What Trump taketh away from farmers in trade he’s trying to give back to them in subsidies. From Bill Bonner at bonnerandpartners.com:
What a spectacular summer!
People may be frying eggs on the sidewalks of Algiers and fighting forest fires in Sweden, but here in Ireland, the heatwave is a delight.
Farmers are grousing, of course, but we are enjoying daytime temperatures in the mid-70s and beautiful, clear skies.
Farmers are grumbling in the U.S., too. The weather is always a favorite subject. And this year, they have something more to kvetch about – the trade war.
Casualties are beginning to pile up. This from Bloomberg:
Harley-Davidson Inc. on Tuesday cut its profit margin forecast, citing tariffs. The iconic motorcycle maker was caught in the crossfire of the trade war last month when it announced plans to shift some U.S. production overseas, prompting attacks from Trump.
Dutch electronics firm Royal Philips NV Chief Executive Frans van Houten says an escalation of tariffs may mean it has to pass on costs to customers, and Whirlpool Corp. said rising raw material costs hurt results in some of its markets in the second quarter.
Out on the Great Plains, the bodies lie especially thick. The damage estimate so far: $11 billion.
But U.S. farmers are not locking arms like Londoners during the Blitz, or going on short rations like Soviets during the Siege of Leningrad. If anyone is going to make wartime sacrifices… it’s not going to be them.
They’ve got two senators per state… and a Republican Party that needs their money and their votes.
As expected, America’s president proposed yesterday to bail out the farm sector with $12 billion in welfare payments.
Naturally, the president feels some responsibility in the matter, since it was he who put the hayseeds under water.
He also looks ahead to the midterm election season, when the fellows with the big tractors make a big impression on the politicians.
The Donald has replaced win-win with win-lose. But the $12 billion won’t come out of Donald Trump’s pocket.
Nor will it come from the U.S. Treasury. The feds don’t have any money; they’re already projected to run a trillion dollars in the hole for fiscal year 2019.
So where will the money come from?
Will taxes be raised on consumers, also hurt by the trade war? Will the steel producers… or steel workers… or steel buyers – similarly damaged – pony up the money? Which group will get the rewards? Which will be punished?
To continue reading: Trump’s Farm Bailout Is Win-Lose