Friday, April 6, 2018

Literary Corner: A lot of people don't understand what that means

Cy Twombly, Second Voyage to Italy (Second Version), 1962, San Francisco Museum of Modern Art.
by Donald J. Trump
We can’t continue to have —
I spoke with Jim just coming in
and — Jim is a great businessman — and he said,
“You’re right.” Because we can’t continue
to allow this to happen, where hundreds
of billions of dollars is taken out
of our country and our system; where
if they make a car, they sell it here,
it’s 2.5 percent tax. If we make a car
and try and get it into China, number one,
they won’t take it. But if they did,
it’s 25 percent tax. So they pay 2.5;
we pay 25. They don’t even want to
take it. That doesn’t sound so good.
But it’s all like that. And we have
our intellectual property, and a lot
of people don’t understand what that means.
And it doesn’t matter if you understand
it or not. You understand the concept of
being taken advantage of, and we
can’t be taken advantage of any longer.
So we’re at a point where we had to
do this. Our economy is strong. Our jobs
are great. We’re going to come out with
numbers on Friday that, hopefully,
are going to be fantastic numbers.
Companies are doing really well, and
you have to go after the people
that aren’t treating you right.
Text from the president's Tax Reform Roundtable in White Sulphur Springs, West Virginia yesterday.

Jim is Governor Jim Justice, the richest man in West Virginia with an estimated net worth of $1.6 billion, who joined the Democratic Party to run for governor in the 2016 election and then switched back to the Republicans at a Trump rally in August 2017, startling members of his staff, who had not been informed of the plan. He promised to put his assets into a blind trust when he took office, but as of last October, the most recent report I can find, he had done this with just two of the hundred-odd companies he owns, even as a bill raising the tax credit for rehabilitation on historical structures from 10% to 25%, which would apply to his Greenbrier resort, was working its way through the legislature. He's a notorious tax delinquent, owing some $15 million in taxes and fines in six different states for his mining interests alone according to a 2016 NPR report, for coal companies with twice the national rate of on-the-job injuries and four times the national rate of safety violations. I don't find a more up-to-date figure for the total delinquencies, but the Charleston Gazette-Mail was noting in February that the bills are going nowhere but up in West Virginia and Kentucky, states where the abysmal tax collection leaves the education system so starved for funds that teachers have recently been forced to go on strike.

So you can see why Trump would feel a certain affinity with the guy.

It's true that China charges an approximate 25% import tax on US motor vehicles and the US only charges China 2.5%, or would if the US imported any cars from China, which it basically doesn't (32,000 Buick Envisions from Shanghai showed up last year, though, so things could be changing):

Chinese automakers have tried to enter the U.S. market before and failed, crippled by sub-par quality, failure to meet tough U.S. safety standards, lack of consumer awareness and ill-conceived import partnerships.
"Plans were hopelessly optimistic," said Bill Hampton, editor of AutoBeat Daily.

They'll be trying again sometime next year, with a seven-passenger SUV from GAC Motor for around $40,000, so maybe that will come. Meanwhile, the China imported 267,473 light trucks and passenger cars from the US in 2017, of the million or so total imports. GM is the best selling brand in China, with 10% of the market, though of course most of the 3.9 million GM cars sold in China annually (compared to 3 million here) aren't made in the US. It's not obvious that the tariff is giving the US an unfair disadvantage compared to anybody else. At the high end of the market it doesn't matter to anybody: sticker prices are two or three times higher in China than here (you can make a huge profit buying BMWs and Porsches here and selling them in China, though the makers are trying to put a stop to that), because that's what the market will take.

When Trump says, "they don't even want to take it," he is thinking about Japanese cars in the 1970s (when US carmakers refused to make cars with right-hand drive for the UK and Japanese markets and then complained about the fussiness of the foreign governments).

The heart of the poem is that bit about intellectual property. When Trump says, "a lot of people don't know what that means," he means, of course, that he doesn't know what it means. Trump has no idea what intellectual property is, but he knows he's outraged about it, burning with ressentiment, and that's important. You should be outraged too, because we're being taken advantage of in some way we can't comprehend. If it's so mysterious it must be really bad. We also don't need to know how the proposed trade war will fix it (it won't).

Fortunately we're doing really well (well, the numbers weren't exactly fantastic, 103,000 new jobs as opposed to the 193,000 predicted by the economists, and a "slight" increase in average wages, with unemployment unchanged at 4.1%), strong, fantastic, really well, so we must put a stop to the way we're being mistreated by punishing whoever it is who's making us feel so unhappy even though everything's so wonderful.

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