For most people, everyday economics is pretty straightforward: the aim is to regularly acquire enough money and resources to provide food, clothing and shelter for oneself and one’s immediate family. Too much going out coupled with not enough coming in equals a direct deficit that must be addressed or disaster follows.
Beyond that, adding the theories of price, demand and supply, along with maybe opportunity costs, the PPC model, the circular flow market, consumer sovereignty and the like does nothing but confuse the average citizen.
Number 45 is not supposed to be an average American. He is the current commander-in-chief. He is not supposed to be confused by some of the more technical aspects of operating economies, as a “successful” businessman. But, at least according to the head of Harley Davidson Motorcycles, a long-term American industry, number 45 apparently did not stay in college economics classes long enough to “get it,” yet still keeps interfering and disrupting the American economy—-the same progressing economy he was gifted by former POTUS Obama.
The Harley CEO proclaimed that “Our decision to move some of our operations (from the U.S.) is 100 percent based on President Trumps tariffs. Mr. Trump knows nothing about economics and even less about trade.” There was another part of this quote that has since been debunked as fake.
The point here is that number 45 is seriously engaged in tariff/trade wars with several countries, particularly with China, saying that ‘trade wars are easy to win.’ Historically, that is blatantly false, and number 45 is speeding the American economy straight for the gully over the ridge and off the tracks. Number 45 will lose his trade war against China, especially, and it will cause serious damage to the bread-and-butter issues of most Americans.
Why will he almost assuredly lose this particular economic contact sport event? To begin with, the modern world—particularly the solar panel, smart phone, laser, wind turbine, mountain bicycle, electric car, computer and digital version of the current and future world—-depends on rare earth materials. What are those?
There are very strange sounding ones like yttrium and scandium, and more commonly recognized ones like nickel, cobalt and lithium, along with more than 25 others. China, for at least the last decade, has controlled 90 percent of the world’s supply of rare earth minerals, and thus owns the key to a major U.S. energy vulnerability. “In fact, of the 90 mineral commodities that the U.S. Geological Survey tracks, the U.S. is more than 50 percent import reliant for 50 of the rare earth materials and 100% import reliant for 20 of them,” including almost every important rare earth element needed by American manufacturing, and China controls them all, including the production of lithium-ion batteries.
If, and when, China simply stops exporting rare earth materials to the U.S., it’s over. Number 45 will have lost the ‘easy-to-win-trade-war’, the stock market will continue its downward spiral, and we, the real Americans, will all suffer.
Mark your calendars and mark my word. We are due for an economic shellacking because of the perfidies of the king of bankruptcies.
Happy New Year !!
Professor David L. Horne is founder and executive director of PAPPEI, the Pan African Public Policy and Ethical Institute, which is a new 501(c)(3) pending community-based organization or non-governmental organization (NGO). It is the stepparent organization for the California Black Think Tank which still operates and which meets every fourth Friday.
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