Legitimate banks largely stopped lending to Trump, given his history.
Trump wants his supporters to believe he can personally command the private sector like his family business. His team claim huge increases in capital spending in the US since the tax cuts. But it has been driven by huge increases by tech companies that employ highly educated workers, while industrials are flat and agriculture continues to decline, due to greater risk introduced by Trump trade wars.
His supporters are likely to be disappointed by the results but unlikely to acknowledge it.
12
"His supporters are likely to be disappointed by the results . . ."
I wish it was likely, but I have very little hope that it will be so . . .
Since shortly after WWII, psychologists have been studying how it is that seemingly otherwise-normal people can round people up and herd them onto boxcars and send them off concentration camps (sorta like Trump's minions separating children from their parents and sending them off to "facilities") or systematically massacre old men, women and children, etc. What began as a study of fascism broadened into what now is called the authoritarian personality or the authoritarian worldview. We all have an intuitive idea of what we mean when we talk about authoritarian governments, but this body of research has yielded a very specific set of characteristics which define the authoritarian worldview.
One of those characteristics is total and unthinking support for those they choose to be their "authority." Literally, whatever their authority does is just fine with them. Remember Trump's claim that he could stand on 5th Avenue and shoot somebody and his base wouldn't care? He was absolutely correct. The last Gallup poll I saw said that Trump had a 90% approval rating with Republicans. They will support him through thick and thin. As long as the authority figure keeps throwing raw meat to "the masses," they will blindly support him and will be happy with everything he does . . .
3
Harley moves part of production to EU to cater for EU market and dodge EU tariffs. Surely EU based companies will do the same to dodge US tariffs? The Trump idea is I guess that the US market is bigger and more important than the EU market so that production moving to US will be larger than that moving out, on a net basis. What may happen though is a general reduction in jobs / productivity across the globe and no one actually wins. Another probable Trump calculation is that the US can withstand the pain for much longer than all others. While that may be true (a big may), there will still be a lot of unecessary pain and no net benefit, just a relative "benefit". He may call that a "Win" in his book. It won't affect him much.
6
Apparently, the art of the deal is to puff up and vent spleen. This master negotiator has no game. He can’t even bluff his way past the loss of a handful of jobs in defense of his own moronic policy. How do you win a trade war without a half-decent poker-face?
3
If you're waiting for Trump supporters to realize his policies are hurting them and drop their support, don't hold your breath.
Trump is the bully of bullies (a badge he wears with pride). And as with all bullies, he has a cadre of mindless followers that fawn over him. We all saw this in high school. These followers couldn't decide for themselves when to go to the bathroom. They would wait for him to tell them. He was their claim to fame. Their ticket to "be somebody".
This is the phenomenon we're seeing, only at a national level.
They don't care that their bully picked a stupid fight that they will probably lose. It just makes them feel good that we're fighting.
So it doesn't surprise me that Trump's loyal cadre will stick with him, no matter what may come. But what truly amazes me is how many of them there are. How did this country - the land of individual achievement that disdains collectivism - produce 10's of millions of such mindless bully-followers?
16
HOG is the acronym of Harley-Davidson Owners Group.
The backbone of this company is that despite the fact that Consumer Reports shows that there for every H-D motorcycle there is a one in three chance of a major breakdown compared to a one in TEN chance of a major breakdown with “rice burners” Japanese made Yamasakis and Honda.
Harley owners are faithful as 75% of owners will ALWAYS buy a Harley. The name evokes “America!”
Right! “Choppers--used in “Easy Rider” were chopped down versions of LAPD bikes with “a type of customized motorcycle usually defined by a stretched out wheel-base, and pulled back handlebars, and a sissy bar, and a wild paint job-“Captain America” was designed by Peter Fonda...and five black guys from Watts!
Those five black “artists” have been cut from every story made about these infamous choppers.
Harley-Davidson is a story that was stretched into becoming the ultimate “American bike” with its own fairy tale story.
https://www.npr.org/2014/10/11/354875096/behind-the-motorcycles-in-easy-...
Harley has such a bad history of breakdowns that Reagan had to impose a YUGE import tax of 49.4% on the Japanese bikes so that H-D wouldn’t go out of business.
H-D’s marketing IS the bike. That’s why I’ve always ridden a reliable bike-Hondas or Kawasakis.
Harley should have gone out of business decades ago, but the American ego REFUSES to see the bike’s problems.
It’s the epitome of the male ego--LOUD and shrouded from reality.
8
No surprise with what Harley executives are doing to be more competitive. Also no surprise in Trumps reaction. Hardly a day goes by where Trump doesn't get snookered by one of his stupid moves. Thanks to twitter, the public gets to read his rants and his ignorance is on full display. His staff is usually uninformed so he is frequently alone having to defend his nonsensical actions.
3
Weakness is Donald Trump's defining characteristic.
8
Trump's "view seems to be that since he schmoozed with the company’s executives and gave its stockholders a big tax cut, Harley owes him personal fealty."
How is this not bribery? How is this not coercion? Donald Trump is not running a company; a business. He is supposed to be running a government (I know, I know).
As you write, Dr. Krugman, Harley-Davidson is not a major employer if numbers are the sole consideration. But that's beside the point. What American company can have any sense of confidence that they are acting on behalf of their stockholders, employees and customers without presidential interference? I can't begin to imagine the Republican outcry had Barack Obama presented himself as a threat to any American company and pointedly demanded tribute and "fealty."
How is this not criminal behavior? Any fool can see where this is headed, especially under this president. He can threaten, by the power of his office, to presume upon any company at any time and for any reason if that company runs afoul of him.
"They will be taxed like never before." This sounds like Hitler or Mussolini or Duterte or Erdoğan or Kim Jong-un. Or, dare I say it, Putin?
The only ones pleased, other than the president, are the lazy, supine members of the House and Senate. Where are their voices for the industries in their cities and states that stand to, in effect, be threatened by this president unless they pay him a "tribute."
There's almost no turning back from this right turn.
7
Do Americans notice that they have a crazy man, a "nut", at the helm of their nation? I am not sure.
14
Mr. Krugman, I found your column on Harley Davidson's reaction to Trump administration policies enlightening, but I think you have a math error, or at least a typo, in the column where you say 250,000 people are hired each day in the U.S. economy. That would suggest there are about 65 million new hires per year (a new job every year for half the full-time work force). The chart to which you link at that point in your column indicates a rate of new hires about one order of magnitude lower than that.
Jim Gifford
Silver Spring MD
1
If Trump destroys the economy, he will lose popular vote. He has started dismantling that and everything else. Too bad the country has to be destroyed to get rid of this cancer.
4
Legacy of previous courts: a corporate entity is an individual with certain rights (I think this started just before 1910), now including the right to free speech. Try to get this individual in a civil court for cross examination. You will get mouthpieces who are not responsible either. If the so-called corporate entity is an individual it is god-like; in which respect cynics compare it to democracy, in that it is everywhere and nowhere. The chairman and officers of the Board nod wisely, for who in Congress can ignore the will of divine providence. Who among them will retard the march to its glory? ..A 'burst of dirty thunder'---hogs run free. They urinated on that tax cut and took turns riding over the torn colors...The boss never told anyone go do that. What kind of rules do you expect in a war zone?
Mark Twain reportedly said “It's better to keep your mouth shut and appear stupid than open it and remove all doubt."
In his narcissism, Trump does not seem to realize that having opinions and expressing them uncensored does not make you look smart. Perhaps he might try consulting experts and using their base of knowledge rather than merely his own uninformed biases in his policy making process? Who knows, if he made good policy people might believe he actually was smart.
1
So Harley Davidson is one of those unethical companies who endanger America by taking jobs overseas. Like those unprincipled soybean speculators. Shame!
4
"Governing by surprise."
That's what one of the "Good Germans" who didn't think Hitler was a danger said about him as the Nazis took power.
"Everything was about Der Fuhrer. He made himself inevitable. The truth was what he said it was and there was no disagreement and no debate. Those who resisted were taken away. The press was the enemy of the Fatherland. We were no longer German people. We became Hitler's people."
Trump is well past the point of being history's greatest error -- even displacing climate change given his suicidal abrogation of the Paris Accords. Blowing up the economy through capricious and delusional ignorance looks more and more like a small price to pay if it drives a wooden stake through the heart of Trumpism to end a collective and global nightmare.
Trump is defined by the crises he sows. Americans don't have to be. Remember in November. Or forget the future.
9
The headline should be "Pig versus Hog".
10
I worry about Trump and his "National security " proclamation. He is getting ready to create a phony crisis and sow hysteria with steel. Now he is meeting with Putin, probably to discuss more crises and have Russia create mischief.
This is history repeating itself. I am waiting for a Reichstag moment. Be afraid you people who are ignorant of history.
14
I keep asking trump-supporters "Why doesn't it bother you that he is a liar? Why doesn't it bother you that he is a bully?" I never really get an answer. Trump is a bully and a coward. There is something sickening about the president of the United States threatening anybody/everybody with the power of the federal government. This is the road to dictatorship.
9
"Only stupid people pay taxes". Thats Trumps personal mantra and if the GOP tax bill is any indication it is also the mantra of of the Republican party. Thats what will make America Great Again.
But only for the rich. Now we begin to see how that is playing out in the hinterlands. But don't worry, those of you who buy Trump's and Ivanka's trinkets made in China will still be able to purchase them.
9
The man in the White House is a clueless tyrrant with zero governance skill. The narcissist insults everyone but him and his corrupt family. He earned six medal of shame by six bankruptcies which gives us the idea of his management skill. The child bully has no clothe.
6
Last time I heard similar claim is when Republican blowhards said the Iraq war would pay for itself.
16
"But while it’s what you’d expect to see, and what I’d expect to see, it’s apparently not what Trump expected to see"
Because he complete lives in tribal terms. He does not accept that there are rules.
And beyond that: he is simply an idiot. But that's not news, is it?
3
The workers bought the con They can
wear their MAGA hats on the unemployment line.
15
For eight years Republicans screened economic austerity to weaken the recovery and thus weaken Obama. Once in office Republicans gave a huge tax cut to corporation with no real plan for structural improvements to the US economy, health care, infrastructure, things that would improve long term competitivenesss of the US. Now the implementation of crazy tariffs with no clear rational. Republicans are idiots. But Mitch McConnell does have another Supreme Court Justice, which supports the cosmology of white evangelical Christianity. After all we are a white Christian nation and with Russia we should be able to save the white race.
13
Always a voice if clarity and reality, Mr Krugman we owe you a debt of gratitude. Keep up the good work. This too, shall pass. Those who ignore history are doomed to repeat it, ergo: “It’s the economy, stupid”
5
Harley Davidson jobs are important because H-D is an American icon. Krugman knows this but he insists on being narcissistic. Please stop.
2
Trump's team is a mix of bad and awful. The only people he really listens to apparently are the idiots on Fox and Friends. So, intelligence and competence can't be any better than what Trump himself can muster.
6
And all of this from a four-time bankrupt, contractor stiffing, sued thousands of times, real estate failure turned money launderer and reality TV wind-bag.
That's rich.
8
It's not Trump's weakness we need to worry about so much as his stupidity.
3
When I grew up the flat head Harley made in America made a big difference to the Hells Angels who used to shoot dope and drink down by the river. If it aint made in America who Cares. For the the real deal you can still buy a flat head with a suicide shift. Trump shouldnt try and Kill Harley when they are busy committing suicide
1
What I really want to know is whether or not these "bikers for Trump" will start showing up n Suzukis.
2
I don`t want to burst everyone`s bubble but Harley is takin everybody for a ride. They closed their Kansas City Plant some time back and lied about moving jobs and production to their York Pa plant. They are already building a world class 500 cc overseas and their market is shrinking here in the US. Management are now spread sheet artists and could be selling popcycles just as well. If anything they are hoping their threats will get them some monetary protection.
2
The Honourable Chrystia Freeland is Canada's chief Nafta negotiator and is Canada's Minister of Foreign Affairs. Her resume in both economics and global understanding places her in the top echelon of the world's intellectual giants. She has served as Moscow bureau chief of the Financial Times and her Plutocracy: The Rise of the Global Super-Rich and the Fall of Everyone Else was a NYT best seller. She was honoured by Vladimir Putin by being barred from travelling in Russia.
Freeland has written op-eds for the NYT and the Globe and Mail and is the example of the kind of leadership that will be available when the USA abandons the western Alliance.
As a Canadian with deep American roots I am conflicted about Trump, he is a useful idiot who may manage to pull the USA away from dominating our future economy but he endangers our planet with his erratic and ignorant behaviour. I am sure there are other Chrystia Freelands out there who can create a better future for mankind but they will never be given a chance with the USA in charge.
https://en.wikipedia.org/wiki/Chrystia_Freeland
7
Hog farmers. Hog makers. What difference does it make to Trump. His ignorant trade moves are harming all producers in the U.S. now. He's never run a profitable company, not even counting the casinos he burned to the ground in bankruptcy. He has no clue what it means to run an actual public company, where you have to deal with shareholders who are looking for a decent return on investment. So Harley is damned if they do and damned if they don't.
2
I’m rooting for the Hogs....I certainly hope they don’t knuckle under to Trumps verbal punches...plus I’m pretty sure he can’t just arbitrarily “tax the hell” out of them.
5
The first delicate glove has been dropped. Wait until the heavy boot drops. t-Rump will be so busy going around and threatening every business while the country falls apart. Great leaser eh what?
Vote folks. Our lives depend on it.
6
Trump is a coward but a coward with a lot of power. That is never a good combination.
6
The Harley incident proves that Donald Trump and his associates are unbelievably immature and just plain stupid.
10
Paul, you are preaching to your choir and ignored by Trump's Here's a comment by one of them.
------------------
Trump is so beloved my so many, my friend, that people actually cry with admiration and love for him every time he has a rally.
We love this guy. LOVE. You can never, ever measure the 20-25% of the electorate that will not talk to you about their support for this man, yet will pull the lever in a mighty symbolic
Eff You to the entire frightened, unhinged, violent Democrat/Jewish liberal owned media monstrosity and the scared Hollywood actor-cowards frightened their producers will blacklist them, fascist style, should they dare to openly declare how they'll be voting for the bravest man in history, Donald J. Trump.
Good he has no fear gene nor gives a single damn what Democrats and the far Left media propagandists have to say on ANY SUBJECT. Fear-driven pathetic, laughable Democrats. Imploding daily out of a ridiculous fear that nationalism is the road to another Nazi Holocaust.
It doesn't.
And no, Trump is not Hitler idiot. Not in 2018. It's the road to pride in our country and a mighty fist of righteousness aimed DIRECTLY at the jugular of those who have no stake or love in the amazing nation our Founding Fathers built for us.
We love Trump.
---------------------
Sunday, there was an economist who explained that free trade creates worldwide prosperity and that Trump is wrong. It happened to be on Fox News, but it made not a dent.
3
Call Me Al: What to say about anyone who "LOVES" trump? There are no words. And the person who wrote the piece on "loving trump" doesn't understand what fascism is, or how we are descending into fascism. Nothing trump is doing is making America great. It is making America weak, and sick, and not only weak, and sick, but it is making America into a dangerous and very, very scary place. Also, the person's screed mentioned "Democrat/Jewish liberal owned media monstrosity," so we KNOW where that racist, anti-Semite is coming from. Let them "LOVE" trump. When he is behind bars, perhaps they will go and pay him visits, with cookies. The Founding Fathers, by the way, for the "trump LOVER's" information are turning over in their graves. As for trump not being hitler...WAIT, give him time. Separating children from their parents, and incarcerating those children is quite hitleresque. It is now being opined that many of these children will not be able to be reunited with their parents, because no mechanism to reunite them was put in place. What will trump DO with those children? The Nazis, unlike trump and the gop, kept excellent records. So, for the "trump lover" you speak about, Al, look at the "person" he "LOVES." What does that say about the "trump lovers?" A few words of comfort: Most of The United States of America does not love the monster-trump. But with gerrymandering, voter disenfranchisement by the gop, and Russian interference in our electoral processes...?
3
Pigs get fat,Hogs get slaughtered....
2
What distinguishes one brand from another? Why is there more than one manufacturer of motorcycles?
Ed, sure there are other manufacturers of motorcycles, but I think that Harley-Davidson has always been a "benchmark." Maybe considered "cooler" than other brands.
2
Good luck selling Harleys in Canada.the prestige of Made in the U.S.A.is gone in Canada.Forget California wine Kentucky bourbon etc.
8
By the way, Trump's got a lot of guts accusing Harley of "surrendering" to Europe. But then, he knows about surrendering, having surrendered to both Putin and North Korea without firing a shot.
7
I hope the Europeans and the Chinese have studied that Electoral College map that Trump is apparently fond of showing off to visitors to the Oval Office.
2
just wondering how many trump and trump family products will now come back to the states from china (or wherever). if making america great again means making your stuff in america, seems like that would have been his/his family's first move.
2
With the trade war Trump is creating, hog farmers ( losing the Asian markets ) and motorcycle " hog" makers are alike in growing distaste for Trump.
3
Sadly for Mr. Trump, Harley executives are not as susceptible to schmoozing as Justice Kennedy appears to be.
6
I would expect a great deal of overlap between the populations of redhats and the people I see who have Harley-Davidson shirts, hats, belt buckles, lighters, bandanas, stickers, jackets, wallets, watches, and maybe (or maybe not) actually a motorcycle.
If this feud continues, I just wonder how these fans (cultists?) of both brands will resolve the cognitive dissonance.
4
Cognitive dissonance doesn't seem to affect these folks. Poor health and too poor to get medical care, they oppose universal health care, Obamacare, and Medicaid. Payday lenders, predatory banking, and criminally negligent credit reporting agencies conspire to cheat them of their hard earned money, but they continually vote for Republicans who oppose regulating the banks, loan companies and credit industry. They scream about liberty and freedoms and a tyrannical government but then cheer every time a cop shoots an unarmed citizen. They don't seem to have any cognitive dissonance. If they do they are really skilled at ignoring or suppressing it.
2
Most telling about Trump's vitriolic reaction to Harley's perfectly rational decision to escape both rising material costs and rising sales prices for its exports--both due to Trump's insane trade war--is his imperial delusion that he can hurl Zeusian economic thunderbolts at those who don't propitiate him with flattery and abject gratitude.
Trump is suffering from delusions of grandeur coupled with crippling insecurity. He is pathetic. But that doesn't deter him from wreaking havoc to our economy and democracy.
6
I believe that it is illegal for a government ( tRump) to threaten a company, or individual, with higher taxes because of their internal organization plans, to protect themselves from a destructive policy. Why doesn't the Republican Party object to this behavior, or ANY of tRump's behaviors? Because they are all just like him, and have drunk the kool-aid. Let's make sure none of them survives this cultish, immoral activity. VOTE!!
7
Hogs and Harleys: Mr Trump's got it wrong on cheese too!
Mexico is the biggest export market for U.S. cheese,
almost 100,000 tonnes, and over 1.3 billion dollars.
Canada is second.
A recent discussion with two Texans (MBA and Eng)
reveals how far Mr. Trumps falsehoods have penetrated.
They railed against Mexico's 25% cheese tariff and Canada's 270% tariff on U.S dairy products.
I tried to explain that Mr Trumps 270% tariff tale was misleading...if there was a 270% tariff on all U.S.
dairy exports, there wouldn't be any exports to Canada. They didn't get it !
Tilamook aged cheddar from Wisconsin is still a good deal, even with a 25% tariff. Hint for cheesemakers:
Mexicans love aged cheddar, and it is much higher value added than mozarella.
Costco Merida Mexico stocks up in November and sells out in March when homeward bound Canadians
buy 5 or 10 kilos.
The cheese wars will tell us a lot about the shape of things to come.
Harley's are stable, no refrigeration needed.
Hogs and cheese need costly storage. Mr Trumps
mountain of pork shoulders and cheese will continue
to grow.
PS
Please do a piece on U.S. exports...I left my Texans staring at their Iphones...statistics on exports!
Can the U.S. export its way out of the trade deficit?
1
Tillamook cheese comes from the State of Oregon ndnot Wisconsin. The town of Tillamook is on Oregon's Pacific coast and the cheese is excellent because the cows get to go outside and graze in beautiful pastures instead of living in some horror industrial complex.
2
Exactly! And it's not as though foreign manufacturing is new to Harley Davidson when some of the 'bike's suspension components come from Japan...brake and clutch parts from Italy, wheels from Australia and electronics from across Asia.' (Source: Journal Sentinel) Not a single Hog is made from entirely American made parts...and of course there's Harley's assembly plants in India, Brazil and Thailand...(announced last year). I just learned Trump's failed Vodka line was made in the Netherlands, his eyeglasses/ties/suits in China and his line of dress shirts were made in Bangladesh, Honduras and Vietnam. So if Trump has plans for a punitive taxation on Harley Davidson for daring to divert American manufacturing overseas will he exact similar penalties on his own and his daughter's Chinese shoe and dress importing businesses? Besides - can he lawfully do that? Oh wait - it's Trump and it doesn't matter. Silly me.
5
US workers know that President Clinton signed the very first laws that started their mass job relocations on an unlimited product basis to Mexico in 1994, and then to China in 1999.
Working class voters believe that Democratic President Bill Clinton (and his Labor Secretary Professor Robert Reisch) should now say, "Once you were employed and were able to feed your family until I signed NAFTA into law and that economically caused your manufacturing job to relocate from the USA to Mexico because you would not agree to work for the same wages that Mexican citizens would work for."
Working class voters believe that Democratic President Clinton can also say, "Once you were employed and were able to feed your family, until I unilaterally created PNTR for Communist China and this economically caused your manufacturing jobs to relocate from the USA to Communist China because you would not agree to work for the same wages that Communist Chinese citizens would be glad to work for."
1
What the underlying theme to most trumpites' is the misery scale. To put it squarely in a psychological frame is the sad fact that trump voters don't seem to care about themselves. Rather they spend an inordinate amount of time looking enviously at others. So when the news called the election for trump, his voters were more gratified in "sticking it to the Coastal Elites" than any other single issue.
He struck the exact right cord in his racism and negativity over anything liberal or progressive. Russian interference and FBI Director Comey finally carried him across the finish line.
So the understated real issue is the politically incorrect racism mind-set. White racism goes along the lines of "we don't care if America has any beneficial safety net, all that just goes to the very poor (African Americans) and even we (poor whites) don't qualify." In fact even if these trumpians did qualify (which many do) they would decline any assistance in order to spite the liberal concept of helping (the alleged, already over protected) minorities. The economics of white people having earned benefits, while black folks are just given "free stuff" runs very deeply in the racist mind. So trump can do no wrong in their minds.
That's been "What's the Matter with Kansas." I know this issue seems overstated and is boring to discuss anymore. But America's dysfunctional racial politics is the heart of the matter. Blind racism continues to have an overbearing influence on all of us.
9
One of the continuing problems with tRump and his supporters is that they don't understand that ignorance, lack of information, and lack of curiosity are major weaknesses! To them, learning
about things is just a silly hobby of fussy eggheads. Who needs maps? Full speed ahead over the waterfall!!
7
Trump keeps talking about the trade deficit as lost jobs and money to America. My questions to Professor Krugman are; to keep the dollar's hegemony is it necessary for the America to run a trade deficit? That is so long as the dollar is the world currency and America is the only producer of the dollar, to keep that position so that countries that do not produce dollars will have them to trade with each other should America be running a trade deficit? Mindful that you cannot eat a dollar bill, is it good or bad for Americans standard of living to be running a trade deficit and keeping the dollar's hegemony? Finally, if Trump causes the dollar to lose its hegemony, what will be the effect on America's standard of living?
2
Unfortunately, a large part of the population and electorate do not understand basic economics and world trade. Also unfortunately that includes trump and many of his followers. There is a lot about economics and trade that I don't understand but I do know that the market for HD products in the United States is at the little to no growth stage so to continue growing they must sell overseas.
That is the case with autos and many other products. We are truly in a global economy and it is largely because of economics and technology. Communication and shipping are easier and cheaper than they have ever been; computerization and automation is becoming more widespread day by day.
So trump and his associates may try to gum up the works and put up road blocks but the world economy will continue to change. The people who will benefit the least will probably be trump's supporters -- or the ones who were left behind. Not his fat cat supporters on Wall street -- they know what is going on and can take care of themselves.
5
The Trump Administration is a real gift to History, Economics, Law, Political Science and Foreign Relations Departments that will last into the future for decades, if not centuries, and make the
HUMANITIES great again.
6
Well, BBB, what the trump administration is doing or committing, among other things, is giving the history books PLENTY to wrote about, and I cannot imagine that one bit of it is going to be good. As they DO wrong and COMMIT one atrocity, cruelty, arrogance, and deceit after another, the effects will indeed last well into the future. We only hope that there will be a firm reckoning for these republican criminals, and that it will be SOON, and we can get back to the business of running the United States so that it doesn't fall apart, and doesn't become a fascist nation. Right now, it is well on its way to doing so, therefore, any American who is capable of ration thought should be VERY AFRAID. With the trump administration, I assure you this: There is NO HUMANITY WHATSOEVER. If they are a gift to anything, or to anyone, they are a gift to criminality, racism, corporate oligarchs, and a whole host of other monstrous categories and reprehensible people.
3
Krugman's piece today indirectly underscores a second important Republican strategy. The first one he stated a few weeks ago I'll paraphrase as "Reverse Robin Hood". This second piece of strategy I'll characterize as "crisis creation". Why? Because the moneyed interests who run the Republican party have the financial means to capitalize on crises, by profiteering, by playing markets against one another, and even by getting early warning of expected changes in government policy, possibly by suggesting the policy changes themselves. Surely this is not government for the people.
13
Trump’s fans are cheering, without ever realizing that they were angry because they felt they were getting the short end of the stick, but Trump’s moves and making that stick even shorter.
But he promised...
2
Well said, PK. But here is the thing about Harley-Davidson: for its relatively small size, it has a very large brand recognition and Trump prefers his brand — which is shrinking steadily on the international stage — have more leverage than H-D's. It is always, and will alway be, about Trump's ego.
Which means, this unhinged narcissism of our Boy-King Don means little, if anything, to his venom-drooling rally attendees. But it does worry everyone else with air in their lungs, also known as "critical thinking skills."
Mental health experts throughout America have been very clear about the dangers of Trump's mind and his mouth. Originally reluctant to discuss His Derangement without a personal meeting, the long list of psychologists and psychiatrist observing The Unhinged Master has concluded Trump is not only unfit for the Office of POTUS, he has yet to fill the role of grownup. He is, and will remain, the petulant little brat spawned by racists.
The only person he ever really accepted as a mentor was the infamous Roy Cohn. Taught to lie at all costs; to humiliate his critics and foes; and, never to back down despite being wrong.
We are in a crisis beyond our worst nightmares. Trump has surrounded himself with blindly loyal sycophants who are even loonier and less qualified than he is.
So, watching Trump go "Hog Wild" over the Harley-Davidson decision to build H-D's in Europe for European buyers, is nearly entertaining.
21
What was it....5, 6 bankruptcies? And he sold himself as a successful businessman. Why would anyone think he would be any better at playing President?
6
Seems like the management of Harley-Davidson would lose their own jobs if they didn't do things that would sensibly cut costs and improve sales. Modern manufacturers are adaptive. I'd look for more of this as these changes in the business environment take effect. Sorry, Mr. President, corporations make money for their shareholders.
6
Under any previous administration this would be a non-event.
Harley-Davidson as part of the news cycle (as opposed to below the fold in the Business Section) shows how trivial, venal and incompetent (disinterested?) this administration, and Republicans in general are at governing at the State and Federal level.
Discussing the probable outcomes is well within the Professors expertise and remit here. But there is no hope in even asking the Trump "base" to comprehend his reasoning.
6
Even I, a liberal arts major in college, can understand why Harley is moving some of its production out of the U.S. Why can't the President? Why does he despise expertise so much?
I also find it incredible that he claims that he has been very good to Harley. Why would he say such a thing? What did he do that should make Harley loyal to him personally? Is this a republic we live in or a monarchy?
November can't get here soon enough!!!
16
Memo to Donald Trump:You think words have no consequences.You carelessly tweet and berate those who dare to cross you. In Economics and in trade every word matters.A threat brings a counter threat- a tariff means a belligerent response.You and your advisors are way out of your league when it come to China and the European Union.Tariffs happen swiftly and mercilessly- stop threatening trading partners.The stock market hates the uncertainty you are creating.
6
The only tactic that will work is truth. The country is broken beyond repair. The middle-class is in retreat and only the acknowledgement that the country is in the hands of those who hate what America has become are in charge. The GOP has used the very freedoms and protections you have evolved to tear your nation asunder.
Let the GOP withdraw from the world and let the chips fall where they may.
Our Minister of Foreign Affairs Chrystia Freeland has at least drawn blueprints for a 21st century Global Economy. Her Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else was a NYT best seller is not a friend of either Trump nor Putin. Your country has rejected the genius and intellectualism of giants like Freeland preferring brute and savage force in a world of great complexity.
7
This is what happens when someone says “ I can do it better, trust me, I know how to do it” but they won’t tell you how — because they don’t know how. People fell for this line from this con man during the primaries because they are as delusional as he is. If someone can’t tell you “how” or explain “why” so you understand, don’t buy what he’s selling. He doesn’t know either.
10
This is what happens when enough people vote for a guy to run the country who thinks that bankruptcy is a brilliant business strategy. In the real world Trump was a failure, his "success" was nothing but a media manufactured image based on "reality show" scripts which made failure seem impossible. Trump has no idea what he is doing in imposing tariffs nor does he understand that businesses don't care what he thinks or says. These businesses actually have to make money, as opposed to stealing it, so they're responding in a perfectly reasonable manner. A con-man fails to understand that businesses like Harley Davidson can't absorb massive tariffs imposed on steel essential for production and additional massive retaliatory tariffs on their completed product. Basic math may be lost on Trump, but it isn't on real business people. When given the choice between moving your production overseas or going out of business, you move production. "It’s apparently not what Trump expected to see. His view seems to be that since he schmoozed with the company’s executives and gave its stockholders a big tax cut, Harley owes him personal fealty and shouldn’t respond to the incentives his policies have created. And he also appears to believe that he has the right to deal out personal punishment to companies that displease him." The problem is that Trump isn't a businessman. He's a con-man who always employed strong-arm and shake-down techniques to get what he wanted, but that isn't working now.
23
So, after the dust settles and America realizes it has been defrauded by a populist huckster, as per usual it will be the middle class...moved now to a lesser class, that will bear the brunt of Trump's folly. Meanwhile, as America's clout and prestige in the world fades in the face of new international economic partnerships created to fill the vacuum created by Trump's policies, sans the US, Trump and his cadre of billionaires and multi-millionaires will simply say "Meh, who knew, nice putt".
9
Harley-Davidson is not a huge company, but has major name recognition.
What's at stake here, is Trump's ego.
He considers this a slap in the face of his greatness.
Now, his revenge tactics are in play with the tax threats.
What ever happened to the Carrier promises?
6
Exactly! I was about to post about Carrier!
1
Yes, "...unless he's completely crazy." Amazing how the Trump base sticks by him, no matter what.
4
The US is being run by incompetent amateurs, "led" by a genuinely ignorant, seemingly delusional guy who drove his family business into bankruptcy. What could possibly go wrong? Thanks Mitch, Paul, and the rest of the GOP.
12
The two overriding problems faced by the planet are global warming and population growth, which in turn drives global warming. Global warming and population growth in turn drive mass emigration from over populated countries that are turning into desert.
Trump is a fool and a knave. We all know that. But if Trump and his know-nothing acolytes succeed inadvertently in destroying the global economy, and if this in turn leads to a slow-down in population growth and global warming, then some of the greyer Trump clouds might just have a thin silver lining.
3
Trump is selling catharsis, not truth. Debating truth and lies distracts liberals from reality: most voters don't read past the headlines. "If it bleeds, we can kill it," provides action-movie catharsis in Predator, but you waste your time debating whether the fictional alien really bleeds. Trumps lines are no different, and Democrats will lose again if they don't wise up to this.
4
These tariffs were recommended by Wilbur Ross for national security reasons.
https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-rele...
At the same time, Ross has had long term high financial interests in the US steel industry, and may still have because his divestments from ArcelorMittal has not been made public. He resigned from the Mittal board before his confirmation, but what about divestment of stock funds? Is there any information about that slight conflict of interest problem?
https://www.thedailybeast.com/big-steel-sees-gold-in-trumps-commerce-sec...
https://nypost.com/2016/11/19/possible-commerce-head-ross-knows-how-to-d...
8
Dear Mr. Krugman, please write about something that does not have the word "Trump" in the headline. Thank you.
2
In the parallel universe where Trump operates, he is gathering so much winning, so much beautiful winning that Americans are going to get sick and tired and bored with it.
Who are those unpatriotic guys at Harley who dare to pretend that there is a downside to his policies and have the gal to take a course of action that does not align with his fabulous policies? Lock them up!
Following all this is like a bad trip or an episode of schizophrenia (not that I have experienced either but I am trying to imagine).
In the mean time the rest of the world is reorganizing trade practices and exploring ways to bypass the US and its nasty tariffs. Just like what Harley is forced to do, this makes complete sense to anybody with half a brain- but apparently not to the thick headed bully at the top...
9
One beneficial effect of this mess.....
Yet another hypocracy was revealed. Harley Davidson wraps itself in the American flag and does its best to sell the lie that its products are American made.
12
Right, it is all about their owner and stockholder profit. I would like to think they worry about their employees, who manufacture excellently, but they are fodder when it comes to the "bottom line".
10
This is the standard trade for corporate America. Nothing but the bottom line has ever mattered.
6
They will continue to make products in the US for the US market. But why should foreign buyers care about their bikes being US-made? As Mr. Krugman points out, Trump's trade war has already made HD's materials more expensive, and the European tariffs will raise prices there even higher. European sales are a good chunk of their business, so they have to protect that market segment.
1
Actually, What I am more interested in , Did any USA presidient in the past threatened any company for this reason.
I suppose this type of threats can be happen only in banana republics.
4
Republicans have gone stark raving mad, thanks to decades of anti-liberal propaganda.
7
Even a Belgian newspaper today has a big headline about BMP, a Texas steel company whose 4,500 employees just sent letters to the president in order to beg him to think about the fact that his tariffs are destroying their company, and to do something about it.
In total, 21,000 companies have already contacted the administration to ask for an exemption. Only 98 have been examined until now, and on 42 have been approved.
Trump may have all the right "instincts" when it comes to how to become and stay a celebrity, bu when it comes to governing and leading the biggest economy in the world, he's clearly as competent as Cristiano Ronaldo ... as the President of Portugal just subtly suggested during his moment in the Oval Office with Trump and television cameras ...
http://www.lalibre.be/economie/libre-entreprise/desespere-un-industriel-...
3
Just because Trump cannot really conceive of an industrial policy does not mean that an industrial policy the created good manufacturing jobs in the US does not exit. It does not mean that we must cede the future development of our nation or any other nation to the tender mercies of global financial markets.
3
Exactly. Look at what Obama did: he added almost 1 million manufacturing jobs here at home, and his Asian-Pacific trade agreement INCREASES international trade, rather than shrinking it as Trump does, would have created jobs in America AS WELL AS abroad, all while strengthening labor laws in Asia (= one of the main reasons of outsourcing, for American companies).
Increasing tariffs basically means increasing taxes on trade, and doing so without investing them in things that have proven to increase trade.
In other words, economically, it doesn't make any sense at all ...
6
This sounds like a promising rebuttal of K's critique of an "America First" industrial policy, but you wimped out on giving any clue as to what such a policy would consist of. Absent any specifics from you
, I have to side with Paul. "America First" policies have always led to disaster (viz. Smoot-Hawley), and the global financial market is a fait accompli. For good or ill, the US is part of a global economy that it can hope to steer to some degree, but cannot opt out of. Deal with it!
2
And let's not forget that U.S. Steel is going to open or reopen 6, maybe 7 steel plants.
Of course, this comes as news to U.S. Steel, whose CEO lacks the spine to tell trump that he, um, er, misspoke.
But even if U.S. Steel were to double, triple, quadruple its steel output, the number of workers hired won't even come close to the number of workers laid off from companies dependent on the import of steel.
Sure, trump may be wealthy - or wealthy-ish - but he also has scores of bankruptcies and broken vendors in his wake. It's almost as if he really has no clue how the world works. What's terrifying, he's being advised by people who neither know nor care how the world works, as long as they're in power and can destroy what has taken 2 centuries to build.
12
Harley
Harley's sales fell world wide (2016 : 260,289 - 2017 : 242, 788); in the US (2016 : 161 658 - 2017: 147, 972); Europe (2016 : 45,838 - 2017 : 44,935 ) Asia-Pacific (2016: 32,889 - 2017: 30, 348) Japan (2016 :10,279 - 2017: 9,506)
To reduce US production and to shift production to low wage countries is its only option to survive. But having turned itself into an "American Icon" it needed a valid excuse lest it would be accused of being Un-American
Trump supplied it.
6
What’s good about the tariffs, if we can call it that, is the likely political fallout of massive job losses in Trump country. Let’s hope they begin to bite before the November elections—and that Democratic candidates can capitalize on them.
With this electoral gift from Trump, the Dems might actually win those red and purple districts they need to take the House—if only—if only—they would put identity politics aside, and stop using the word, "racist,"
Right now, their prospects aren't nearly as good as many of them believe. Heavy turnout in reliably blue districts will not win the House for them. They need swing voters in swing districts, many of which are currently represented by Republicans.
That means Dems must press the pause button. For now at least, they must stop arguing about race, guns, abortion, immigration and other divisive, hot-button issues. They must focus instead on the economic concerns of most Americans—jobs, taxes, education, minimum wage, healthcare, retirement security, and the opioid crisis.
There will be no future for this country unless the Dems can relearn what their forebears knew: the only way to win majorities, and to govern, is to build bridges to people you disagree with. The Doug Jones and Conor Lamb campaigns are models for that approach. Sadly, tragically, many young liberals and Democrats see this not as compromise, but betrayal.
15
No Ron, what they should do is make the case - because it is true - that if you work in the USA and are not part of the upper echelons of income, you have more in common with anyone else who also works regardless of race, ethnicity, etc. The "race, guns, abortion, immigration" hysterias are all from the right - foment culture wars over years and years in order to distract people from what's truly happening to them. The four issues of the apocalypse that you outlined are all tied in and Democratic leaders would do well to recognize that the bridge is commonality. See this link and listen to the "Pod Save America" podcast recently from Durham, N.C. (listen to the whole thing).
https://www.poorpeoplescampaign.org
Democrats cannot win, because Republicans will always pull out Abortion, Gay Marriage, and Gun Control.
2
Whether Trump Likes it (or even understands it) or not, it IS a world economy. Harley-Davidson may be small potatoes but if Harley can do it, so can Dell or Microsoft, or Apple. Even Foxconn (the company that makes Apple computers and tablets and iPhones) can move to the United States to avoid Tariffs which would otherwise be paid by U.S. Consumers.
There will be no net gain for the US and the net loss with be higher prices for consumers all over the industrialized world.
6
Trump was here in WI yesterday to turn the first shovel for a Foxconn plant, for which State taxpayers will be playing dearly, in subsidies, accommodations, and environmental costs.
2
Harley is an interesting choice. As an owner of many Harley Davidson motorcycles I can report that much of their "construction" was sourced from overseas.
Additionally their market share is beginning to drop after an astounding multi-decade popularity resulting in major mark-ups, et al.
I wish Harley all the best and my only advice is: "Don't listen to Trump, too much. There's a lot of hot air circulating about."
7
Do we all recall that homunculus, Wilbur Ross, reassuring us that the effects of the tariffs would be minimal because, for example, aluminum accounted for only 2 cents in the price of a can of coke?
14
There is one good that will come of the trade war. Trump will bolster his claim that he is a tough guy, he keeps (some) of his campaign promises and his base will remain loyal, even if they lose their jobs. Since Trump is so entertaining, so compelling to both his enemies and lovers, and Americans feel they are invulnerable to actions of all those other little countries, it will take a depression to shake some of the gold leaf off of Trump.
9
Unfortunately, those of us who do not support this idiot will also be harmed. I am finally close to retirement age. I have been careful with my money and hoped to stop working in a year at age 70. Now I am fearful of what may come with the trump and his lack of economic knowledge and the ryan with his constant calls to gut Social Security. They need to be voted out before they destroy this country and all of its inhabitant.
2
Less noticeable than the Harley deal is the effect the steel tariffs have had. They may (and I repeat, MAY) have brought back a few mining jobs in Northern MN and a thousand or so jobs in the mills (which are increasingly automated), but they have cost tens of thousands of jobs in small and medium industries which are dependent on the supply of raw steel products. And it has driven up prices on the products those smaller companies make. They might not be direct costs to consumers, but the increased prices WILL be direct costs to consumers. I am really getting tired of all this "winning".
33
So Harley is going to outsource the production for the EU market.
It has not yet announced to which of its overseas factories, but is likely the one in Thailand, that already exports to Southern Europe.
The record of Mr Krugman is
ENDORSING OUTSOURCING OF US INDUSTRY.
Because it improves living conditions in the Third World. Let me quote his reaction to his opinion
"I guess I should have expected that this comment would generate letters along the lines of, "Well, if you lose your comfortable position as an American professor you can always find another job--as long as you are 12 years old and willing to work for 40 cents an hour."
Such moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. "
Note:
Zero compassion of those in the US laid off, instead accusations of moral outrage.
Mr Krugman ends with
"In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty."
Now let's apply this to Harley
It is a moral duty for Harley to outsource to Thailand,
-----------------
http://www.slate.com/articles/business/the_dismal_science/1997/03/in_pra...
3
I'm not sure what point that you're trying to make? That Harley Davidson should just absorb $100 million in costs that are a direct result of Trump's actions, or that they should somehow convince European customers to pay an additional $2K per motorcycle?
10
Nice straw man. I guess its easier to argue against Krugman when you completely misrepresent his actual position. The article you cite was written in 1997, when the critics of his position were those on the left who argued that investment in the "developing" world was a form of exploitation. He does not, as you suggest, claim that outsourcing is a moral imperative, and his position on US workers is not given in the cited article. His argument is rather that industrial development can raise wages and improve working conditions in impoverished countries -- something that has actually happened in the 20 years since the article was written. Similarly, there is nothing in the current article praising Harley's decision to shift production. The article simply states that this is a predictable result of reciprocal tariffs, which it is. Krugman is also clearly being critical of Trump's approach, pointing out a negative consequence of bad policy. There is no suggestion here that he is endorsing the move. The above criticism seems to miss the mark entirely.
21
The point is that Krugman has a history of advocating outsourcing US industry as long as it improves the living conditions in the third world.
RE Europe : Harley already supplies the Italian and Spanish market with Harley's made in Thailand. This might just be a convenient excuse to shift more expensive US assembly to Thailand.
So, what I really want to know, is the price of cheese going to drop because there’s now a glut of it? Finally a result of policy I can get behind!
5
The great majority of rare earth metals used in computer and cell phone components are mined in China. Think about that.
25
Dr. Krugman: I generally find much truth in what you have to say about economics. Alas, you missed some very important issues on this one.
You did not indicate how much the steel and aluminum tariffs would add to the cost of a 2018 $42000.00 top of the line Harley. My calculations indicate a range of $58.00 to $70.00. Let's get real here. $70.00 additional cost for a new $42000.00 Harley is not about to scare a buyer away.
Second, you neglected to mention that Harley-Davidson was ready to go out of business in 1983. President Reagan imposed a 49% 5 year decreasing tariff on imports of most large Motorcycles, giving Harley some breathing room and allowing them to remain as the USA's only major large motorcycle manufacturer. What really happened is that Harley has shifted much of their manufacturing to other countries.
So Harley, which had already benefited from very high US import tariffs, is now squawking and squealing and planning to move more production overseas, a decision they had already made before Trump's tariffs.
Dr. Krugman, you really should write an editorial about how Harley-Davidson was the beneficiary of American goodwill and how they misused it.
6
H-D has said that it's moving production of Europe-bound bikes out of the country to avoid 20%-25% European tariffs on H-D motorcycles coming out of the U.S. Those tariffs only exist because Trump thought it was a good idea to place tariffs on steel and aluminum.
12
You have overlooked the tariffs that the EU has imposed as a result of Trump's actions. At over $2K per bike, their prices would be noncompetitive in that market.
7
Please note that the EU INCREASED an EXISTING tariff on large motorcycles imported from the USA. They already had their protectionist tariffs in place. Do we any longer have a tariff on imported motorcycles? Harley was already shifting production to other countries to avoid that tariff. I oppose a tariff war, but Harley was probably the single, largest beneficiary of unilateral high American tariffs that were imposed to bail out this one industry. Harley exists today because of that tariff.
Trump's trade war has hit my business hard and fast. I own a small, really small hardware manufacturing business, 4 employees and CNC Machines (Robots) do most of the work. The rest we import from China since we need tens of thousands of small labor intensive parts. This is how it's done in this millenium. Most of our product is made from 2 sizes of steel tube with a heavy wall thickness. We need tube of a particular quality which is manufactured in Canada, only Canada.
We were given a heads up by our supplier that they may not be importing it anymore due to the tariffs, and our mom and pop hardly has sway so we have had to purchase a years supply of something we order every other month. We will use it all but the storage and expense is something of a hassle and in a year we may need to invest in machinery to turn bad tube into good tube.
The bottom line is this adds nothing to my bottom line.
Now were shopping for health insurance which is up 17% MAGA.
63
Paul has got it right: Trump believes business is based upon shmooze and cozy under-the-table arrangements, not upon actual business.
It makes you wonder when those Trump resorts will show up on N Korean beaches. Kim probably has more dynastic ambitions than making a few bucks on the side.
19
Harley is a special case, which is why we even notice news about the company. A small manufacturer, formerly identified with outlaws and the police, transformed into a sacred flag by astute marketing. Not a typical company. Revived from utter international failure a while ago by overseas marketing as a luxury item carrying all sorts of conflicting symbolism: the outlaw, the flag, aggression, war, charity. A must-have for wealthy dudes in Europe, Asia, even China. Now even wealthy Saudi women.
However, underneath all that image, they have to build bikes, because they haven’t learned how to build anything else. Bikes are made where labor is cheap, where mechanical production is progressive, and truthfully, where people actually need two-wheel transport. Their political play, an American icon, only goes so far unless backed up with sales here, and that’s insufficient.
However, I do miss the ice cream vending three-wheelers that used to roam the streets, pulled by the friendliest of motorcycles, ridden by the most trusted of uniformed men.
6
All of us remember the fable of putting a small finger in a leaking Dike to save a community from flooding and death. That was indeed a fable but it’s deeper value was that one small act of kindness and forthought could change the world. Harley-Davidson just might be that small finger but for different reasons. The “Hog” owner and Trump supporter might for the first time say “That’s enough. You can screw as many women as you want to and I’ll still support you, but, take my Harley away, and you’re done.”
6
Harley Davidson is certainly not obligated in any way to maintain production site status quo.
However, their stance is Exhibit A re: corporate greed. The recipient of a large tax cut squeals like a stuck pig a few months later when profit margins are squeezed a bit.
First response? Screw our American employees.
11
What did you expect? It's a business not a charity. The backbone of American business is made of greed.
2
Presumably some of Trump's supporters work at these affected industries. I know these people are incredibly obtuse and spiteful but eventually his excuses will have to wear thin. Many of these losses are also occurring in states without any functioning safety net. These voters have children and children have to eat. If the Democrats were not the handmaidens of the plutocrats, they would have already articulated a program to address economic insecurity. It would not have instantly pierced the thick skulls of many Trump supporters, but it would have at least been out there for consideration, ready when they're ready. Instead the party, to their continuing surprise and embarrassment, has to rely on "rogue" candidates having the cojones to put forth a program.Schumer, Pelosi, Stoyer and the whole rotten bunch need to go!
7
The Democrat Party has come to be dominated by well educated, well paid bi coastal professionals. These are on the right side of the growing income divide. Consequently they do not really care about us poor folks struggling on the wrong side.
They think the Democrat Party can win on social issues alone. These social issues alienate the Democrat Party from the white working class that once was an essential Democrat constituency, and which remains a constituency that is essential to election victories.
1
I recall clearly that when Hillary went to Coal country she told them truthfully that coal mining was a dying industry, but that she had detailed plans to set up re-training programs to help the miners transition to better-paying jobs and that she would maintain Obamacare in order to treat the miners for black lung and other mine-related illnesses.
Donald lied and told them he'd "bring back the coal mining jobs".
The miners wholeheartedly bought the lie.
What we have here ISN'T a failure of Democrats not having plans to help working class people... all of those plans exist if you bother to check. What we have instead is a glut of people perfectly willing to vote against their own interests and then blame the "evil liberals" for not doing enough to stop the guy THEY voted for from screwing them over.
I find it very telling that you feel that it's time for Schumer, Pelosi, and Stoyer to go when it's Trump, McConnell, and Ryan (who these people voted for) who are doing all the damage.
1
I was discouraged by radio interviews on NPR of numerous Harley employees who said Trump was doing the right thing even if cost them their jobs. One even said Trump wouldn't be announcing tariffs if he didn't have a good reason for it! This kind of blind fealty makes me worry about the November elections and beyond.
41
Hard core Trumpers love him because they think he hates the tens of millions of people, most of whom are American citizens, they hate
3
" This kind of blind fealty makes me worry about the November elections and beyond."
Ignorance is bliss, until it isn't.
2
My late grandfather once told me that there was a big difference between being tough, and being mean.
"Tough people have the capacity to be kind, but mean people are usually afraid of something."
57
Trump has always seemed insecure and afraid, in my observation of him. He is incapable of considering even the tiniest criticism, and appears to be threatened by it, and unable to learn from his mistakes (which seem to be many, so far).
1
Trump voters are really followers of an entertainment reality show cult culture.
Economics isn't entertainment so you won't find any of them critical of the absurd comments Trump made about HD. Followers enjoy a good rally!
8
And if they suffer economic distress, they will "know" it's all Obama's fault..
2
The shape of things to come? These are the end times; either the end of republican dominance of our government or the end of that democratic government.
Approx. 25% of US belong to this strange cult of personality and the so called president is pandering that that small slice of the electorate because that is how good his math is. He thinks he can win by making and keeping radical promises to a minority of voters who don't seem to believe in democracy instead of turning to the majority and doing what might be best for all.
Think of how much of that much needed attention he would receive if suddenly the Nation could exhale and breathe that sigh of relief we all long for.
When those cultists finally realize what a weak and cowardly person he really is the thud of their hero worship hitting the floor will be heard around the world.
Meanwhile, because those who are putting up counter measures against his tariffs do some reading and studying and make decisions based on facts t rump country is going to get what is coming to them. As Menchen said, "good and hard".
11
And many of the cut followers, the chemicals swirling around in their brains (as they do for all of us when we are emotional)...many of them will seek to alleviate that stress by turning to another cult leader. As long as liberals mock, ridicule, isolate those followers, they will band together in defensive anger and seek another Mussolini-type leader.
1
So surprise, Trump believes he has the power to levy taxes arbitrarily--and the American Presidency comes with the power of a dictator. This is the same stuff he spouted during the campaign when he promised the police union "automatic death penalty!" for certain crimes. What he seems not to know is that the states and the Courts control who gets the death penalty.
The bad--really bad--news is that, not only do Trump voters not know that--the police seem not to know that either. How terrifying is that?
These outrageous remarks, like the gratuitous cruelty at the border, are TRIAL BALLOONS. DJT is an authoritarian menace who is reinventing the fascist wheel all by himself.
33
"These outrageous remarks, like the gratuitous cruelty at the border, are TRIAL BALLOONS. DJT is an authoritarian menace who is reinventing the fascist wheel all by himself."
I agree, except for trump is not "reinventing the fascist wheel all by himself". He is following the fascist playbook.
Steven Miller is a version of Himmler, Sanders and Conway are 2 versions of Goebbels. He's creating concentration camps now and even Senators are not allowed to visit them. trump is despicable and is guided by Bannon who is vile. The new Nazi Party formerly called republican does nothing and says nothing because they are bought and paid for apparatchik.
1
We're going to see prescription prices go WAAAAY down.
...or maybe WAAAAAAY up...
People who take everything personally are completely incapable of objectivity. That appears to be Trump's worst problem.
7
That, plus what looks like a deep and persistent carelessness about the effects his actions may have.
2
Wait, are you telling me Trump has no idea what he’s doing? Next you are going to tell me that he’s mean-spirited and narcissistic too. Let’s put him in charge of our economy and military.
5
Yes, these traits were not obvious before the election (to many).
The rise in cost for everybody shall become evident as time goes by, as clueless Trump goes on castigating industry and commerce, a cruel vindictiveness not based on the evidence. What a farce all this is. And what a fraudster have we got, beginning to choke on his vanity and desperately seeking scapegoats to blame. As usual.
2
How many decades will it take to undo the damage caused by two years of Trump?
We really need to take Congress out of the hands of Republicans this November!
13
If you put lip stick on a HD Hog, would Trump grab a Tic-Tac and feel compelled to kiss it?
Not to be too snarky, but if the workers at HD don't get that Trump is selling their jobs down the Yellow River, and they would vote for Trump again, I should think this base deserves what it will get - unemployment with zero public benefits.
Of course it's all Obama's fault.
7
Jeff Bezo's and Amazon have already laid out the play-book Harley Davidson, and all others, should follow. Ignore Trump. Ignore the man. Just concentrate on business and let the results speak for themselves. Trump is squealing via his tweets. Ineffectively so. Words don't mean squat in Capitalism and Business. Only actions. Bluster just makes one appear a fool because what can he actually do? Nothing. So ignore him and continue what you're doing. It works for Amazon. It'll work for HD.
John~
American Net'Zen
8
I hope and trust that the trade war and coming resulting recession will put paid to the very common notion that we 'need a businessman in the White House'. We obviously do not need a businessman in the White House-- W tanked the economy in just under eight years. Trump is going to accomplish this feat in just under two years (give or take). The skills needed to run a business (where one can bully opponents, retaliate viciously and take one's toys and go home), and government (in which, who knew, diplomacy is a primary skill in a world that contains other sovereign nations with their own ideas of decorum and how to get things done...) are entirely different skill sets. We should learn and remember- but collectively the nation currently appears incapable of learning and remembering. Propaganda rots brains. That's why we can't have nice things.
5
Mr. Trump seems willing to wage war as long as someone other than himself suffers the hardships. He successfully dodged the draft, avoiding the war in Vietnam and in his campaign shamefully criticized a man who served and suffered in that conflict. His assault on Harley-Davidson has a similar bent. Mr. Trump criticizes those who actually work for a living, while lazing in comfort off the field.
4
Oligarchs in America? If Trump has his way, yes!
3
Don't you realize Citizens United sealed the deal for oligarchs. The right-wing judges were fine with giving the power to the wealthy by allowing them to have the loudest megaphone that money can buy, drowning out other voices. Look at the new Nazi Party (formerly called republican) that the wealthy installed in congress.
1
Though Milwaukee has been synonymous with Harley-Davidson hogs and beer and beef for aeons, the city will reel from their quintessential American motorcycle manufacturer Harley-Davidson moving their manufacturing company out of the U.S. in reponse to Trump's demented tariff wars against our former allies. Hog-lovers, read 'em and weep.
3
This will be their (Trump and his Oligarch masters) opportunity to scapegoat and blame a group to further their fascist take over.
They know exactly what they are doing - enriching themselves while bringing real pain and suffering to the Americans who support them. They will take away even more from the already suffering Americans who wear MAGA hats, with the tariffs that are already costing these people their few remaining blue collar jobs, such as motorcycle manufacturing. Then, when the MAGAites (at least a good portion of them) finally realize they have simply been conned and they begin to fight back, Trump and the Oligarchs will pivot and blame it on (fill in the blank - the Jews, the liberals, the illegal immigrants, what ever) and then use that to further crack down and implement their totalitarianism.
This isn't economic policy, or even class warfare, it is classic, and pure fascism.
7
The other non economic lesson from this foolish stunt of Trump is that it illustrates his profound Narcissism. He can't handle any announcement that doesn't praise him. So the Hog's move is (to him) a direct attack on him as a person. He has a severe boundary problem. He doesn't know that there is a line between Trump as male person (ordinary citizen of the US) and Trump the president -- a role that is much bigger. Criticizing Harley D. for their move is the trivial pout or whine of a 10 year old.
6
Advisors have a stomach for.)
Harley Davidson has bigger problems than Trump. Take a look at the number of used Harleys for sale on Craigslist in your hometown. The next generation are not buying these things and the market is flooded with used ones. Hate to be running Harley Davidson these days. Future does not look bright.
5
It is good to be Xi right now. The US administration is run by a bunch of clowns who are flippant about laws and do not understand economic theory.
14
If Hassett was correct there would be actual reporting of anecdotes and facts rather than his speculation.
1
Trump with his Thai and European hotels, trademarks in China and golf course in Scotland scolds Harley. Now he says he going to tax them. More proof that he hasn't read Article
1 of the Constitution . He sure didn't get far in Article 2. Somebody please read it to him during his morning briefing by Fox and Friends
6
If our “petulant punisher” Trump continues to be mean to Harley- Davidson, they might consider moving to France, where their motorcycles are almost as iconic and beloved as in America. The recently deceased Johnny Hallyday was almost indissociable from his Harleys and there isn’t a French person alive who can’t sing the refrain from the 1968 song (Serge Gainsbourg) “Harley-Davidson” - “Je n’ai besoin de personne en Harley-Davidson” -sung by Brigitte Bardot, in her best “sex-kitten”mode, astride a Harley-Davidson. I also cannot count the number of French people I’ve known over the years who have told me they harbor a dream of barreling through the American West on a Harley.
I don’t know anything about production costs or steel tariffs here, but if Harley-Davidson is looking for a second home or perhaps “political asylum” they would surely be welcomed here with open arms.
5
Trump has no grace,as his threat makes clear: “They will be taxed like never before.”
Every time he opens his mouth to speak or sends a tweet he is either mediating malice or mendacity, and most of the time it is both malice and mendacity that is being transmitted.
He spends none of his time focusing on his job for which we taypayers are paying him to do, which is advancing the goals of our Constitution: "form(ing) a more perfect Union, establish(ing) Justice, insur(ing) domestic Tranquility, provid(ing) for the common defence, promot(ing) the general Welfare, and secur(ing) the Blessings of Liberty to ourselves and our Posterity..."
He clearly has no interest in any of these goals. The voters have the antidote to deliver the nation from the poison being conveyed by him, but will they? Perhaps Mueller will crush the head of the snake.
30
Everything Trump says or does is about himself. He constantly looks for ways to act as he imagines a powerful person would. Unfortunately, his concept of power is much like that of a 3 year old - the power to throw tantrums and get everyone's attention. Disruption for its own sake. Work with other people, study the details of issues, learn stuff? That's for losers, as far as Trump can see.
3
Has the Trump family announced a repatriation of the production of their products back to America yet? Sad!
6
Trump can't hang with the big boys. Any of them. Every deal he makes whether with Kim, the filthy rich and eventually with Putin, he gives or will give away the farm. He gave those enormous tax breaks to the already wealthy and didn't even require that they bring their jobs home. Maybe he thought he was bargaining for loyalty. Didn't get it. Yet he will cheat the lowliest person on the payroll for wages they already earned. What a guy!
49
Imagine Trump riding a Motorcycle. What do See ??? Two flat tires.
5
I believe Trump owns a motorcycle, or at least used to. He liked to get his picture taken standing next to it.
1
Harley Davidson is fast finding out that Trump has no friends, and that a compliment is a political manipultion to serve the person who gives it.
11
Seems like Trump's got a thing or two in the "Big Lie" Department he can teach Putin.
2
Sadly, neither Putin or anyone else could teach Trump self control or thoughtfulness.
1
Harley Davidson announced soon after the tax cut an increase in production in Asia and the shutting down of several hundred jobs in Kansas City, MO.
8
"How do you feel seeing Trump squealing over a few hundred jobs possibly lost..."
I often grapple with verbs while searching for the right description of the noise Trump makes. Whining, complaining, spewing, bloviating, all pale next to Dr. Krugman's excellent choice!
5
The health of the United States' economy is what Trump is focused on, but his objective is to disrupt it not assist it. He is a traitor conspiring with Vladimir to undermine the West.
PROSECUTE RUSSIAGATE!
19
Once again, thank God for Paul Krugman.
4
Many of Trump’s policies seems to be rooted in the sorts of revenge scenarios that play out in one’s mind. You know, when you feel aggrieved you play out these imaginary scenarios in you mind where you get even. We all have these moments whether we want to admit them or not. People who are emotionally mature recognize these childish thoughts for what they are and dismiss them. Trump does not dismiss them. He seems to feel that as President, he has a right to act on them. The problem is, these imaginary scenarios are always sort of stupid, mean-spirited, and counterproductive. This makes Trump seem increasingly deranged and his supporters increasingly foolish.
6
We already know what Trump will do when faced with opposition. He'll surrender like any other coward.
He banned shipments to ZTE, which stole our intellectual property and gave it to our enemies. Xi complained, Trump caved.
Dan Kravitz
5
While it might not seem on topic, bear with me.
I just finished the last episode of the Ken Burns Vietnam series. It is the Presidents and their advisors shown there, all of them, that rang so many current bells for me.
This country, America, is now in the hands of someone who is not worthy to be President. He just isn't. He is a dangerous and unfunny joke.
So many of the people connected with Vietnam should have been good, were good on paper, but the situation, its reality and the real human flaws of most of them turned out to be detrimental to the good of America, to say nothing of Vietnam.
This current, unschooled, incurious President is about to meet with Vladimir Putin to do what? If I felt this current President was a savvy negotiator as boasted, who has in his heart the very best interests of the American people he now represents, and has an unusual connection with this ex KGB guy, I could see the meeting.
My dentist is Vietnamese and her parents got on one of the last helicopters from Saigon in '75 because they were wealthy and they paid somebody. She was two.
Does it always come down to money? If so, why is the meeting between the current President and Putin taking place? Really?
I am feeling very uneasy.
My parents could not have paid enough to get space on a helicopter out of Saigon in 1975.
4
I expect something from Putin. After all Trump asked for Russia’s readmittance to the Group of 7 while up in Canada and he hasn’t been too eager in imposing sanctions leaving that to congress. The Russians have likely given him big money for his mortgages and have laundered money through hid condos. But he is holding up his part of the bargain. It’s time for Putin to help him out on the midterms. It’s coming!
1
First, Harley already produces "hogs" offshore so this is a modest re-balance. While BMW and Mercedes produce cars here and BMW exports SUVs even to China, Audi and Porsche do not. Apparently the 2.5% duty means nothing so place the same duty announced for Harley on Audi/Porsche. That would at least for Audi, open share gains for US-produced Lincolns, Cadillac, Mercedes and BMWs. As done many years ago with Toyota, Nissan and later with Hyundai, if you want to sell here produce here.
"Apparently the 2.5% duty means nothing so place the same duty announced for Harley on Audi/Porsche. That would at least for Audi, open share gains for US-produced Lincolns, Cadillac, Mercedes and BMWs. "
There are no competitive cars to Porsche, so what's the point other than to make them even more expensive.
But, that's a minor issue. How does increasing the price of Audis help Lincoln and Cadillac? If people wanted those cars instead of Audi, they'd be buying them. So, you seem to be advocating forcing people to buy cars that they would rather not own.
1
Because just about everything Trump says and does ultimately is directed at his base to ensure their undying allegiance to and affection for him, his tirade against Harley-Davidson should be seen in that light. This was all about him 'being tough' and 'standing up for the American worker'. It matters little that what he says makes no economic sense or is legally suspect or defies the Constitution. But the reaction he gets from his adoring and loyal subjects matters much, however. So as long as those people do not care about such trivial matters as economic and trade policy or the Constitution or the self-preservation decisions of corporations (that, ultimately, are 'out to get them'), this kind of nonsense from Trump will continue.
8
Please tell me again, where do Trump branded merchandise get produced? Maybe they should be 'taxed like never before'!
11
This echoes the larger issue with Trump and his team; The law of unintended consequences always seems to catch them by surprise.
We see it with Harley Davidson, as noted here, but we also saw it when Trump pushed his zero tolerance policy, and was caught flat footed when that resulted in kids being separated from their parents.
We saw it again, with the North Korea summit, when Trump loudly proclaimed that the north had agreed to denuclearize, but now we see satellite images showing the opposite.
He tells Lester Holt that he fired Comey because of “that Russia thing”, and still bemoans the so-called Witch Hunt, basically fueling the very fire he would like to snuff.
The problem is that Trump is incapable of thinking things through to the possible outcomes. He shoots from the hip, which might look cool, but anyone who served in the military can tell you, first you aim, then you fire. Otherwise you waste a lot of bullets.
11
His staff says he won't read more than a one page document. He appears largely incapable of evaluating information critically. If some anecdote makes him feel good, he repeats it, no matter how absurd it may be. I believe he lives 99% of the time in his own head, busy reinforcing his exaggerated idea of himself. A "stable genius"? I don't see it.
1
If he's smart, Xi Jinping will do nothing. Think about it: Trump feeds on controversy, whether the legitimate result of divergent views or, most commonly, devised by him to attract or deflect attention. The absurdity of the twice-a-week "issues" that keep the media (and its addicts, e.g. I) busy must strike foreign leaders as exactly what it is: the nonsense of a flailing comedian. They therefore have most to gain by ignoring Trump, continuing to strengthen their economies and societies, and leave the USA in the lurch to enrage over neglect - rather like Russia and other autocracies.
6
Trump's Tourette Syndrome Trade Tariff War will be a catastrophe, but his cult members don't care.
At the Harley-Davidson plant in Menomonee Falls, Wisconsin, most workers happily volunteer that they voted for Mr Trump and would do so again — tariffs or no tariffs.
“He wouldn’t do it unless it needed to be done, he’s a very smart businessman,” said one Harley employee who asked not to be quoted by name.
“I think he’s playing poker: I’ll hit you with this, you’ll hit us with that, I think this will bring them to the table — unless he’s completely crazy,” chimed in another, who also declined to be publicly named.
Asked whether they blame the president or the EU for causing Harley’s offshoring decision, most say emphatically that they blame only the Europeans. “The president was just trying to save the US aluminium and steel industry”, said one approvingly.
One worker named Tod, when asked whether the latest news could make him vote against Mr Trump if he runs for a second term in 2020, said: “No, I don’t think so. It’s going to take a little bit more than that. He’s doing good things. We’ll just have to see who runs on the other side, that might change my vote”.
Mark, another Harley worker at the plant that employs 1,000 workers, said: “I think Harley is just using it as an excuse” to move more production overseas, after a recent decision to close the company’s Kansas City plant. “They will just blame it on Trump.”
Trump University is flourishing.
November 6 2018
VOTE
867
As usual, you are spot on, and funny. But it's actually quite scary. This is the Trump rationalization we've all been speculating about and this strikes me as one of the first tangible examples. Who knows what the majority of HD workers thinks about this, but I heard the workers you quoted and there's as much substance to their reasons for liking what Trump is doing as Trump himself has. And they're losing their jobs while saying this! Just terrifying.
Get out the anti-Trump/Republican vote and donate to groups that make that their mission!
96
Socrates,
Good comment. These still loyal Harley workers will now have more time to campaign for Trump.
8
I have an explanation for HD employees' tone deafness. It must be because they themselves ride Hogs with aftermarket (and illegal on public roads) straight exhaust pipes that turn an otherwise reasonably responsible product (for the record, I happen to like motorcycles in general) into a sound weapon. I've done the calculations myself (not difficult: You can get a sound-level meter app for your iPhone for free) and discovered some of these illegally-modified Harleys are 1000X (30 dB, for those of you who understand such things) louder than the OEM EPA-approved exhaust system.
It's quite simple, then: They actually ARE deaf from riding their modified hogs. No point in trying to reason with someone who can't even hear you.
3
Hats off to Harley for having exposed this in broad daylight for all to see.
3
Threats are cheap, and hopefully Trump's actions in the past of "retreating" will appear again as this trade war gains force. Trump must be holding his breath at this point because the Harley fiasco is going to be representative of much more to come. Tariffs imposed by China, Europe, Canada, Mexico, etc. on small businesses won't mean diddle to the economy as a whole, but spread out over America, a few hundred jobs lost here and there, and soon the crying will hit the air waves, the papers, the TV news. That is what will add up fast. And the Trump administration cares less because to them it is all about ego, and no concern for the employees working at the Harley shops.
2
Trumps' threat against Harley is hot-air, an eddy off the side of the stream of invective directed at all, who interfere in the Trumpist agenda, hot-air designed to keep his rabid supporters on point; Trump is the ladel stiring the witches cauldron, and one has to admit, he stirs well.
Four months to the midterms, the Supreme Court becoming the Kings guard, redesigned to regain control of the workers, those pesky thankless workers, the unruly masses having the temerity to suggest they be representated.
Democracy? Do I know that word, is it a real word anymore, where is its vanguard, the Great Pretenders, the Pelosi Schumer Party, the hiding in plain sight defenders of the status quo, the 40 year long status quo, which guaranteed the Trumpian Party rise, and now decades long reign.
Why bother with the pretense anymore.
Not so much as a semblance of planning from the Pelosi Schumer Gang, in fact nothing but annoyance that the pesky peasants were able to send Crowley into the Pelosi Schumer Party wilderness, replaced by a real progressive, Ms. Cortez, a really young starry-eyed progressive, the clear and unequivocal diametrical opposite of all things Pelosi, a Joan of Arc, ready, willing, and from my perspective, able to drive the spear of Destiny into the nearly dead heart of the Pelosi Schumer Party.
Surely there must be a spark of decency left in the wilderness that is the mind of the Pelosi Schumer Party.
Decency, is that even a word anymore, here in Trump land.
4
Are we tired of winning yet?
Consider Trump's accomplishments so far:
1) the appointment of Gorsuch to the Supreme Court. Oops, that was actually McConnell's sinister achievement, now about to be repeated.
2) massive tax cuts for the 1%. Well, that was actually Paul Ryan's long sought ambition - Trump merely rubber-stamped it.
3) Trump #1 ambition: overturning the ACA. Uh, that did not happen...not yet.
4) Demolishing NATO and the post-WWII world order that has brought peace to three generations. That is a work in progress, and going pretty well but has a long way to go.
5) putting brown babies into cages. OK, I'll concede he had
a ringing success on that count.
And the winning goes on...
4
Indeed, one has to wonder about the economic smarts of the policy makers in Washington. And the education of Cadet Bonespurs, of “best words” and “best schools” fame. One of the basic lessons of capitalism is that capital is mobile and will flow to wherever it will get the highest returns. Or do they teach something else at Wharton?
6
Hogs, both the bacon kind and the metal kind, are but two victims of Trump's fickle attempts to undo globalization. Some estimates of American job losses from a trade war run as high as 550,000, and China would be hit equally hard. Such damage to the world's two biggest economies would cause a prolonged global recession. The Economist points out that America is the engine of global growth but "in Mr. Trump, a dangerous driver is at the wheel."
4
While what Krugman says in this column may all be true, so far nothing seems to affect Trump. His Teflon coating makes that of Reagan seem cheap by comparison.
I think the entire economy could collapse, but Trump's base would love him because he appoints right-wing hack judges.
2
This phony trade war nonsense is political, not economic. Trump is hoping the same gullible Democrats that voted from him in 2016 will stay with him, thinking their jobs will come back. What's actually going on in the economy that matters:
1. The 10-year deficit trajectory was $9.4 trillion under the Obama baseline (January 2017); now its $13.7 trillion, a nearly 50% increase (CBO April 2018 alternate baseline). That increase is about $34,000 per family, a lot more than the $900/year x 10 = $9,000 the middle class is supposed to get assuming the individual cuts are extended.
2. We created about 3.5 million jobs in Obama's last 16 months, vs. about 3.0 million under Trump. Yes, the pace of job growth is slowing.
3. We're up about 3-4 million uninsured since Obama left office (about 15%), mainly due to Trump's sabotage. The new CBO baseline is about 7 million more uninsured over a decade vs. the Obama baseline.
So much winning in such little time! Perhaps those gullible Democrats will look back and realize tax hikes on the rich to pay for college and healthcare is a pretty good plan, instead of all this damaging chaos.
5
Republicans also voted for Trump, and the GOP has continued to protect and support him. They seem still to see him as their useful idiot.
1
Trump has basically bankrupted every business he has run. He takes out massive amounts of debt, squanders the money and then goes bust. Now he's in charge of the U.S. economy and is setting about doing the same thing. He pushed through a huge tax cut for the wealthy that is going to lead to trillions of dollars in budget shortfalls and is now starting trade wars that can only lead to an economic slowdown. Rising expenses, declining revenues -- America, we are heading for a recession.
The self-proclaimed King of Debt once famously said, "If you owe a million dollars and can't pay it back, you have a problem. If you owe a billion dollars and can't pay it back, the bank has a problem." America, we are the bank. And we have a problem.
3
The whole GOP helped Trump with that tax cut thing. Trump on his own would not have been able to do as much damage as he + the GOP have done.
1
Harley won't back down. Regardless of what happens visibly, they are free to invest wherever they choose. Trump, in his ignorance, doesn't realize that capital will tend to move to maximize its returns.
Both parties are complicit in providing the US with the highest corporate tax rate among industrial nations on the planet. Trump's Tariffs just make the situation worse.
1
It's a subtle difference, but an important one: Donald Trump isn't all over Harley because Harley wasn't personally loyal, but because Harley effectively contradicted him. Trump is a narcissist, so he experiences contradiction and disagreement as existential threats.
By disclosing a plan to move jobs overseas, Harley contradicted Trump's claims about his trade program: trade wars are easy to win, and tough tariffs are the way to win them; tariffs will bring jobs to America. Even more importantly, Harley contradicted Trump's claim to unique knowledge, ability, and expertise: "I alone can fix it."
Contradiction of a narcissist's claims, constitutes - in the mind of the narcissist - an attack on the value of the narcissist as a person. Thus the person contradicting him must not merely be proved wrong, but must be crushed and humiliated. Otherwise the person's attack on the narcissist might be seen by others - or worse, by the narcissist himself, in the far corners of his mind - as having some validity.
With a narcissist, there are no friendly differences of opinion. If you disagree with Trump, you are his mortal enemy, and coexistence with a mortal enemy is not possible.
politicsbyeccehomo.wordpress.com
3
Yes, the need to defend himself against unwelcome messages from the outside "real" world is what takes up most of his time and attention. He's too busy shoring up his grandiose self-image to have any time left to try to do the work of a president (whatever that may be, I am sure Trump doesn't know).
1
Donald Trump, the arsonist firefighter, starts many fires concerning trade and never attempts to extinguish any.
How many of these corporations and corporate leaders hitched their wagon to Trump's "economic" policies and found those policies to be a broken down donkey they hitched up to.
I am a Harley owner. Do I have animosity toward Harley about their move or any other company that finds themselves in the same position? No. What I will say is, you broke it and now you own it if you hitched your wagon to the broken down donkey of an administration. Perhaps a lesson to be learned here-never believe a carnival barker.
I find it disconcerting that nobody is questioning as to when and what countries will be brought to their knees and the bargaining table to resolve these trade fires. Canada, nope. China, nothing. Europe, again, nothing.
So, as the trade war fires rage Trump is off to see his BFF Putin rather than attempting to govern.
As the real costs of the trade fires become evident in higher prices at the retailer and the effect on manufacturing in this country, will those who believed the carnival barker still believe in him?
3
Trump started with a million dollar gift from daddy, then given a 14 million dollar bailout by daddy, then inherited 230 million dollar inheritance from daddy, then shorted contractors, made a mess with his casino investors, and was broke and bankrupt when he was elected president. Now he is making billions, and Trump inc in 'the tip of the spear' of MAGA-- pay Trump, and everything in his world is fine. A business move he can believe in. If someone he gives a break to makes money, that is fine, so long as Trump makes his money.
7
I still can't understand why our country's economic policy at home and abroad is being directed by the only guy in history to bankrupt a casino.
4
Massive incompetence plus the gift of gab, appears to be the recipe.
1
If you were Xi Jinping you would already know Trump is weak after watching Kim Jong Un clean his clock in Singapore. If Xi really wants to get under Trump's skin he would welcome a blue state trade delegation and sign a favorable trade deal for products made in that state. It would not cost much and the PR would be priceless. Maybe Jerry Brown can pull it off.
4
Here is the video campaign advertisement I would like to see created. Very simple. Alternate shots between 1. people making statements about why they did not want to vote, and 2. statements of fact about exactly what laws, policies, EPA rules, and so forth have actually changed. Go back and forth from one statement by a non-voter, to a fact of what has changed. Do not even need to use statements or images of #45 at all, just the facts of what has actually changed. Does not need to have any political personalities visible, just facts, and non-voters. You could close it up with ELECTIONS HAVE CONSEQUENCES. Turn on your ad-sense on that on your you tube channel and you will become wealthy. Surely someone is thinking of doing this ?
7
When you get a bird in the hand, sometimes it is better to move as far away from the Trump photo op as you can. And secondly, why would you turn that bird in the hand back to the American taxpayer? Better to hoard it and not share it with others.
2
Hogs? Hardly.
This isn't about hogs at all. That and its ilk are just a canard.
Please ask yourself what is the biggest "threat" that motivates Trump and his minions, economically?
The professor in your might respond: The US Debt.
Yes, it's huge and getting bigger all the time. Truly reasonable people may likely disagree as to whether or not that is advantageous or sustainable in the long run, and therefore wise.
But we are not dealing with truly reasonable people. We are dealing with zealots.
They want that debt erased. For keeps. And don't tell me you don't believe that.
Clearly, there are two ways to accomplish that:
1) Work hard and pay it off over time,
2) Declare bankruptcy and walk away tomorrow.
Which of these alternatives do you think is the supposed expertise of the current occupant of the White House?
How else does one explain the simultaneous onslaught of a trade war with the EU, NAFTA and China?
By offending them all, and making enemies of their governments and especially their citizenry, the Current Occupant is stacking the deck for March 2019 when the Debt Ceiling needs to be raised.
Pay or default?
I submit that he wants to destroy the debt and just walk away, putting "America First," and cavalierly toss aside centuries of wisdom that made the United States "the world's most reliable debtor" -- a wisdom that allows not just us, but the world at large, to prosper.
Does anyone really want to let him blow it all up?
2
Perhaps Trump may blink. But that is not the worst.
The worst is even if he may finally realizes his trade war is not so
"good", not so "easy to win", his false pride may tell me to double down and stay with it. Can you imagine the damage it will do to the US and world economy?
4
Trump is squealing about H-D because he knows its a brand that appeals to his base who kiss the Stars and Stripes every morning before they leave the house. H-D are not a major force anywhere, a few years ago they were pretty much on the skids. Their bikes are strictly for a certain lifestyle biker who believes riding a Harley turns them into an instant rebel (just add expensive leather and chrome). Most serious bikers hold them in disdain. The sad reality is that most American passenger cars, and bikes, cannot go toe to toe against European and Japanese counterparts in terms of price, performance, reliability, etc. Except, that is, for Tesla.
2
The tariffs are bad for business, but even worse is the instability Trump has introduced into the American economic system, by replacing rule of law and policy made by responsible governing bodies with the capricious and impulsive dictates of a single, ignorant person acting solely in his own, narcissistic self-interest.
In the past, if you were a company looking to make a large capital investment, the US was one of the most desirable places to make that investment. But as chaos overtakes the American system, as sound policy is replaced by Trump dispensing favours or punishment solely based on whether organizations show proper deference to him, and as congress and the American people demonstrate their complete inability or unwillingness to rein Trump in, the country looks less and less stable and more and more risky for investment. Sensible companies will hedge their bets, diversifying their portfolios to limit risk by distributing their investments to additional countries. Sure, the size of the American economy will always attract investment. But the eggs are going to be distributed in more baskets in the future.
1
Despite the 3,200 (and counting) factual lies and distortions, Trump supporters have a point when they say that Trump "says it like it is", at least about the essentials of his own character. "I have been very good to HD ... I will tax them like never before." The presidency as personal dictatorship. The water is getting warmer, the lobster is half-cooked. This is the new normal.
1
Who in the GOP would have predicted that Harley would be one of the first companies to act based on the irrational policies of Trump? I love that it causes a PR disaster for them. I still haven't heard much reaction from Harley riders. Many hog riders are trump voters. Do they blame him? Or do they follow the GOP script of misdirection and blame Harley? One thing would help the "economists" in the admin to know...people act in their own best economic interest. Any tariffs, incentives for failing industries, etc, will cause people to evaluate their options and pick the least costly or most profitable action. Think about that before jerking those levers and chains.
1
Once upon a time (the early 1980's), tariffs on Japanese Motorcycles saved Harley Davidson in America, now they are going to be the reason Harley moves out of America. At least the shareholders are still making lots of money and after all, that is the only thing that really matters in America.
5
Well, that does it! I AM not going to buy a Harley if they transfer production overseas. Oh, wait a minute, just looked at my MAGA hat, “Made in China.” Never mind.
6
Trump's playing chicken with the EU, Canada, Mexico, China, and the rest of the world. He knows he's the best in the world at this game. He knows that everyone else is a chump. Everyone that is except the great guys who get invited to be his passengers. LIke Harley Davidson.
Like all of the other passengers, Harley Davidson was supposed to sit quietly in the back seat and be supportive. No whining how fast the president drives. No screaming about crashes. And above all, no bolting from the car when it's stopped. Trump has told them a million times: just stay on board, keep quiet, and you'll be a winner, too.
But HD just didn't get it. They chickened out. They're not team players. Everything was set to work out. The EU was going to fold for sure. Not now though. HD ruined it.
Now they have to pay. You just don't get to turn down a Trump deal and not face the consequences. Or at least a few empty threats.
5
Here's hoping that Trump does blink.
We're in big trouble if he doesn't.
1
One of that group of Trump-supporting economists, Stephen Moore, was on a CNN news show discussing the Harley-Davidson issue. His voiced his general agreement with Trump’s approach because it’s easier for Trumpists to revert to generalities when specific questions are put to them.
The host, Kate Bouldon, asked him directly whether he thought that Harley should just “eat a $100 million dollar loss”. Moore went back to generalities.
3
Offshoring Harley Davidson is a American as apple pie. Chinese were fond of Buicks during the Lehman crisis, so why won't they buy out Harley and move it to China during the next crisis? Evolution has many unknowns in the future.
1
More big government in Washington telling us how to runs our companies. Repeat after me: "Yes, Sir! Whatever you say, Mr Government, Sir!"
I detect a bit of annoyance in Krugman's tone- but why not? Donald Trump is wearing to the soul.
How many companies is Trump prepared to bully or blackmail when the steady loss of jobs in Trump country disappear? And who will he blame? Obama of course.
All it will take to sooth the unemployed masses is to blame Obama's "weakness" for leaving Trump to fix the "massive" trade deficit with; Canada, Mexico, China, the Bahamas, Norway... His "people" will accept the hogwash as the sacrifice they must accept for MAGA. The rest of us?
3
When with the Trump voters realize they have been had?
When their company closes down and they find out that all of the social welfare programs that otherwise would have fed them and their families have been shut.
9
When I saw "Hogs" I thought the article was going to focus on the collapse of pork prices which is going to take out many more Trump supporters then Harley-Davidson moving production overseas.
2
Every several days, Mr. Krugman patiently explains economic concepts in these and other pages, using straightforward language to analyze various policies and whether or not they are ultimately good ideas.
Unfortunately, the people most likely to be hurt by bad economic ideas--the ones who most need to read these essays--never will. They are not only uninterested in economic analysis, they are uninterested in any "analysis", because that implies dealing with facts and science and those reality based concepts that make their heads hurt. Far better to raise a fist towards those emotional pronouncements that activate their guts and bypass their heads.
As Socrates points out, most of the people at the Harley Davidson plants at which jobs will be lost in the move to overseas production would still vote for the orange author of these harmful economic policies anyway, because, you know, he makes them feel good and "Murica" and such.
The real question is what it will take to get the scales to fall from the eyes of the massively deluded orange supporters. I'm not even sure Great Depression II, or World War III, would do it--apparently, the propaganda is so good and the delusion so deep they'd just find someone not orange to blame it on.
Yes, nobody ever lost money betting on the ignorance of the American populace, but it's gotten to the point of an existential problem--how do we keep these nincompoops from dragging the rest of us down into the hole they're digging?
3
How can a President make such an outrageous statement as, “They will be taxed like never before”?
This is the US President threatening to increase the usual tax liability on a US company as their behaviour is not what the President wants. No wonder Trump is on such friendly terms with leaders such as Erdogan, Duterte and Putin.
If Trump employed a single economist, they would struggle to explain to Trump the difference between comparative and absolute advantage. The best US neurosurgeon might also be the best office cleaner, but he is best employed as a neurosurgeon, despite his incredible cleaning skills.
Trump’s reckless implementation of tariffs for spite, ignores the retaliatory nature of international trade when someone threatens the status quo.
As an Australian, I am looking forward to the US opening up their beef and sugar industry to more international competition, or is Trump continuing on his cherry picking of winners and losers, which will result in US consumers and workers being the biggest losers?
2
The most disillusioned person on the planet right now is a Trump supporting coal miner on his Harley.
16
I get it that this is for laughs, and it made me smile, but the second thought I had was that it isn't really true. That coal miner on his Harley with his MAGA hat is totally convinced everything is great and couldn't be any better for him and all he knows and loves. Everything is certainly heading in a much better direction than under that horrible Obama and much better than if Crooked Hillary had gotten in.
So until we find some way to counter Dr. Goebbels and the Ministry of Fox Propaganda, what do we do to get out of this? The last time, we had to burn Germany and lots of Europe to ashes to dismantle one medium sized country's delusions. How do we fix it here?
1
Thats so funny
2
Just exactly what did voters (mid-west or coastal) expect? Harley Davidson has customers all over the world (including, finally - after a "Prince" puts lipstick on their misogynistic regime - women in Saudi Arabia). They respond to real customer needs - not the ones imagined by tweeters, armchair economists, or wanna-be CEO's (whether in the White House or not).
2
The bull in the china shop is finally doing some serious economic damage. And like the raging bull, Trump has no real awareness of the consequences of the breakage. The only thing that will humble Trump is, unfortunately, a noticeable economic slowdown or a flat-out recession. Remember January, when Trump told the stock market that they were crazy to be selling? He will think that the 2nd quarter GDP report proves him right, but many think this will be the peak of the good news. Reality may set in in the second half, and we'll see how Trump and his gang react.
3
Albeit hard to accept, this president operates under the counter-intuitive school of political sophistry. The truth doesn't really matter. People who voted Trump do so for imagined or real personal benefit, irrespective of the consequences of Trump's policies - i.e.) global warming scepticism, nativist (MAGA) trade relations; voodoo economics 2.0; and the Rule of Trump, instead of the law.
The distinguished feature of the Trump presidency are the scapegoats - the usual suspects - that are blamed for a lack of support, even the GOP-controlled Congress. We have an amature faking his way through his term of office using bombastic cheer-leading to detract from his lack of deal-making and leadership skills.
Trump Scapegoats will be one or a combination of three pillars of American democracy, the Democratic congressional minority; Barack Obama and legitimate media.
The opposing party are easy targets in any political agenda. It takes a maverick president and Congressional leaders to reach-out and work together on mutual interests.
The media is discredited constantly as purveyors of Fake News to mute the impact that the truth would have on a Fake President.
Trump has seriously broken traditition by misrepresenting prior preseident's policies. The Obama attacks are vailed comments embeded with dog whistle racist politics. Truth is that Trump inherited a growing economy from Obama after a long recession that followed the Financial Crisis.
2
"So the Harley incident reveals the pervasive cluelessness behind the administration’s signature economic policy. But it also reveals something else: the deep weakness at Trump’s core."
It also shows the pettiness of this entire administration. Trump considers himself the planet's biggest "brand" but his signature move is capitalizing on failure. In a nutshell, he is trying to make money by failing the United States as a president. He is fundamentally dishonest and self-aggrandizing, and has no morals, conscience or loyalty to his country.
The most sickening part of all this is that our elected representatives and lawmakers are abetting his actions by supporting him and manipulating public opinion. Trump is a deluded individual, but one could hope the majority of them were sane.
We are in trouble. Bigly.
3
Don't you see that Trump is negotiating? He doesn't know what he is negotiating for, besides keeping himself the center of attention, but he's hard at work setting up some deals, somewhere, somehow, some way.
The Harley hogs are symbols of American mid-20th century exuberance. When Italians were putt-putt-putting around on those little looking-for-a-place-to-crash scooters, large bellied 'mer'cans were mounting up their motorized steeds and riding across the wind swept plains, bugs in their teeth and big mama on the back. It doesn't get more American than that.
A president has no right, by the Constitution or the results of an election, to threaten a company with excessive taxation. That is nonsense. Yet, this White House is a gushing fountain of nonsense, so the outage passes away with the next tweet.
Harley-Davidson would not be wrong to announce that the threat of punitive taxation has forced them to consider moving all of their production overseas and into a nation where they would be treated like a valued citizen-corporation instead of being told they must toe the line.
So here's what it looks like Trump is negotiating to get: the next recession. He's so good at this, the greatest ever, he just might get it sooner than he'd like.
6
This corrupt 4 time bankrupt clearly has no business making business decisions.
6
Dr Krugman, Trump does not care about any of this. He distributes slaps and kisses to get people and companies to heel. He does not care about jobs or the US economy. He wants fear and pay offs. This article is about someone who cares, not our actual president or administration.
8
What Trump saw from HD this week is something he must have lived in his own business: that money talks more loudly than even the reddest-faced bully.
1
Wasn't it Trump who previously said it was "smart" of him to pay as little in taxes as possible? Or was that his evil twin?
3
Trump’s only expertise is bankruptcy. It is where he is successful. He destroys a business and walks off with the prize and lets the little people play in the ashes. Don’t expect anything else from this guy. A ten year old playing with matches can burn the house down. And rich kids break things, and then shrug at the destruction saying it was a cheap thing to begin with.
Please vote, encourage others to vote. It is our only check on the brat.
6
I love what he said to H-D: "Don't get cute with me."
If I were Xi Jinping, I would see Trump $200 billion and and raise him $2 trillion. If I were president of Mexico or Canada, I would negotiate deals with reliable countries, not the US.
The game Trump is playing is way over his head. Trump is a two-bit gambler who thinks he won the lottery because Mitch McConnell sold his soul to fill his pockets.
America is not going to allow Trump or McConnell to get away with their carnival con games. Short term is short term, history looks to the long game where Trump and McConnell will be recorded as traitors who tried to subvert American values and justice, but were defeated.
Defeat them we will! Count on it!!!!!
2
His actions explain how someone managed to bankrupt a gambling casino
3
Portuguese president Rebelo de Sousa just summed up the very essence of this op-ed in the most perfect way, during his press conference with Trump in the Oval Office.
Rebelo de Sousa jokingly told Trump that no matter what, Portugal has the best soccer player in the world, Cristiano Ronaldo (and that he should ask his son, in case he wouldn't know ... ;-)).
Trump replied in the "smallest" way possible, asking "Are you impressed by him?".
Anyhow who knows Trump, knows that for him, being impressed by someone other than yourself is supposed to be bad and "weak" - especially in front of tv cameras.
Rebelo de Sousa being a man of strong values and character, however, didn't have any problem admitting that yes, of course, he's VERY impressed (read: by the way he plays soccer, but that was clearly irrelevant for Trump).
Trump seeing that Rebelo de Sousa remained perfectly friendly and open after his attack, rather than taking the bait, doubled down and tried to make his point more explicit, by asking: and if tomorrow he would run for president, would you believe he would beat you?
What Trump clearly expected was that Rebelo de Sousa would start bragging and saying "no no, I'm the best!", and then Trump could teach him a lesson in "Trump ethics" and tell him: you see, you should NEVER admit that you're impressed by someone! That's "loosing"!
Rebelo de Sousa, however, looked down on Trump and kindly explained: Mr President, Portugal is not the US ... .
Enough said.
2
To help keep the peace I would like to see Harley make a one of a kind presidential hog and present it to Mr. Trump. Of course it will have to have training wheels and a hamburger holder.
6
Add a big seat and tiny hand grips.
4
Trump ignores the free press, as well as all evidence. When he was candidate Trump, he proclaimed that America was a shambles, that Obama's rising employment figures were fake, that North Korea was a festering threat. But as soon as he occupied the White House, virtually immediately, America became one happy nation, the continuing good numbers on employment were now more than credible - the best ever - and North Korea had ceased being a threat (with its nuclear arsenal wholly intact). The point is: a man who lies about the number of stories in Trump Tower, makes up his own reality. And the scary part is that the scores of millions who drink his Kool-Aid, believe whatever comes out of his mouth. In spite of all evidence. So when the consequences of so-called Trumpian Policy - I would call it vindictive caprice - come home to roost, Trump will simply take a break from a game of golf and tell his deplorables that they've never had it so good. And the thing is, they'll believe him, as long as they're assured that he's kept multitudes of brown undesirables out of a once again Great America.
3
"Trade wars are good, and easy to win"
Heckuvva job Donnie
We The People want our country back.
VOTE PEOPLE!
12
Don't try to predict predict what's gonna happen with the steel and other recent tariffs. They won't believe you. Tell them what HAS already happened due to his soft lumber and washing machine tariffs that he slapped on last year. Research the actual effects (prices up for the Trump voters, only a handful of jobs crated, companies struggling, dollar cost per job created etc). And again, do give name and ZIP code of every person mentioned in the article.
Nobody will listen to your theorizing. This is America. Bought Supreme Court, bought Congress, bought Seneate, uneducated folks, most can't even read or write properly. They don't have the smarts to follow you and will dismiss it as #fakenews. Stories of real heartland folks are the only thing that might sink in eventually...
3
I'm broadening my comparisons of the U.S. to Germany, to go back to the Gotterdammerung of German mythology. Those who were ready to join the Trump cult were already driven to self-destructive voting.
4
Seems to me there is one thing missing in the talk about the trade wars. I can’t imagine that Trump views China as anything other than the single greatest opportunity for his businesses.
The trade war with China is like the bluster with North Korea—a smokescreen before giving in on the deal. The trade war with China gives him a “tough on trade” image, so that he doesn’t really have to fight (which would have been more effectively done behind the scenes and with the EU in any case).
6
I realize Harley-Davidson is a small player in the larger scheme of American corporations, but anecdotally it may reveal deeper problems ahead.
Specifically, in the bigger picture the import/export sector of our economy is very significant to the US economy and Trump’s tariff policies are likely to initiate retaliatory actions by our largest trade partners, which is already happening in our agricultural sector. In the short run this may help US consumers through declining prices due to oversupply.
What I am curious to see is how the tariffs affect our heavily reliant aluminum & steel, national defense, airplane, and auto sectors. The irony is if the national defense sector is unable to meet their contractual commitments due to higher prices it kind of defeats the "national security" rationale.
In the airplane and automotive sectors the tariffs may reduce employment as opposed to the stated goal of increasing US manufacturing jobs; I believe airplanes are our single largest manufactured export, and US tariffs will be a boon to Airbus.
As to the auto sector, again the irony is foreign based multinationals already have a significant US manufacturing presence and these companies heavily rely on imports for final US assembly. Interestingly enough, VP Pence’s home state of Indiana has a large number of jobs provided by foreign automobile manufacturers and, as in the airplane industry, “national security” tariffs may well result in the loss of jobs.
5
Please stop using math and logic Dr. K. Why does our omnipotent leader, President Clowney McNutcase need economists? Remember he said that only he can fix America. So he is using his special 'easy to win a trade war' plan that was pulled out of some orifice to make America Great Again. Pretty soon all those workers who voted for him will feel his special majesty bestowed upon themselves as they win their way to unemployment. MAGA baby.
18
The "They'll be taxed like never before." remark is the most telling. It implies Trump can unilaterally impose taxes, that he is the law, that we're no longer a nation of laws.
29
And that he views taxes as punishment.
3
One interpretation of “Make America Great Again” is that the working class would prosper like in the good old days. And this was certainly how it was understood by many in the working class. Yet in total, Trump’s policies (even the trade wars) will only further worsen conditions for most workers. Unfortunately, many Trump supporters in the working class do not understand this now because of the short term benefits promised by the tax cuts.
The real message of MAGA is not that Trump would lift workers up, it is that he will beat down those that somehow are doing ok. This approach creates the illusion that those not doing well are doing better in relative terms in comparison to others. In other words, if your neighbors are also struggling and falling behind, then maybe your own conditions are not so bad after all because the same misfortunes are shared by those with whom you consider to be your peers. This is not to say that the workers are happy about their conditions, but rather they are not as disappointed so long as they believe that the misery is widely shared.
10
I've been talking about the tactic you describe, for years.
The Democrats practised it for decades, as did the Republicans; they were both equally capable in this regard, with this newest iteration of conservatism, Trumpism, being a bit more adroit at the game.
Markets, corporations, mainstream media, and governments worldwide, all do it, 24/7/365, and in fact employ multi-billion dollar specialist corporations, to handle this most critical part of their existence; years ago it was considered a tool of totalitarianism, and "good" governments never openly admitted its use.
Propaganda, good old propaganda, now known as "Perception Management", the core principle in any successful enterprise.
The Rendon Group, Rendon.com, one of the largest, saw its fortunes become massive as its particular set of tried and perfected programs, became widely used, by those who required the subtlety of perception being managed, on a global scale, so artfully managed most humans today have no idea that most of their actions result from thinking developed by algorithmic sampling of input from interlinked social media platforms.
Original thoughts are as rare as hens teeth.
By the way, Rendon.com, had as its anchor client, especially during the Iraqi wars, the United States government, and the United States military.
Not one report, from Iraq, and Afghanistan, was permitted to be released Stateside, until vetted, and approved, by Rendon.
3
If what I read is accurate, Harley is moving production offshore for the European market. They face an competitive disadvantage in this expanding market due to retaliatory tariffs in response to Trump tarrifs on steel and aluminum. Harley is not looking to import products back into the US.
I don’t view this as incentive for shareholder value. It is necessary to remain in business. Shareholder value comes when a company is operated properly and doesn’t require gimmicks and tricky accounting.
9
But remaining in business is a prerequisite for increasing value.
Anyway the article adequately outlines the reasons that a company responding logically and legally to a capricious tariff structure that intentionally distorts the structure of the company’s market environment should not involve the vindictive personal intervention of a US president. If you don’t think so, if you think a company should hold personal fealty to the person in the office, then you’re really more of a autocrat sympathizer than a a rational market capitalist. Democracy, commercial markets and their forces are friends and they are not friendly over time to autocrats.
10
We can live with making Harleys in Europe, but not making Kentucky bourbon in France.
See: RevolutionOfReason.com
10
HD has been losing both market share and gross sales for years. HD has been looking to cut production costs for quite some time. These very recent tariffs are merely the excuse. To suggest new and likely temporary tariffs justify the cost of establishing a new factory overseas is dishonest, and I think Mr. Krugman knows this.
The column also fails to note that HD already has 2 overseas factories (Mexico and Brazil) and was already planning a third in Thailand. But don't let the facts get in the way.
9
So what you're saying is that although Trump always liked the HD board of management, now that they claim that they will move plants outside of the US because of the Trump tariffs, it's better to imagine that it's HD that is lying ... ?
If that's the case, WHY are they lying?
And if they've been losing market share, why isn't Trump helping them, rather than threatening to increase their taxes ... ?
Any ideas?
21
The point of the entire article is that HD is only the beginning. There will be more moves like this as international corporations respond to the retaliatory tariff hikes our former allies will impose in response to the trumpster’s tariff hikes.
This is how a trade war works in 2018. You will see increasing trade disruption and job movement as this think evolves.
The man who bankrupted six companies is driving the world economy into a ditch...every thing trumpie touches is destroyed.
1
Somebody better tell Trump about these facts!
1
Trump needs to realize this is just a 'business decision'. "Nothing personal." Trump, being the 'super business genius' that he is, should understand this. After, Trump sources his "Trump" branded goods from overseas, because that's more profits in his pocket than paying higher wages to American workers, and selling less at the necessary higher prices (or pocketing less profit... nah!). So Trump certainly shouldn't get upset when the very conditions he creates result in 'business decisions' that make him look bad. "Doctor, it hurts when I do this." "Don't do that!" But Trump never backs down from a decision he's made. Oops... wait for Trump's Tariffs to be proclaimed to have worked, and then be discontinued. More covfefe and kerfluffle, resulting in nothing.
18
Aside from the negative tariff implications Paul Krugman rightly focuses on Trump's weakness. He defaults to pandering, in this case to his belief that those who ride Harley Davidson motorcycles are all or are primarily his supporters. Trump's entire focus is on media optics and sound bites intended to stimulate his supporters and attract new ones. Demonizing those he believes that his supporters also distrust or fear is what Trump does numerous times a day perpetuating in most cases lies that repeated enough become beliefs among his cohort.
We saw how Trump's pandering to his supporters by separating children from their parents was met with an uproar among a majority, although not by as big a majority as one might have hoped. His impetuous decisions driven apparently by what he has most recently gleaned from Fox news or guesses might play well with his supporters have already and will continue to back our country into untenable policies. We can hope that more will see his hypocrisy, like that he displayed yesterday by praising Foxconn and demonizing Harley Davidson, 30 miles away. His weakness will become more obvious and may well excite broader voter participation this November.
7
The motorcycle icon is a symbol of freedom among its employees. The management style is the precise opposite of authoritarian. It’s about freedom and motivation. The Harley-Davidson board and executives provide freedom and motivation to employees in their operations and work projects. Their people and products past and present are authentic and consistently accomplished. Cultures have grown out of their work styles and work products. For more, see the documentary Happiness At Work which profiles in part the icon’s business philosophy and practices.
If this is an argument about culture, it sounds as thunderous as a Harley-Davidson vs. a Team Chump.
8
Peter Navarro and Larry Kudlow are living proof that apparently any head of hair can become an economist. Stormy Daniels understands more about trade than these two. At least she gets the concept of supply and demand. And market-based pricing.
55
While Europe and China do well to fight back against some small but visible sectors like motorcycles and bourbon, will they have the guts and ability to fight back against some truly big players like American banks?
2
That is an interesting question (although the agriculture industry will take larger hits). The complication here is that banks are mostly multi-national, or even exo-national. Think of the machinations that will go on in say, Citibank, that has operations everywhere. Arbitrary trade restrictions result in very real monetary effects.
3
When consumer prices begin the unavoidable rise and corporate profits their probable declines due the to the battle that the president believes is easy to win, will all American's enlightened self interest (a basic tenant of capitalism) dump him and his posse for the fools they are?
I'm sure that there is now a working group assembling the reasons for the inevitable failure of the president's policies, that the failure is because others don't support the president's policies strongly enough.
To the extent China lends to the US, it is hostage to its economy.
1
Trump's big problem is that he's not reality based and when you argue against reality, reality always wins. Trump cannot allow this. He could lose his base.
Eventually it will all be his fault. He'll lose his protection and the Republicans will throw him in jail to to avoid their responsibility.
14
As Mr. Krugman wrote "Rule of law? What’s that?"
Rule of law has been one of the qualities that separates the U.S. from Russia. Thanks to Trump and his Republican enablers (Mitch McConnell, Paul Ryan and others) and the Citizens United Ruling (courtesy of Scalia, Roberts, Thomas and Alito) were are becoming a nation in which those that have the money dictate the rules.
Thanks to the SCOTUS ruling this week regarding union fees, the country is on a race to the bottom. Get ready for the New Gilded Age.
Trump is the rampaging bull in the china shop who fails to understand the consequences of what he does.
28
Trump breaks the plates as you say, and doesn't care that there is broken china. He wants ex-Harley employees to clean up the broken mess to show his dominance over all who dare to challenge Oz.
3
Or, as Winston Churchill is reported to have said of US Secretary of State John Foster Dulles
'He is the only bull I know who carries his own china closet with him.'
2
It's a great quote and applicable to the current occupant of the White House.
The trade/foreign policy of Donald Trump indicates a major re-positioning or re-pivoting of the US in global affairs.
The post- WWII US corporation-led global economic integration is over. American taxpayers can no longer afford to pay for the US global leadership of the so-called free world.
Naturally, Trump's policy will create winners and losers. Among the losers, America's main trading and military allies in Europe and Asia, particularly Japan.
An important question is whether Trump's policies are temporary or permanent.
One thing for sure. IF Trump is reelected the changes made during his first term have a good chance to become permanent. In this case, as the French say goes Adieu l'Ancient Regime.
5
Please expand on "...US tax payers can no longer afford..."
Trump's entire act is about symbolism over substance. Because that is generally a bad formulation doesn't mean that it's always a bad formulation. It is invaluable to adapt to the circumstances: in normally times act normally and in threatening times act differently. The actual outcome can be steered away from what "should happen" through the selective but committed application of the craziest person wins strategy: Little Round Top, the Battle of Gettysburg, and arguably the entire Civil War turned on the calibrated craziness, genius, and grit of Col Joshua Chamberlin ordering a bayonet charge into a Confederate line armed with muskets.
Trump's completely uncalibrated, excessively crazy, utterly lacks genius, and has no grit. But that doesn't mean that a President with more innate worth would not do well to read up on the rare virtue of being willing to succeed or die trying.
5
war by instinct is one thing-- its about minute-to-minute survival. As Hunter S. Thompson said, when the going gets weird, the weird turn pro. But government (which is not minute to minute and should be about much more than survival) by people who use only their brainstem to operate, isn't going to work out so well over time...
3
I don't care if Trump dies trying, as long as he doesn't take the rest of us with him.
2
As an owner of stock, I have been waiting to see the benefit of the Trump tax cuts, as consolation for watching a fascist takeover of my country. My stock went up initially. But not really enough to make much of a difference. And the dividends have not, as I'd anticipated, gone through the roof. They're going up a little.
Is the tax cut money going for executive salaries? Where is this wondrous benefit to ordinary stockholders?
53
" . . . no one in the administration has the slightest idea what he or she is doing." Actually, they do. They are scrambling desperately to keep the not so clever folks in Trump's base loyal. Without those folks, Trump doesn't own the Republican party and he is toast. Problem is, the economic ideas of the folks in Trump's base are largely a function of their delusional self images and could hardly be worse for their actual economic self interest.
Rather than tilting at the windmills of Trump's base, perhaps Krugman could address something which might matter to some of his own base. For example, how best to be short the American economy? Better yet, how best to own what amounts to cheap three year far-out-of-the-money puts?
12
This phony trade war nonsense is political, not economic. Trump is hoping the same gullible Democrats that voted from him in 2016 will stay with him, thinking their jobs will come back. What's actually going on in the economy that matters:
1. The 10-year deficit trajectory was $9.4 trillion under the Obama baseline (January 2017); now its $13.7 trillion, a nearly 50% increase (CBO April 2018 alternate baseline). That increase is about $34,000 per family, a lot more than the $900/year x 10 = $9,000 the middle class is supposed to get assuming the individual cuts are extended.
2. We created about 3.5 million jobs in Obama's last 16 months, vs. about 3.0 million under Trump. Yes, the pace of job growth is slowing.
3. We're up about 3-4 million insured since Obama left office, mainly due to Trump's sabotage. The new CBO baseline is about 7 million more uninsured over a decade vs. the Obama baseline.
So much winning in such little time! Perhaps those gullible Democrats will look back and realize tax hikes on the rich to pay for college and healthcare is a pretty good plan instead of all this damaging chaos.
8
And what Trump’s alleged experts have to say about the controversy offers fresh confirmation that nobody in the administration has the slightest idea what he or she is doing.
Trump's upcoming tariff of 25% on cars exported from Canada (constructed mostly with parts made in the US and Mexico which are shipped to Canada for assembly) has analysts in Ontario talking about 'carmaggedon' - an event neither the Canadian nor the American auto sector can afford as it will lay waste to the Ontario economy, twenty five percent of which will be directly impacted, severely damage the Canadian economy, and destroy the auto industry on both sides of the border. Well, Obama saved the US carmakers, so maybe that's the reason Trump is out to destroy them. T R U M P is how you spell bad news up here.
16
Mr. Trump's world is driven by two things: iconography and hagiography.
He screams at Harley-Davidson because it is an American icon just like the American flag waving in the photo of HD headquarters in this op-ed. HD may represent the US but it is not the US. Even if it shuttered all its facilities worldwide, the US economy would barely notice.
The real dangers come with conflation of icons with Mr. Trump's persona. His rampant narcissism requires him to festoon everything he touches with huge letters proclaiming his part in everything "important", usually in gold and usually several feet tall.
I would suggest people who require continual affirmation of their power and control are most commonly the least powerful and least respectable among us. Trump has not (yet) followed the lead of the late leader of Turkmenistan, Saparmurat Niyazov, who renamed months of the year after his family and himself and built a large golden status of himself in the capital which turned to always face the sun.
But Mr. Trump keeps trying to eclipse his past excesses with new ones.
8
Seldom before in the history of the human race has the ignorance of so few had such a profound effect on so many. (Apologies to Winston Churchill.)
Trump promised to bring back the jobs. Instead, he's actively chasing them out. Can anyone in his administration think more than one step ahead?
6
I don't think this trade thing is about jobs, or the economy. I think this is about disruption for its own sake. Getting H-D to cut and run puts the lie to the patriotic icon. H-D is about one thing, making money for wealthy stockholders. Will we see Chinese Harleys?
This is a Russian designed plot to get everybody in the west at each other's throats. Putin wins. The ultimate Putin KGB strategy.
3
Reminds me of the parable of the scorpion and the frog. Even when Harley puts Trump on his back to carry him across the river. Trump promises Harley that he wont sting Harley, Harley reluctantly agree to do so. Instead halfway across the river, Harley gets stung by Trump and they both drown. Harley says to Trump, "Why?" Trump replies, "Because for its in my nature to do so."
9
Meanwhile, the US Chamber of Commerce sits idly by, afraid to anger their Master and the US Stock Market drops, which impacts anyone with a stock-invested pension.
8
Poor Harley, there have been lessons learned, things like M V Agusta, which they owned but could not profit from, were just to complex for The Motor Company.
4
Why doesn't Harley Davidson build a small but suitable for future expansion motor cycle plant in Europe ? I am sure this would result in a lower price than the cost plus tariff added on to the USA produced motorcycles now. Why is only Asia considered so far for the production that would go duty free to European dealers and consumers ? Just build the plant in France or somewhere in the EU. The production will also just be sold in the EU, or could go tariff free to other countries than the USA.
6
It's because Asia has much worse labor laws than Europe, and as a consequence, companies can exploit workers much more in Asia than in Europe, all while already benefiting from the strong government investments in infrastructure (contrary to Africa, for instance, which has none of both, but where Asian subsidies and workers are now building the infrastructure - and simultaneously trade relationships that go with it).
The only way to stop this is to negotiate trade agreements with Asia (and Europe and Canada) that LOWER tariffs, all while including stronger labor protections, both at home and abroad.
THAT is what will increase rather than shrink trade, and benefit both Asia, Europe and American workers ...
9
Trump has the attention span of a fruit fly. He expects to solve problems like North Korea with a single meeting. To restore American industry by imposing a few tariffs and ticking off our best allies. But he has no interest in a long game, which is exactly what international trade requires.
Harley is doing exactly what Trump said he would do with his own taxes. Managing their fiduciary responsibility for shareholders. Why is he surprised?
32
I just want to emphasize how much Trump feels he is personally owed, for a tax cut he feels he gave personally, and how he expects to be repaid.
Trump used tax dollars to buy personal loyalty to him, and therefore expects Harley to waste shareholder dollars to let him pretend he is winning bigly.
Remember when Trump told the president of Mexico that he had to just say Mexico would pay for the Wall or Trump would look bad?
Personal power and the pretense of invincibility means so much to this man, because he’s psychologically wounded, and because his followers think they are sharing in his winning.
56
If I was Mueller, I'd think this might open a whole new course of investigation. Has Trump been "good" to Harley? What does being "good" to them mean? Maybe there's more to it than tax cuts and an audience with trump.
3
Trump has presumed kingship of a private patronage empire funded with public money.
2
" . . . because he's psychologically wounded . . ." I think this often. If he wasn't such a danger, I could feel sorry for him. So many of his actions and bluster seem an attempt to compensate for whatever he experienced early in life. Maybe this is what links him to his supporters, who probably were also damaged as youngsters. Child abuse and neglect are epidemic in the US. Some of these children must grow up to be Trump voters.
How is it that the new tax bill which was sold as making it easier to retain and get American jobs is not enough for Harley Davidson? Because it like all corporations wants even more. And since money made outside the US is taxed at a lower rate than money made in the US, more companies will do the same. America, the GOP and Trump have conned you. If you rightly ask why are job numbers up, well it’s because those employers don’t have a lot of offshore subsidiaries or vendors. If they did, it would be a different matter.
7
The tax cuts for jobs act will result in many deals that do nothing but enrich top management.
5
The failure of Trump economic policies will take time to show their fallacy. Whether the voting public actually looks at the data and results of his policies is another story entirely. My guess is the voting public will remain economically and financially clueless just like Trump.
31
Yes, and in 7 (or 3 years hopefully) it will be a Democrat President’s fault the economy is in a shambles and we’ll have to bail it back to health again...but make no mistake, it will take some incredible diplomacy and also federal regulation of campaign finance and corporate television/social media to make the Trump supporting public stable enough for foreign powers to believe America’s stable enough to enter new partnerships with us.
We are screwed for 50 years or more. As long as GenXers are alive we will be paying for what is currently happening.
1
I suspect that somehow, in some way, Trump and his family are looking to personally profit from these tariffs. Not sure how exactly, but almost everything Trump does involves personally enriching himself.
I honestly think he could care less about the negative impacts of his trade and economic policies. As long as he can make a buck, everything is wonderful.
28
I would suggest Trumpski makes most of his money by borrowing from dumber folk and then using his lawyers to avoid paying it back.
1
With all the trotters and tripe taking place under the banner of Trump and his news media, it was only a matter of time before Harley showed up.
On the arrival of summer, while playing tourist in my neck of the woods, a magnificent red Hog blazing in the sun caught my attention, but it was the jacket emblazoned with American war symbols and the owner of the above, that were of particular interest to this viewer.
A veteran of Vietnam on the eve of the fourth of July, he was quiet, patient and gave permission to have a photo taken. With some hesitation I ventured that our country had never been so secure, while he suggested that this might not be the case in a military scenario.
The thermostat is rising here at early dawn, and those of us fortunate to have breakfast on the table, or on the run might not notice if a paucity of bacon is in the economic forecast.
Trump appears to be mastering the Art of Persuasion, with an eruption of temper, and if the producers of Harley do not toe his line, they may be in for a long walk.
An injury to Harley might seem to be a trifle, a pig truffle in the larger scope of economics, but it brings to mind that countries have been known to founder for want of a nail.
9
Trump is definitely the type to forget to bring nails when swarming an enemy position to spike its cannons. That's how Napoleon lost the Battle of Waterloo.
2
All absolutely 100% true. Much of Trump's bluster about trade is directed at a domestic audience. It's largely a PR stunt. Hence when some serious reality pushback occurs he and his become hysterical and start lying. This is a lesson not lost on China, the EU, Mexico or Canada. Bad headlines in the US represent the most potent leverage against Trump.
48
Good post. In fact, you could say all of Trump's bluster about anything is a PR stunt, directed at a domestic audience and designed purely to aggrandize himself. And when Trump isn't blustering, but doing something quietly and in secret, worry even more—because it's probably all about fattening his wallet.
5
I wonder how Dr. Krugman can be a compassionate and well meaning liberal and at the same time remain blind for the consequences of globalisation, effectively advocating unfettered free trade like it's still the 90s. It's not hard to see that corporations are reaching historical record sizes, they wield power over politicians (revolving door, campaign financing etc.) and can shift their locations of capital, factories, profits, workers, ... to the places with the least regulation and lowest tax burden, because our governments give them this freedom.
The effective tax rate of corporations is going down fast in all Western countries and this is a big problem. Moreover, global trade has a lot of undesired side effects, like contributing to climate change (e.g. do we need really need apples in the winter from New Zealand?), but let's leave that one aside even.
Import duties are an effective way to force more local production, especially in markets that are too big not to be significantly present in, like the USA. Trump may be doing it for all the wrong reasons, but let's look at this with an open mind and stop the disappointing pars pro toto with hogs, soybeans, ...
2
The answer to corporate overreach isn't destroying free trade, however, it's creating more consistency in regulating and taxing businesses across the globe. Better regulations and better tax rules, consistently applied globally are what we need. A global economy is a good thing, but it needs global governance. Trump, with is tendency toward unilateralism, nationalism, and isolation, is taking us in exactly the wrong direction.
36
I would agree, if I thought it to be possible. But, I think the EU proves its scale (so the US's too) is effective enough at reigning in corporate excesses in the areas it has control over, like fair competition, product & food standards etc. It fails to prevent excesses in the areas where countries are left competing against each other, not in the least corporate taxation (e.g. Apple's 1% total tax for the whole EU, via Ireland). A larger scale of regulation and taxation is in my opinion not really needed nor realistically possible.
My take is that, akin to the Alexandria Ocasio-Cortez upset, it would maybe be good to have another economic pundit here who is progressive both socially and economically. To my liking, in the latter area, Dr. Krugman is too moderate and Wall Street friendly.
Globalization - BOO! Scared you,eh? Krugman does not believe in unfettered free trade. He is an economic pragmatist. Maybe the Koch Brothers believe in the invisible hand, but then why are they so busy spending money to influence politicians and snooker regular people? Real economists know that tariffs and trade battles have consequences. Trump looks at the ratings while eating his 2nd bowl of ice cream.
2
What happens when people in other countries don't yearn for products that symbolize the USA? I suspect that people in Asia and Europe are changing their minds about whether they want to buy something that celebrates being affiliated with our woebegone nation. That is a bigger threat to Harley than any tariffs.
61
America's image and standing in the world strongly increased under Obama, but indeed, nobody has been so bad for America's "brand image" abroad as Trump ...
And of course, IF he wants to reduce the trade deficit (instead of doing what truly benefits the US, which is reducing the federal budget deficit rather than doubling it, as his tax bill does), there's an alternative to what he's doing now: for the moment America buys much more stuff made abroad than selling "made in the USA" stuff across the border. "Reducing" that deficit by reducing all international trade, as Trump is doing, is one option. Reducing that deficit by exporting MORE "made in the USA" is of course the other option, and THAT would truly benefit the US economy, rather than shrinking trade, as his tariffs do.
There's only one problem here: you need to know something about economics to know that this option exists.
Second problem: it means not merely keeping the Obama economy, as Trump did during his first year in office, but ALSO taking over and continuing Obama's international trade agreements, as they did exactly that (increasing international trade, all while imposing stronger labor laws both abroad and at home). But ... Fox News told the GOP base to hate Obama, whereas the Trump presidency only gets a high approval rating among Republicans BECAUSE he retweets Fox lines on a daily/hourly basis ...
8
Unfortunately that is the reflex a lot of us are having. I don't want to buy American anymore.
2
Think about what you need and what you want. Hogs are a want. We also don't need Life is Good caps, I Phones, restaurant meals, huge TV's, yachts, private planes and second houses. However, those additions to our life, lets call "stuff" may make us happier and may have a reason for being. They are large components of our economy and if taken away would put us into a huge recession. Healthy businesses are in general good, irrespective of what they produce. We area the wealthiest nation because we make more "stuff", not because we make more needed items, although Whole Foods might argue. When we have recessions, we cut back on discretionary items first to preserve more essential items in our budget and this goes from low income to higher income. (remember 47% of us are moochers)
Think about it, this is a huge vulnerability. We cannot cut back on discretionary consumption, or excess health spending or Hogs, without disrupting our whole economy. Waging this trade war is like going to battle with swords made by the enemy. (yeah, swords because trade wars are that old, next we can re-fight WWI).
15
Vis-a-vis making "more stuff," I thought that the American economy had shifted to more of a service economy, for example, health care services.
Is Health Care a need or a want? If you maintain it is a need, I'd accept that, but realize that in the US we pay 2x the amount in Europe at 18% GDP or so. So we are getting overcharged. So is getti overcharged a need? Suppose we stopped the overcharge, Then we would have a 9% hole in our economy, producing an enormous recession. The end result is the same, half of health care is stuff.
Up next: US automakers. "Two major auto trade groups warned the Trump administration that imposing up to 25 percent tariffs on imported vehicles would cost hundreds of thousands of auto jobs, dramatically hike prices on vehicles and threaten industry spending on self-driving cars," reports Reuters.
https://finance.yahoo.com/news/automakers-warn-u-tariffs-cost-134225017....
21
In the same report, the Alliance of Automakers said "its analysis of 2017 auto sales data showed a 25 percent tariff on imported vehicles would result in an average price increase of $5,800, which would boost costs to American consumers by nearly $45 billion annually."
23
Another piece of evidence - all this keeps American workers scared - that is the point- union busting and fear.
1
I know what "Harley culture" is. It's the company's carefully-coiffed image of patriotism, bringing back the POWs, flag-waving jingoism. I got my first Harley in 1974, and, except for an interlude of several years due to financial and other constraints, I have been riding Harleys ever since. I have stayed loyal to the brand in spite of its image as a Joni Ernst - Paul Ryan - Sarah Palin backdrop. I now feel pride of ownership. Even though H-D's move was driven by economics, not ideology, it is nice to see them on the side of good for a change.
26
On the side of good? They are on the side of their pockets, as any company should be. They sure didn't mind sucking up to Trump when they visited him in D.C.
1
Commendations! A well measured piece that isn't just thumping on Republicans.
Mercantilism is trump's economic policy. It never worked well in history, rewarding antiquated industry at the expense of innovation and efficiency. Ultimately it is the consumer who suffers with excessive costs and poor quality goods.
Translated into today's economy that means picking favorites like coal and steel at the expense of energy users and product users- that's a relative few people propped by everybody's burden of cost. Ultimately Trumps policy will backfire in economic stagnation. I'm pretty sure mister Trump never read any history books on the great age of European Mercantilism- maybe very few books at all since it is hard to read while tweeting and watching Fox News.
46
we are probably missing the picture that young rides are choosing non Harley's and that HD market share has been decreasing in the USA anyway. How many aging Boomers are buying HDs at this point in time? It would strike me that the numbers are decreasing and Europe and Asia are the growing markets anyway. Why build USA with tariffs and shipping and labor costs when I can move everything to the burgeoning markets?
Trump seems intent on the old economy as opposed to the new economies. As Arnold Schwarzenegger asked Trump, bringing back Blockbuster next
39
Somehow in the story over tariffs, we missed the fact that last month Harley Davidson announced that it would close its Kansas City plant and lay off nearly 800 workers.
These plans probably were in the works long before the tit for tat over tariffs. This downsizing and overseas shift of manufacturing came on the heals of profit taking from the Trump tax cuts.
It shows that companies flush with new cash don't change their basic strategy to make even more, even if it means cutting US jobs and investing cash in "new emerging markets."
The biker groups that have an annual parade in DC should remember this. But that's too much to hope for.
43
Indeed, the union pointed this out. No way the new closure could have been decided this quickly in response to the tariffs. Trump simply provided a rhetorical excuse to the company for what they were about to do anyway.
4
Harley-Davidson decided to make this move after Trump withdrew the United States from the TPP, which would have been our bulwark against the rise of Chinese economic hegemony in Asia.
6
You buried the lead, Dr. Krugman, when you wrote at the end of the column "If such a small pinprick upsets Trump so much, the odds are pretty good that he’ll blink in the face of real confrontation."
We have already seen it during his photo op meeting with Kim Jung-Un.
Beyond this, to paraphrase Stuart Smalley, every day in every way, Donald Trump acts dumber and dumber. So do his putative "advisors."
How can such a great nation be led by such a small man? If he were not president he would be nothing more than annoying pimple.
How many days until the 2020 election>
128
Right about that, Charley James. Trump has a history of folding when faced with real confrontation. And running when things get tough. Declaring bankruptcy and fleeing his creditors. The future is not looking good for America.
3
Harley-Davidson is just doing what any other companies in the same boat would be doing. They are reacting to market forces which they have no control over. The fact that this is a direct result of the retaliatory tariffs because of President Trump’s tariffs is lost on many people.
This is just the first impact as a result of Trump’s trade war. When the soybean and pork farmers get impacted then you’ll get to see why trade wars aren’t easy to win.
37
Don't forget the manufacturers who are already being impacted and jobs being lost. The layoffs at Mid Continent Nail in Missouri are just the start.
7
Now watch while the "free market" True Believers attack Harley Davidson for responding to (government-imposed) market forces, and applaud Trumps threat of interference with company management by punitive emissions taxation. The problem apparently was never government interference with the "free market"; it's just government interference towards goals they just don't happen to like.
7
It looks as though Mid Continent Nail can move to Mexico and import finished nails without tariffs.
If I understand this situation (big IF),H-D bikes imported into Thailand have faced a 60% tariff as well as a large export tariff with trans-shipped to other Asian countries. However, bike parts shipped to and assembled in Thailand face a much lower tariff in both directions. Asia is a booming market for H-D and the U.S. is not. Therefore H-D moves to Asia.
It is possible that the Trans-Pacific Partnership might have fixed all these tariff woes but we will never know.
Another "win" for the World's Greatest Deal Maker.
46
Trump's economic team shows both a frightening lack of understanding in how a globalized economy works and a massively overblown view on the actual impact of any American decision or the way in which other nations or groups of nations can and will react to such a decision. It is as if Trump thought that he could unilaterally change the rules of the game and that the EU or China or Brasil or ... would have no choice but to accept meekly.
It is also as if Trump didn't (doesn't?) know that American brands, too, depend on a free flow of parts and components from across the world to make stuff that they then market as "Made in the USA" or that their bottom-line is impacted by sales in markets outside the US. For someone who has personally been active all over the world in promoting and building his casinos, resorts, hotels and golf courses (and who may, as a result of this be in hock to [the] Russians?) this lack of understanding is mind-boggling.
The really worrying bit is that Trump "doesn't make mistakes". He is likely to persevere and to blame others if and when his tariff one-up-manship doesn't deliver the results he has promised himself. This; too, is likely to get much mich worse before reason sets in again.
97
trump is a bully and a snake oil salesman. His base loved the bullying and believed the snake oil was the tonic to solve all of their problems. Now, trump needs to deliver the promised results, and still holds a bottle full of nothing at all. He's also discovering that foreign nations are not construction contractors who can be bullied. Yes, this is likely to get much worse.
1
What worries me is that the damage Trump inflicts on the U.S. economy will only be felt on the ground after he leaves office. This is most likely a time when a Democrat may win office and the resultant loss of jobs during this time will be blamed on the Democrats.
154
I agree, It always happens that way. Republicans screw up the economy with their policies, but the delay factor means it that the damage is manifested under a Democratically controlled Congress or President. The Dems manage to turn things around with their policies, but once again, that delay factor means that the recovery takes place when the Repubs have the reins. Clinton cleaned up the Reagan Bush mess, Obama cleaned up the Bush II mess!
1
What scares me is this could become "the good ole days". What our futures hold may be much worse.
1
The only thing of any significance here is that when faced with facts lie and issue a treat.
In this case the economy is at stake. In other cases the same behavior threatens our democracy. That’s not hyperbole.
32
Wait. Are you saying Trump, the very stable genius, does not know what he is doing? Should we ask to see his transcripts from Wharton?
Why we don’t drive Australian cars
Paul Krugman is right as (almost) always. After the second world war the Australian car industry is greatly stimulated by the Australian government. One of the car builders is Holden (a high profile coach builder). The car industry is developing and also major brands (GM) are investing in the Australian automotive industry. The industry is healthy and seems ready to conquer the world. In the 70s the car industry is in full swing: worldwide: more and more people can afford a car; there are plenty of opportunities for the car industry. The Japanese automakers have understood that well and are exporting cheap cars all over the world. The Australian government is now taking a disastrous decision by importing high import duties to protect domestic production, afraid of the Japanese wave of cars. This indeed protects domestic production for a while, but also has the consequence that the innovation in the Australian car industry is stagnant. There is no foreign pressure to remain technologically progressive. If the Japanese companies then start building factories in Australia to avoid import duties, the plea is settled. The Australian car industry is being put on a huge backlog. The Australian car industry has disappeared, while it was an industry that potentially has worldwide could have operated. The immediate consequences of protectionism always seem to be (relatively) small at first but it can destroy a complete industry.
98
I think you have done more economic and trade policy analysis here than is evident in all the papers and reports made by the Administration.
There are many factors that influence national economic performance but the path chosen, seem to be signaling that there are many potential problems areas that threaten continued success.
https://www.nytimes.com/2018/06/25/business/what-is-yield-curve-recessio..., "A Recession Signal Is Flashing Yellow"
Between the lines of this column one senses that the expertise of economists, economic historians, international relations experts and scientists are not being given access to the policymaking process. Our Federal bureaus, agencies and laboratories are full of people dedicated to studying signals that measure the changes in climate, the economy, diseases, etc., but one gets the impression that their findings are being ignored.
Thanks to what is reported, I can see that signals are flashing yellow in many areas and the expected responses are not coming, instead the flashing yellow signals are being ignored.
I think we are missing some great market opportunities to make life a lot better for humanity. There is a role for a good government in many areas, which should not be ignored. There are too many to list but when one only considers the commons like air, soil, water, health and the industrial processes based fossil fueled transportation and agriculture and electricity, we know the potential is there but ignored.
30
Krugman complains about how Trump's reactions demonstrate "hysteria that other countries will surely see as evidence of Trump’s fundamental weakness." This may be true, but as essentially political phenomena they may not have automatically dire economic consequences.
And for the political consequences of Trump's bumbling to be unarguably evil one is forced to assume that shrinkage of the American footprint in international affairs is necessarily a bad thing. But maybe it isn't. Maybe a greater sharing of responsibility for leadership in the historical Western alliance, once the need is understood and accepted, will unleash a wave of creative energy that can shake us all out of our collective lethargy.
On the other hand, if US leadership is actually the indispensable key to world peace and stability, Trump's abdication will underscore that essential truth. And when Trump is finally replaced by someone more normal and ordinary, that fortunate mediocrity will be celebrated as a fountainhead of unerring brilliance.
So, either way, we'll learn something important about what makes our strange new world tick and whether our received verities still have any juice left in them. All I know is that I'm booking my tickets early for the next "Miss Leader of the Free World" pageant. It should be a doozy.
4
The great lesson learned, after the two World Wars, was that in order to prevent a third, no country should be isolated or isolate itself internationally.
Because when that happens:
1. its political leaders no longer care about world peace so become more and more likely to do something - accidentally or not - that triggers an entire world war.
2. its citizens are ill-informed and much more vulnerable to fake news spread by political leaders and ideologues.
Most international institutions have been found after WWII and in order to create platforms to allow the entire planet and its leaders to constantly continue to at least talk to each other, and to increase multilateral collaborations (military, economically, education, disaster aid, ... ), which then makes it much more difficult for one or the other crazy demagogue to get elected and turn his country's voters against "the world" or another country.
So yes, when the wealthiest country on earth, and the one with the biggest economy and military, starts withdrawing from the Human Rights Council, the Iran nuclear agreement, the Paris Climate agreement etc. and publicly takes a verbally highly aggressive (and clearly not justified) stance towards the leaders of ally countries, all while launching a trade war ..."the American footprint in international affairs is shrinking" and that IS necessarily bad, and clearly NOT a matter of "sharing of responsibility" ...
83
The United States is no longer leader of the free world. Mr trump has no knowledge of how to be a leader - he bullies and threatens to get his way. We may be leader of the dictators club soon....
3
Trump's attacks on the cornered American manufacturing icon is symbolic of the overall Republican lust for a quick buck at America's expense.
The original debate was about how to return American companies back to America. Trump has twisted it into a money grab through taxing the world to offset the massive tax cuts and the Republicans legislated a lower foreign profits tax than the reduced national corporate tax rate. The original tax legislation, signed by Trump, should have made the foreign profits tax rate higher to promote the return of American manufacturing. Instead, the Republicans are trying to play whack a mole with the looming debt through taxes on trade cynically called "tariffs to protect industries".
In yet another example of the reckless management of our economy, Congressional Republicans legislated allowing the export of our most vital strategic resource, the fuel and foundation of everything in America; Crude Oil, whose price has escalated from 27 dollars per barrel during the beginning of the Trump campaign, up to today where a barrel of Crude oil, West Texas Intermediate, is priced at 73 dollars with no sign of stabilizing or reducing. Beyond partisanship, the fact remains that under Republican governments over many decades, the price of oil went up, most notably under the Oil Man, Bush jr., and those prices decline under Democrat presidents such as when oil was under 15 dollars a barrel under the terrific Clinton economy that saw great expansion.
21
It is, my dear sir, better to be thinking solar panels and wind farms than the price of oil! The price of oil will mount and with any luck most of what is in the ground will remain there. If you are thinking about long term prosperity, renewable energy is far more cost efficient than oil.
56
I concur wholeheartedly. I have my own solar panels that will last beyond the 25 year warranties, but being practical, oil will remain a vital resource impossible to totally replace in the near and moderately distant future.
2
Indeed. Also worth noting: while Bush Jr. waged war on Iraq and Afghanistan (racking up trillions in debt), the Chinese spent a decade crafting alliances and inking deals for oil, precious minerals, and other strategic resources. They have since accelerated investment with their trillion-dollar One Belt One Road initiative. At this point, the only one benefitting from higher oil prices are the Saudis--who with the U.A.E.--were illicit funders of the Trump campaign.
https://www.nytimes.com/2018/05/19/us/politics/trump-jr-saudi-uae-nader-...
https://en.wikipedia.org/wiki/One_Belt_One_Road_Initiative
28
In response to Shakinspear how writes
"Harley-Davidson is a tradition filled company made in the U.S.A.'
Harley WAS a tradition filled company. NO LONGER. It is difficult to get information on "How American" (econo speak content distribution) of a Harley is , as Harley lives and dies on the image of being an All American company
But in 2014 , in a conference call the CEO stated that more than half of its supply chain of its popular entrance model was foreign sourced
More recently , USA TODAY noted in its headline
"Harley-Davidson motorcycles are American classics made with foreign-sourced parts"
https://www.azcentral.com/story/money/2018/06/28/harley-davidsons-americ...
Harley's has morphed from an All-American Company into an International company (as did tax payer saved GM, that last year sold more cars in China than in the US). Harley long term goal is not the EU (Note: Harley's Bawal, India, manufactures street models for India AND Italy, Spain, and Portugal ) but the Chinese Market.
It is building up its Thai factory with the aim to deliver to the that market. Moreover, Harley is not just outsourcing its part supply chain, it is outsourcing its most advanced design the V-Rod engine (designed by Porsche in Germany)
In that regard, it is more international than Apple, that at least keeps the design part in the US
Disclosure : I own two motorcycles
33
Thanks for the education as I recall in my memory watching Harley riders riding in unison on a summer day proudly displaying bigger than life American flags. The buyers certainly believe Harley Davidson is an American corner stone of national pride.
5
That is the beauty of capital. It confuses us with its many metamorphoses. The most confusing one is its “national” attribute while in reality those temporary forms don’t last too long in historical terms. Capital cannot be conceptualized without its self expansion in time and space (although in it space gets anihilated by time)
3
A 21th century economy indeed means that only small businesses can still be called "American", but even then you have to ignore the fact that many of them rely on products coming from abroad and that are so cheap that it allows them to keep their company afloat ...
That's why a trade war is truly the most stupid idea out there.
What is needed is the exact opposite, such as the Asian-Pacific trade agreement that Obama managed to obtain, and where we accept to buy MORE stuff from them, on the condition that they buy more from us AND start respecting labor conditions a bit more (not doing so being one of the main causes of why they can produce things in a way that is so much cheaper than we in the West).
2
The cost of the steel in a motorcycle isn't a big enough factor to make any real difference to the company. It's all about the retaliatory tariffs.
Motorcycles are pretty light and Harley-Davidson makes an awful lot from the brand. Take one of Harley's cheaper bikes, the Iron 883, for example. It weights 545 lbs, about a quarter of a metric ton.
The spot price of raw steel is $909 per metric ton. The value of the steel in that Harley is $182 without tariff and $227 with. So it's a $45 difference on a retail $9,000 motorcycle. That's half a percent on the retail price, maybe 1% on the wholesale price.
US H-D riders would easily pay that. Foreign customers aren't as loyal as American customers and would quickly substitute a German or Japanese model if the price went up 25%.
Harley-Davidson has made a large investment in building their brand overseas. It would be stranded investment if prices went up.
25
Companies strive to maintain operating margins on their sales prices, so if total raw materials cost 25% of the total price, if they go up by 0.5%, the price of the vehicle will rise by 2%. You reach a point where customers will find buying used or maintaining old bikes is more cost effective.
4
Unfortunately it appears that at the beginning of his Tweet DT got it right. HD isn't moving because of the tariff war. They are moving, like everyone else, because of wages. They have taken the opportunity to claim that it is because of wages, but that doesn't make it so. They had made this decision a long time ago and the recent tariff issue was just an excuse for them to get it out and to blame it on something else then their need to increase profits at the expense of the US worker. Does anyone really think that if tomorrow the tariff war with the EU was ended that HD would cancel this decision.
8
Call me anyone. Harley has dealers and customers in Europe to worry about. They are of more matter than the Donald who is quite useless.
They can send one guy with a checkbook anywhere and motorcycles will be built.
Mass production has moved entirely beyond Bert and his stick of Norton fame.
Harley-Davidson is a tradition filled company made in the U.S.A.
Their announcement to move some manufacturing out of the country was ground shaking news to me. It is a story of American engineering, know-how, and pride in the term "Made in America". The idea of the foundation moving out from under the house Americans built evoked alarm and bewilderment. I asked myself; has Trump gone too far and will he continue to deny he is the problem?
The key to bringing back American manufacturing is a carrot and stick, not pummeling industry with a tweeting stick. The first step is to correct the tax law that made the foreign profits tax lower than the national corporate rate. Raise the foreign profits tax rate to make it attractive to the bean counters to recommend returning to our nation. Next, regulate foreign investments that enable vast American wealth to be exported where it builds the foreign factories and pays foreign labor. No matter how much you believe in "Globalization", it cannot be balanced with rebuilding American industry which needs that vast wealth here.
It's a given that Trump and Republican leadership wants to offset the harm done to the treasury loss resulting from the tax cuts over the next ten years. Grand schemes are afoot within the Republican ranks to tax the world, while veiling it as tariffs and trade wars. The Republicans were shortsighted when they bought voters and paid back the wealthy with tax cuts. Now they are scrambling to pay for them.
7
Harley-Davidson may be an iconic American brand, but the company has shown little inclination or ability to reach beyond its base of relatively older riders. Any growth its seen recently has been the result of price hikes, not product innovation. Still, in 2017 domestic sales were down nearly 9 percent from the previous year. That, along with Trump’s tariffs, made the move to offshore production inevitable.
1
Last month I was in South Carolina for my mother's 98th birthday, and was able to mention to my sister--a Harley devotee who had voted for Trump, despite my warnings--that Harley-Davidson was closing a factory in the US and opening one overseas. She was disappointed in both H-D and Trump. She'll probably have second thoughts before her next vote. (I know when to stop talking, though.)
41
I suspect Trump might be dumping all over Harley-Davidson because he knows he wouldn't look good posing on one. The Hog would be in danger of collapsing under the weight of the pig.
I also suspect that Trump is gushing all over the new Foxconn plant because, just like himself, it is foreign-owned and will be rewarded handsomely via billions of dollars in tax breaks and incentives, a/k/a corporate welfare.
I even suspect that, given that Foxconn became infamous for its installation of suicide nets for its Chinese wage slaves, .Trump and his cronies might even be betting on American suicide futures.
Consider the fact that Wisconsin taxpayers will not see a dime of their forced investment in this plant for at least 25 years. Consider the fact that Foxconn promises to create 13,000 new jobs with the bait-and-switch figure of 50 grand being bandied about in the press releases. Consider the fact that suicide-by-gun in Wisconsin is far more common than in most states.
https://www.channel3000.com/news/suicide-rate-falls-in-wisconsin-number-...
Consider the fact that the vast majority of these deaths are in white rural males in the prime of their lives - men who have seen their jobs disappear, their lives and livelihoods ruined. Deaths from despair among struggling working class people are increasing all over Exceptional America at a shocking rate.
Trump is not only a cruel man, he is a very stupid man.
358
And what does Wisconsin's representative, Speaker Paul Ryan, have to say about these stats?
I suspect you suspect right.
Wisconsin Death Trip revisited and updated for the 21st century.
I would love to hear Paul Krugman's take on the Washington DC fiscal party line, as repeated in today's NPR story on the trade war.
Reporter Scott Horsley: "Experts say those [Trump] tax cuts have contributed to a surge in economic growth." (All Things Considered, "President Trump Tells Exporters To Be Patient, Shows No Signs Of Backing Down On Trade," 28 June 2018)
Not the first time I've heard this on NPR. Not the first time today, in fact. They never mention which "experts" tell them that the Trump tax scam was a spectacular success, and never mention the fact that other experts do not exactly agree, to put it mildly.
59
Last quarter, the first quarter with these tax cuts, consumer spending on goods fell 0.09%. Total growth was an anemic 2.0%.
The tax cuts didn't stimulate wage growth or consumer spending. In May, vehicle sales had their worst decline in years, that's Q2.
The economy is growing at roughly half the rate of growth in federal debt.
22
I think most economists will agree that Trump's first budget, which cuts taxes and increases spending, is stimulating the economy. I'm going to guess that Krugman would agree.
I think that most would also agree that the budget stimulus (a) is making the Fed raise interest rates faster and/or farther in order to offset part of that stimulus, (b) worsens the trade deficit as it increases imports while doing little for exports, and (c) adds to the national debt (remember when republicans were against that?)
2
The Republican tax overhaul and hoped for spike to the economy threatens to be a bust. Multinational corporations based in the United States and other advanced economies have sheltered nearly 40 percent of their profits in tax havens like Bermuda, depriving their domestic governments of tax revenues and enriching wealthy shareholders," per NY Times. I would love to see Prof. Krugman's analysis of the research cited. "Tax Havens Blunt Impact of Corporate Tax Cut, Economists Say"
https://www.nytimes.com/2018/06/10/business/corporate-tax-cut.html
www.nytimes.com/2018/04/30/business/the-tax-cut-buybacks-business-invest...
4
As damage control today, Peter Navarro said Trump is actually a free trader. So why didn't he say that from the start and call out the unfair subsidies - as in Canada dairy? Instead he jumps right to tariffs which are already introducing uncertainty into the economy - even if he later backs off. And rather than complain of Europe's VAT, why not add our own - equalizing trade and addressing the deficit simultaneously.
16
(Wonkish) Actually, Canada doesn't subsidize dairy much; instead they limit production (quotas) and imports to keep prices high. That contrasts with the US and European approach, where they prefer to subsidize production, which produces far more dairy products than their consumers want or need, causing them to search for export markets on which to dump the surplus.
If you want the Trump administration to call out unfair subsidies, esp. in agriculture, there will be no shortage of things to point out, but the instant response from America's allies will be to ask Trump to cut subsidies to Midwest farmers. (That's why Mexico and Canada and China, etc. are targeting things like soybeans and corn in response to Trump's steel tariffs.)
So Dave, do you want to see free trade in agriculture even if that means pain in farming communities and states throughout America?
8
VAT is a sales tax. It is not charged on exported goods. If you buy goods in Europe and bring them home to America, they will refund your VAT. Unfortunately the Trump administration has never understood that.
1
If HD backs down from what is a good business decision, the Hog is doomed. It is already sliding in popularity in America and has never been popular worldwide because the competition makes better and cheaper machines. All of the Hog owners should hang on to their bikes because they will be collectors items for their fanciers.
26
Perhaps they will have a section added for Hogs at the Pennsylvania Railroad Museum.
A few months ago, Harley Davidson announced that they would close the Kansas City Plant in the fall of 2019 due to reduced domestic demand. That's 800 jobs. This was already in the cards, even with the big corporate tax giveaway. Businesses operate on demand, not supply and there is an oversupply for that product here in the states. The tax cuts were used to benefit the shareholders and beef up the company's bottom line.
When Trump added in the pressure of tariffs on steel, that pushed Harley to move aggressively. They can't make bikes here and sell them in Europe at a competitive price with the hike in steel. So they will supply the European market with bikes made in Thailand. This gives them access to not only cheaper labor, but cheaper steel.
Harley had no choice. Trump pushed them over the edge. We have a nail plant in Missouri that is just about to close because they can't get low cost steel anymore. That's another 600 jobs. There were competing with foreign made nails and succeeding, but they can't with high cost steel.
We are just beginning to see the fallout from the steel tariffs. Wait and see what happens when Trump puts a 25% tariff on everything coming out of China. He is also making trouble for Canada and Mexico which also supply US industry with low cost materials.
475
Mr. Rozenblit, Good morning and my usual compliments on your comments. I'm wondering if you, the others who appear to comment regularly, Messrs. Krugman, Douthat, Friedman, Bruni, et al would step back from the trees and see a larger forest. To be sure, returning to a gilded age or robber baron setting seems all too clear but may I ask what you and the others mentioned would make of an alliance between Russia, China and Trump partitioning the world. Too fanciful, perhaps?
Mid Continent Nail company laid off 60 workers. Not 600. They only employ a total of 500 people. The company says it has applied for tariff exclusions for the wire used to manufacture nails.
As for Harley, I do not pay much attention to motorcycles as I consider them suicide machines. However, there is more to their decision than your highly respectable post indicates.
You state, " They can't make bikes here and sell them in Europe at a competitive price with the hike in steel."
Should that sentence be finished by adding...at the high profit margins executives demand and stockholders expect.
There are two (or more) sides to every story.
1
Copernicus,
The nail manufacturer has indeed only laid off 60 people so far. They have also stated that if conditions do not improve with the tariff situation, they will close their doors this fall. My statement was:
We have a nail plant in Missouri that is just about to close because they can't get low cost steel anymore.
I sais just about to close.
Furthermore, the Trump administration has stated that higher domestic prices do not quality for an exclusion and over 20,000 companies have already applied. Only a handful have been granted. I'll eat the error in total jobs that could be lost. My mistake but that does not take away the significance of the losses.
Events of this week (and the past 17 months) make me wonder if part of the anti-trump strategy ought to include a reduced spending initiative by those opposed to the direction OUR country is going under his "leadership". Since they continue to tout how well the economy is doing, can we not cool it off by limiting some discretionary spending? Enough to keep things going but not to help entrench trump and his minions with their 3 or 5 percent growth predictions. Maybe this will influence his supporters who think the man is their best bet to their future. They don't listen to the truth, maybe they will believe it when they see it in action....?
20
Department of Commerce just revised their estimate of 1st QTR 2018 real GDP down from 2.2 to 2.0. It appears as if the effects of the tax cuts are pretty much as the Professor predicted. Corporations get to buy back outstanding shares, CEO's get bigger paydays, and maybe shareholders will get some dividends. The economic trajectory remains basically unchanged in the short term; in the long term there will be all that added debt to deal with.
137
Q1 growth in consumer spending was the lowest in four years, third lowest in the post recession period. Spending on goods declined slightly, personal savings rate is a dangerously low 2.8%. People don't have the money to spend.
18
Now there's an idea worth giving more thought to. Assuming building bridges is off the table. Get out the vote, and boycott red business. Hmm...
2
What happened to that grand infrastructure rebuilding plan is what I want to know. That was the one promise that I was looking forward to seeing some substance and urgent action on. Not a random, loud set of tariff threats.
217
All hat and no cattle...just like the North Korea 'deal'....just like Trumpcare....just like Trump University...just like the Birther Lie.....a 100% Made In America Donald Trump Lie....and his Deplorables adore the Big Lie.
The only infrastructure this Sociopath-In-Chief is building is a highway to hell.
581
AP917:
Historically, interstate highways are 90% federally funded and the rest state funded.
Trump's infrastructure plan was going to be 10% public money and 90% private money.
The problem that such an investment ratio creates is that the private money needs to make a profit, and there are few "infrastructure projects" that can earn a reasonable profit especially in the short term. Just building the infrastructure can take years before any cash flow, let alone a profitable return, is possible. For example, the "BIG DIG" in Massachusetts took over a decade to build. Private money is not "patient", while public money can be.
For example, the Indiana toll road (a 157 mile long road) was recently sold. Even though the buyer was going to invest money for improvements, the road is in existence and is operating, so tolls can be collected immediately. If you have to build the road, you collect nothing until it goes into operation.
http://www.chicagotribune.com/business/ct-indiana-toll-road-lease-201505...
Trump does not understand simple finance, or he would never propose such an infrastructure plan. Nobody is going to invest private money if there is a long wait before you collect any revenue.
32
Have you seen the current deficit projections. There will be no money for infrastructure. - unless we can get Mexico to pay for it.
7
Doesn't this sum it up:
...it’s perfectly natural for the company to move some of its production overseas, to locations where steel is still cheap and sales to Europe won’t face tariffs.
If business savant Trump were CEO of Harley and was interested in containing costs and staying in business, what would be do? Maybe a look at his past business practices would reveal his decision. Now, as then, it is what is best for him personally. Not the country. Surely he can understand that.
84
I suspect Trump is well onboard with off-shoring...profits, records, etc. Possibly reasons why Panama personnel shredded records and his security detail resorted to thuggery when the new owner of the Trump-branded hotel sought to take over.
https://abcnews.go.com/International/police-enter-lobby-trump-hotel-pana...
9
Actually, the Trumpster likes bankruptcy when things don't go his way. He comes out with a nice profit while those who work for him end up with nothing.
6
If Trump had ever been the CEO of Harley-Davidson, the company would have been shut down long ago and their bikes would now be collectors' items.
1
his is yet another example of what Trump does best - make wild statements that sow the seeds of chaos and then blame anyone. In other words, first sow chaos and then scapegoat someone.
The sad part is that his base roars in approval of this strategy. Just see the folks at his never ending rallies. They hang on to every one of his utterances and applaud as loudly as they can.
So, this is not so much Trump versus the hog maker; it is much more Trump's base versus sanity. Trump's base versus America, Trump's base versus science and logic.
And that is the truly worrisome part of this narrative. It is all the more important for progressives to join hands and vote in record numbers. Obama spoke of the shellacking the Dems got in 2010; let us make the shellacking of 2018 even more impressive.
252
"And Donald Trump made more headlines when he lashed out at a company 'I’ve been very good to,'...
How telling that Donald says "I've" been very good to Harley-Davidson. Not "my policies" have been good to them. It's always personal with him...
Successful businessmen and women, successful investors, successful scientists, and successful members of numerous other fields base their decisions on evidence and rational fact. It takes a lot of discipline to discount one's personal feelings, but the LAST thing one should act on is emotion.
Trump has a decades-long history of business failures, in part because of his inability or unwillingness NOT to personalize. And for those who don't yet see it for what it is, that's also one reason why he is and will continue to be a failure as president.
387
But he's also a very successful con-man and that depends on, "Believe what I say, not what I do."
3
Tariffs are taxes that raise prices for businesses and consumers, and can cut demand. Tariffs are government setting the market price, picking winners and losers. National security is a dubious excuse.
225
"National Security" is his favorite excuse--nobody seems to argue with it. And nobody seems to notice that the major threat to our national security is Donald Trump.
67
I wouldn't use the word dubious. You are much too kind. How about fallacious?
2
Yes, Mr. Rhett. Furthermore, this is another example ofcontradictions and lack of integrity. On the one hand our current executive branch cites a policy of "de-regulation" to deconstruct protections for our collective health. On the other hand, they have no scruples about imposing tariffs and executive orders that harm specific groups of human beings, in the name of protecting our country. Who are they protecting, exactly?
1
"Hogs". How incredibly, superbly appropriate, in many ways. So much winning, that the winning meter will soon be broken. Wow, if only there had been some warning, some clues, some actual, verifiable facts that HE was a rolling disaster, a contagion waiting to explode. NOVEMBER.
198
With all the winning, there has to be some way to get in on that. Why haven't I heard of a hedge fund that invests in everything Trump?
2
But he is only following Mr. Putin's orders: Destroy NATO and create trade issues that will hurt western economies. And Drumpf replies "Sir, yes sir!"
3
Some warning? For anybody paying attention and possessing half a brain, tRump was nothing but a huge red flag with sirens blaring.
3
2 of 2
What is that struggle? It is the power struggle for control of the nation, the now 9% versus the 91%.
While Trump may not be the preferred poster boy of the Koch Brothers - they would have preferred Scott Walker as a figurehead president - his goals are not that divergent from theirs.
What do oligarchs want?
They want out of paying their dues to this nation. Changes in fiscal policy over time, from the 80's through the 2010's did a lot to free corporations from doing what companies in other countries do: pay a lot of taxes, reinvest profits in-country and keep their money in country. Bush came along and gave them deep tax cuts. The Democrats made those permanent.
That wasn't enough, though. They want more. They want to get back to the fantastic profits of before the Civil War. They want no taxes, supercheap labor, no regulations, no social contract, no education, no nothing. That is why the people who are in Trump's cabinet are who they are. They're there to do all these things.
Harley Davidson, Intel and many of this nation's corporations all are set up to move production elsewhere. GM and Ford can build cars in Mexico and China. The trade war will affect them some, but nowhere near as much as it would have had jobs and companies not offshored these last few decades.
This is what Reagan and triangulation have resulted in. Should we still cut deals with the GOP?
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Neoliberalism and Triangulation, it's not what you think...
https://wp.me/p2KJ3H-2Jr
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Sorry, kid, I didn't mean to get in-between two parts of one cud-chewing rumination. But you better than most know how to do this correctly, since I believe you were the first here to deal with the need to exceed 1500 characters (including spaces) by recourse to a reply to yourself.
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Richard,
No apologies needed! I've slowed down quite a bit since I injured my wrist a year ago. Happy to have your comment sandwiched in between, for, um, contrast...
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Dear Richard and Rima--thanks. you just made my whole day.
Harley’s board needs to consider replacing its CEO, Matthew S. Levatich, with someone possessing a political clue. You’d think, with all the attention Trump has given the company as president that movement of some Harley Davidson operations to Europe to avoid tariffs which may or may not even survive the next year – or even the next few months – that there might be a ripple or two from the Oval Office. Not that Trump probably can legally do a lot to punish a single company whose cluelessness has displeased him, but it’s never a GOOD idea to have a president, ANY president, ticked off at you.
Levatich should have sat down with Trump and given him plenty of warning that he was considering this action BEFORE taking it, so that the action might have been moderated in a way that didn’t harm Harley or embarrassed Trump, or the response to it might be thought-through instead of turning out to be the knee-jerk reaction it turned out to be. Impelling a knee-jerk defensive reaction is ANOTHER reason for doubting the maturity of Harley’s management.
They had better be taxed as the law requires they be taxed, and not more or less; or Trump is in more trouble than some suggest the Russkies have caused him. However, his advisors – it will never need to get as far as the courts – will put a leash on him.
But the “hog-maker” was a Texas Ton more clueless in this than any $5.6 billion corporation has a right to be.
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Vehicle sales are falling in the US, consumer spending declined for durable goods. Can a new CEO make people spend money they don't have?
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Actually a lot of people tried to warn Trump things like this might well happen, but he didn't want to hear it, and thus didn't. Why? because this is a guy who would sell his mom, apple pie, Nascar, bowling and baseball if it profited him. As I've said elsewhere, in the grand scheme, Harley is less than a rounding error. Their mistake was announcing this move. Everyone else is quietly making the same arrangements, just not talking about it.
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I thought that close alliances between industries and government was indicative of fascism, and the US is a capitalist democracy.
Oh.
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As lobbyists took on increasing importance in our politics, over time, rules, regulations, laws, rulings came into existence that prepared the ground for a president and party like Trump and the current iteration of our political parties. That's not to say that our political parties are equally as beholden to moneyed interests or that they are equally willing to go as far. Clearly, they are not. But there is a modicum of areas between the two on how much to defer to industry lobbyists and those whom they serve. I highly recommend subscribing to Politico's Influence newsletter. Months - years- of reading about the comings and goings of lobbyists, congressional aides and industry executives gives one a fairly good idea of the extent of the rot. Reading a history of the Koch's ALEC and what it has achieved nationally, locally, and in the states, completes the picture.
We are an oligarchy now. How did we get here? The simple answer involves looking at our trajectory as a capitalist nation since the Civil War. How have we coped with going from an economy that relies on slavery for labor, to an economy that doesn't, while still maintaining a fabulous level of profit for our industrialists, bankers, etc.?
We've gone through cycles back and forth, with power going to this or that group until the lead-up to the Great Depression, and again, to the lead-up to the Great Recession. Each event came with a struggle that we can see today.
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www.rimaregas.com
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I am glad to see that more people acknowledge our democracy has become a plutocracy.
Get rid of big money so that we can get our democracy back.
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Rima--the Emancipation Proclamation eradicated slavery. Despite your attempts to rewrite history Lincoln's signature on that document finally put an end to that evil practice. After the Civil War the 13th, 14th and 15th amendments to the Constitution buried slavery and gave newly freed male slaves the right to vote.
Even if he runs again in 2020 Bernie Sanders isn't going to give you free stuff forever. The Sanders novelty has worn off.
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Sharon,
Please quote back the line or lines from my comment that either allude to or directly mention any particular person, much less Senator Sanders.
You reply is off-topic.
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It is unfortunate that, with a lot of Trump's (and Republicans') policies, if you can call them that, his adoring masses can't see the reality. Build a wall, and make Mexico pay for it? Bring back coal? Cancel all of our long-term trade deals and make all of our partners give us a 'better deal?' Tax cuts to magically fill all of our wallets with lots of cash? Give corporations tax cuts and watch them pour all of the money into new business activity and higher wages for workers? Loosen regulations (especially environmental and financial management) and watch the economy 'take off?' Dr. Krugman is correct about this administration having no real experts on anything; so much for 'only the best people.' Trump himself has never been very good at doing anything beyond putting his own name on things, and even lots of those failed. What evidence did we have that he was a 'successful businessman?' Very little, especially since he won't show us his tax returns. It is time for all of us, and especially his followers, to face reality. Unfortunately, it is not pretty.
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This administration has expertise on how win the requisite electoral votes to be in power. That really is all they need and what their opponents seem to lack. Might we add that the GOPs also control a sizeable majority of our state legislature and both houses of Congress. Oh yes, they have their area of expertise and understand it very well.
Wish it were not so, but the facts speak for themselves.
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"You can fool all of the people some of the time, and some of the people all of the time, but you can't fool all of the people all of the time." - A. Lincoln
We're about to see if this wise saying remains true today. My guess is does and will do.
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There are two facets to Fascism. One is political, the other economic. The means of production are privately owned, but government controlled. You can see the history of this from the German control of Messerschmidt, Volkswagen, Krupp, and the factories that supported the Third Reich during WWII.
Now we see Donald the 1st, telling private industry what they have to do to keep his favor. Every time I see him on the TV and his expressions, I can not help but thinking he looks like and sounds like Il Duce. Of course he has to give his choir some bones to chew on. A company is loyal to its stockholders, the mad man in the office is a distraction. They may get a few more customers for being nice to the psychopath in chief, but will get more with a good price to value ratio. HD builds a quality product, they also contribute money to the GOP. They need to tell their senator and congressman, to make him quit these attacks on private enterprise, or the money will dry up, Harley needs to get some fortitude, tell him to stuff it.
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The American (let alone world) buying public have already shown time and time again that there are no real loyalties (even to iconic companies) when choosing the lowest price.
It has shown in the ballot box (when people voted for their meager tax cut, no matter what the cost) or on main street. (when people will bypass their local jobs and businesses in supporting those businesses that are foreign stocked or online)
The trade wars will show up in the pocket book eventually, but probably by then the icons that people have come to know will have a manufactured sticker of different origin.
That is if they can find those products at all.
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The Harley story make it easy to understand the perverse economic incentives of the Trump trade war. Harley is also a symbol of what such a trade war means for American workers and American jobs. Harley was targeted as the being in the district of Paul Ryan who has been complicit in kowtowing to Trump despite his supposed support for free trade. As a progressive Democrat, it seems like justice that Republicans and their constituents are being punished. The Trump base is about to learn a hard lesson that following the leader often leads you over a cliff. The bigger concern is that Trump's pugnacious, counter-punching instincts will only escalate the trade war and result in an economic collapse on the order of the Great Recession of 2008. We already have had the massive tax cut and the financial deregulation in the rollback of the Dodd-Frank law. The missing ingredient is an economic surprise. The looming international trade war is just that.
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Call me cruel, but I’m rooting for the Trump recession. Bring it on, the more painful the better. I know that recessions harm millions of innocent people, but America needs to learn the lesson that Republican ignorance, greed and meanness must be rejected on all fronts. As wretched a character as Trump is, by himself he’s not enough to convince a safe majority that Republicanism is done, once and for all, and he and the GOP are benefiting from a strong economy they did little to create. The US needs a dose of economic suffering to see that choosing to be led by venal fools is a bad idea. Call it chemotherapy to cure the cancer that is Republicanism.
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Sadly, if the recession comes, most Trump followers will believe Sean Hannity and Fox News when they say that it's all the Democrats' fault. No question.
Paul, sadly — tragically — Trump's supporters will never "learn a lesson" from Trump's failures, even if those failures affect them worst of all. Trump will always use Obama and the Democrats to excuse his behavior. "They made me do it."
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Trump said he wanted to make America great again. No one asked him how and for who. If actions speak louder than words the steps he's taken give us a clue. He's making America a great place for those in his economic area of the woods. Those tax cuts he wanted and that the GOP gave him do nothing to improve the lives of 99% of us. The tariffs he's put on steel will not save American jobs. The tax cuts didn't either.
We are not seeing any move by any major company in America to invest in or hire more Americans. In fact, if anything the historically low unemployment rate we're seeing is nothing more than a mirage hiding how many people are unemployed for no reason other than the unwillingness of corporations to hire experienced Americans or Americans period.
Trump, in claiming to be for America first, is hurting America first. He can rant all he wants about Harley-Davidson being unpatriotic or ungrateful but they are doing what any other smart company is going to do to make money under the circumstances. For a self proclaimed successful businessman Trump appears to have missed several classes concerning the welfare of employees, how to work with vendors and others to deliver a worthy product, and how to keep people interested in working with him.
Intimidation goes only so far. I doubt that the Chinese are impressed with his bluster. They play the long game. Trump is playing the quick and dirty game. We are the losers.
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Loud, rude, flashy, and unprepared are not seen as desirable or "winning" characteristics in China.
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Perfectly stated, Henry. "Intimidation goes only so far. I doubt that the Chinese are impressed with his bluster. They play the long game." True.
And let us assume Chairman Xi is coaching Kim Jong Un on the art of jerking Trump's leash. Trump's idea of The Art of the Deal is all about lying to reach the finish line of any deal. His next ghost-written book will likely be, "The Art of the Lie." And all of the autocrats and tin-horn dictators of the world know how easy Trump is pumped. Just fawn over him and demand everything in exchange for giving Trump nothing in return.
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Since his Unhinged Unraveling Unfitness hasn't ever had to be responsible to stockholders, stakeholders, or even bankers:
https://www.nytimes.com/1990/06/26/business/quick-who-d-have-trouble-liv...
the only thing he's ever had to satisfy is the Black Hole of his massively yuuuugely enormously gigantic Epic Ego.
And the Complicit GOP'er Fifis and Foo Foos (djt's poodles, per George Will) enabled what is happening and will happen, which will only be getting worse.
After all, there's a reason the Clinton adviser James Carville famously said:
" I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody. ”
Considering the Pumpkin Bambino's propensities, how long until he starts brow-beating the Fed:
https://www.nytimes.com/2018/06/25/business/what-is-yield-curve-recessio...
blaming a Fed conspiracy ? Oh, wait, GOP'ers already have that Faux News Banana Republistan play book, don't they ?
Never mind.
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The yield curve would steepen nicely if China decided to dump its US bonds. I don't expect them to do so---since it would probably involve some losses on their part---but if they want to play hardball, they could drive long-term rates up pretty fast pretty far.
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Oh please. The Fed doesn't need any help in making sure Wall Street thrives. (Oh maybe we have to raise the interest rates .25% six months from now.) Too big to fail.
The investor class --- only fools work for $$.
Monopolies galore. aka conglomerates.
We need a crash to get back to normal.
We need a protectionist attitude towards land use. (Fewer super highways.)
We need AI , computer driven transportation systems -- esp. subways , trains, google cars (ride share), etc.
We don't need HOGs in most situations. A noisy, luxury product and somewhat dangerous. (Yeah, I used to ride around on the back of one sans helmet - those were the days.)
Trump has positioned American companies to choose between selling products to 350 million American citizens or 7 billion world citizens. Which would you choose? When I imagine Xi Jinping I imagine him in the catbird seat. I imagine him surrounded by experts, economists and the educated elite. Trump has FOX and Friends. He has alienated not just the governments of our trading partners but the citizenry of those countries as well. He might claim to know the art of the deal but he has shown, repeatedly, that he is no kind of salesman. The customers are always right Donald, not Steve Doocey.
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@Rick
I am not sure if it is a matter of what advice the President is getting, but rather what pressure(s) are being put upon him. That is of course excluding what backroom pay for play deals he is making with private individuals and states alike.
It might take a while before all the entanglements are revealed, or we may never know.
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The world hates Trump. If foreign leaders ever consider giving in to Trump, they'd lose their elections.
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Alienated the citizenry of other countries?!! He's mostly alienating the citizenry of this country, the not-so-United States. A country is known to be strong when everyone is rowing together. Trump has done everything he can to make enemies of 50% of the _US_, and that will eventually show up in the numbers as well.
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Wal-Mart has now repatriated ten billion dollars as share buy backs. Not one extra job. Trump falsely reports that US Steel has told him they are opening six new foundries, US Steel is too frightened to deny any conversation, but is only reopening two existing foundries, adding a few hundred jobs. Small businesses are going out of business. The EU has an economy as large as the U.S. economy and has instituted billions in new tariffs against US products. Canadians are boycotting US products, the inventory of cheese in the U.S. is the largest ever and Canadian lumber tariffs are driving house buildings costs up dramatically. And China is threatening huge tariffs. Trump is right to be frightened, he's created another mess which may be impossible to fix. Tired of all this winning?
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When a tariff is placed on Canadian lumber, it provides an umbrella of higher Canadian product prices that American producers can raise there prices up to. American lumber producers follow right behind, raising their prices. And not just lumber producers. Look at the recent washing machine tariffs. US manufacturers prices went up, when there was no tariff driving it... their competition was forced to raise prices, but American washer manufacturers did so entirely on their own. Trump's Tariffs are "the government picking winners and losers" - in the Harley Davidson instance, overseas jobs in manufacturing is the winner, and the American workers are the loser. In the case of Canadian lumber, American consumers are the losers. I suppose eventually Trump will be replaced, trade sanity will return, and those Canadian trees not cut now will be even bigger. And American housing prices will stay high, because they can.
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It is not Canadian lumbe4 tariffs that are increasing American home prices. We do not have tariffs on USA lumber. It is the other way around.
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Correction-US imposed tariffs on Canadian softwood lumber more than a year ago. That is what is driving up the cost of new homes and other buildings in America. When all of the retributive tariffs are in place from EU, Canada, Mexico, China, America will see many changes in their cost of living-none of them good for the economy.
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As Michael Corleone would say:
"It's strictly business"
Surely Mr. Trump should understand that!
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Most of Trump's supporters believe that he is a courageous patriot who has bravely taken on problems meekly avoided by his predecessors. When the effects of retaliatory tariffs hit home, they will be shocked to see how cowardly, fickle, and clueless their hero really is.
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Perhaps, but if they've not laid eyes upon the mountain of evidence accrued thus far, I have doubts that any factual imposition on their lives, no matter how great, will change things.
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They also, apparently, think he was a business genius, and that The Apprentice was a documentary, not a scripted reality show.
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Read the articles on how Chump supporters are not affected by facts. They have an identity to protect and it includes supporting Chump. There were Harley workers saying they blamed Europe, not Chump, for their lost jobs. People are creative in their self-destruction.