Tuesday, August 23, 2016

Trump, Clinton And The Forgotten Consumer

Economy: You can't get through an economic report without hearing how consumers account for 70% of the economy. But you'd be lucky if you ever hear either Donald Trump or Hillary Clinton mention consumers in their speeches. That's probably because so many of their policies are anti-consumer.
Both are pushing policies meant to appeal to various constituents, but that would sharply raise prices, eliminate choices and hamper innovation.
Take Trump's anti-trade rhetoric as an example. Among other things, Trump says he'll slap a huge tax on products made by companies that export jobs. "When a company moves and wants to move, as an example, to Mexico, we're going to wish them luck. But when they want to sell their product in this country, we're going to say, 'Sorry, but you have a 35% tax to pay to get your product back in.' "
In some cases, he said, he might even encourage companies to leave. "We're going to make a fortune, OK?" Trump said.
Who is "we"? In this case, it's the government, which will be collecting those new taxes. And who will pay those taxes? Consumers will, in the form of higher prices. Not just for the products Trump wants to slap taxes on. If Trump raises the price of exports, domestic companies will be free to raise their prices, too. Whether or not any jobs are saved, consumers will get hurt.
Read the rest of this IBD editorial HERE.

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