And do you have pension portfolios around the world?
I watched an interview with Michael Schellenberger with Batya Unger Sargon. (It’s in the alternative to Shellenberger’s gates.) Trump’s tariffs and Ungar-Sargon argue that Trump is fighting class war on behalf of the working class. Her evidence puts her there halfway through. Trump’s tariff announcement certainly destroyed many wealth owned by the rich.
But they expand the working class in two ways: (1) as a consumer, (2) as a stock owner.
Take the second point first. The tariffs announced by Trump have destroyed the wealth of virtually anyone with a broad portfolio of stocks. It’s not just the rich. Many American workers own shares in their 401(k) and 403(b) retirement plans. So Trump’s announcement also hurt them.
I don’t know of workers who don’t buy goods. Most worlds spent most of their post-tax enemies on goods. It points to me (2). If tariff rates are implemented at something close to the level where Trump is threaded, almost all imports will rise, and many domestically produced prices will rise.
Why do so many economists concentrate on the stock market? The stock price of scholars adjusts new information and they do it quickly. The price of a stock reflects investors’ expectations of the flow of income from owning that stock. So stock prices are a good early indicator of wealth destruction. Consumer goods prices move more slowly. But they move.
We’ve seen people say that stock prices are based on short-term earnings. It’s not true. Imagine that Eli Lily announced today that it had cultivated all of its research and development and money into revenue. Earnings are high and I am sure Eli Lily’s shares are in the fall.
Another note:
For about 15 years, I gave a lecture to a local Rotary Club group. In it, I made my point for free trade. If you don’t know Rotary, let me explain that the median age of the members was closer to my age at the time. Also, my hair was already grey. In the Q&A, Subsone said that they could see free trade benefiting, but that benefited people of the room type. I had already explained how it benefits consumers, but I thought I would give a try with a new tack. “I look like a lot of people in the room have the same hair color as me. Do you have any retirement assets? And are there most of the retirement assets in stocks? The audience laughed, the guys laughed. The connections between the companies and them.
