Smoot Point

Nobody wins a trade war. -- Pug Mahoney

   The president claims a degree in economics from the University of Pennsylvania. He also brags that he didn't attend classes or read a book. So how is it that he graduated?
   His current rantings about winning a trade war ignore basic principles of Economics 101 and show he never read the paragraph about the Smoot-Hawley Tariff Act of 1933, which not only incited a trade war, but also worsened an already disastrous Great Depression and contributed to the causes of World War II.
   He claims credit for the national economic recovery now under way, which actually started eight years ago, long before he even considered running for president. It's true that more people have jobs and the unemployment rate is low, but wages are barely rising.
   The Labor Department reported that the economy added 313,000 jobs last month, and the unemployment rate held steady at 4.1 percent. But wages barely rose at all, a measly 0.1 percent, the government said.
   So if the demand for labor is rising and the supply of workers is not, why aren't wages rising to attract more people to the work force? Has the Law of Supply and Demand been repealed?
   Not really. When demand for workers rises, more people enter the field and take up what jobs are available. And when there's shortage of labor where the jobs are, people move in from elsewhere. In turn, that "elsewhere" can be a different county, a different state, or another country.
   America has long been called the Land of Opportunity. For many, this is where the jobs are.
   The current president, however, wants to build walls to keep out people looking for jobs, claiming that those jobs should go to those workers already here. But there are not enough workers already here, and companies are not boosting wages to make up for the shortage.
   Economics 101: When demand rises and supply falls, the result is higher cost. In this case, wages. Unless employers take advantage of the competition for jobs to keep wages down, on the attitude that if a worker doesn't like it, he or she can go elsewhere, and the boss will hire someone else who is willing to take lower pay.
   Meanwhile, the president talks up what he insists is a "trade war" and that "winning is easy."
   Perhaps, if you put the screws to firms in other countries that want to export products to the U.S. The problem, however, is retaliation. If the U.S. builds a tariff wall to keep out foreign products, then other nations will build a bigger wall to keep out American products.
   Result: Higher prices to consumers on both sides of the walls, people stop buying stuff, production falls, and an economic recession happens in both countries.
   It happened in the mid-1930s, and is quite likely to happen again. Back then, what started as a trade war soon became a real war.
   Perhaps the president, instead of attending class, listened to Vince Lombardi, who said, "Winning isn't everything. It's the only thing."
   Tell that to your hungry children when they ask what's for dinner.