Latest news with #Wolfers
Yahoo
18 hours ago
- Business
- Yahoo
Trump's 'One Big, Beautiful Bill' Is 'The Largest Redistribution From Poor To Rich In American History,' Says Economist Justin Wolfers Amid Tax Cuts, Spending Slashes And Tariffs
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. According to Economist Justin Wolfers, the tax, tariff, and budget policies of the Trump administration are creating one of the most lopsided transfers of wealth in U.S. history. What Happened: On Thursday, in a post on X, Wolfers, a prominent critic of President Donald Trump, highlighted the regressive nature of the latter's economic policies. 'Trump's tax cuts overwhelmingly help the rich,' he says, referring to the 'One Big, Beautiful Bill,' which, according to the Congressional Budget Office (CBO), would result in a 4% increase in resources for households in the highest decile by 2027, and a 2% decline for those at the lowest. Trending: Let your money work smarter: . No hidden fees, no commitment. Wolfers adds that the spending cuts are primarily targeted at the poor, such as the stripping of 3.2 million people from the Supplemental Nutrition Assistance Program (SNAP) food stamp program, aimed at cutting $295 billion in spending over the next decade. To top it off, the 'tariffs cost the poor a larger share of their income,' Wolfers says, calling the rolling of these three 'regressive policies' together, one of the 'largest redistribution from poor to rich in American history.' Wolfers underscored his point with a chart titled 'The budget bill passed by the House is anti-Robin Hood,' a visualization showing how the package would funnel benefits up the income scale and leave lower-income households worse off. Why It Matters: Woflers has been a vocal critic of Trump's 'One Big, Beautiful Bill' since the very beginning, having said that 'It's just pure reverse Robin Hood,' a couple of weeks ago. His concerns have since been echoed by several other leading analysts and experts, with Craig Shapiro, the Managing Partner at the Collabfund, saying that the bill will 'explode the deficit while enriching the highest decile of Americans at the expense of the lowest decile.' Even billionaire Elon Musk, a former Trump ally, has criticized the bill in recent weeks, calling it a 'disgusting abomination,' resulting in a much-publicized fallout with the President. Read Next: Level up your portfolio tracking with Snowball Analytics: see all your investments in one dashboard with real-time stock and dividend tracking for free today. Image Via Shutterstock This article Trump's 'One Big, Beautiful Bill' Is 'The Largest Redistribution From Poor To Rich In American History,' Says Economist Justin Wolfers Amid Tax Cuts, Spending Slashes And Tariffs originally appeared on Sign in to access your portfolio
Yahoo
07-06-2025
- Business
- Yahoo
Wall Street Has a New Secret Code for Laughing Behind Donald Trump's Back
Wall Street traders have adopted a term to mock President Trump's flip-flopping trade policy. TACO, an acronym that stands for 'Trump Always Chickens Out,' was coined by Financial Times columnist Robert Armstrong. It has since become a favorite among stockbrokers. Simply put, the tongue-in-cheek term describes how markets dip on President Trump's tariff threats, only to rebound when he inevitably reverses course. In the latest example, markets rallied earlier this week after Trump delayed the 50 percent tariff on the European Union that he had threatened just days earlier. In response to his relenting, the S&P 500 posted its biggest gain in weeks. Speaking on MSNBC Tuesday, Australian economist Justin Wolfers mocked Trump by saying this tariff policy 'nearly lasted one entire long weekend.' 'He was a little unlucky. There was Memorial Day, extended the weekend to three days, and you couldn't have a tariff policy last a full weekend. So, Friday's policy was reversed by Monday. And so, we get to analyze it today on Tuesday. And I think that's really symptomatic,' he said. Suggesting that Trump's word is worth very little in certain circumstances, including tariff threats, Wolfers used the example of Wall Street's new favorite acronym. 'In fact, on Wall Street right now, and it's one level funny and another level tragic. There's a trade called the TACO trade, T-A-C-O, Trump Always Chickens Out,' he said. Wolfers had said Trump's word now lacks 'credibility.' 'There was a time when the president opened his mouth, when you had to pay attention because you thought it meant something, that it was a shift in policy that other countries could rely on and respond to. That's no longer the case,' he said. Salomon Fiedler, an analyst from German bank Berenberg, is just one of many speculators who now say they are happy to wait it out when Trump makes a threat. 'Wild threats by Trump are not unusual,' he wrote in a note last month, when the president 'paused' the super-charged 'Liberation Day' duties he imposed on a slew of countries. 'Given the damage the U.S. would do to itself with this tariff, he will probably not follow through.' Trump paused the duties to allow his economic buffs to secure renewed deals with dozens of nations. So far, only the United Kingdom and China have inked any sort of agreement. Sign in to access your portfolio
Miami Herald
19-05-2025
- Business
- Miami Herald
Shark Tank's Mark Cuban sounds the alarm on devastating fact about tariffs
Ever since President Donald Trump unveiled the fine details of his tariffs plan on April 2, a day the administration refers to as "Liberation Day," Americans have been worried about how the new levies will change their lives. While Trump has softened his stance on some of the tariffs, there's no question American will still pay a hefty price. The changes will cost the average household more than $2,300 a year, according to the Yale Budget Lab. Don't miss the move: Subscribe to TheStreet's free daily newsletter This became much more real last week when Walmart - the country's biggest retailer - made an announcement that despite its intent to maintain its current pricing, it would have to raise some prices, with CEO Doug McMillon saying, "Given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins." Related: Walmart and Target may lose access to popular products in tariff war Trump quickly responded to Million's announcement via his social media network Truth Social, saying the retailer should "eat the tariffs" and that "I'll be watching" - a rather bewildering threat to make, as even a company making billions would take a health-threatening hit to its bottom line in the circumstances. Now Cost Plus Drugs founder Mark Cuban has pointed out a new tidbit about tariffs that many of us are missing, and it's something that Americans need to understand about the future that's coming this year and beyond. On May 18, Mark Cuban reshared a post on his BlueSky account from economist Justin Wolfers of a video interview with MSNBC. In his own post featuring the video, Wolfers said, "The Trump tariffs are 'stackable,' and so average tariff rates are higher than you're seeing in most media reports. Lemme 'splain." When asked about the stacking of tariffs during the interview, Wolfers had some important information to share. "All of those numbers you just read are very confusing, so let me deconfuse them," Wolfers said. Wolfers goes on to say that back in January of this year, tariffs on China were already in place. Related: Tariffs, surprise downgrade will weigh on market "They were tariffs that the first Trump administration had put on," he said. "There were tariffs that the Biden administration had continued or put on, and there's even tariffs from earlier." Wolfers said the previous tariffs were about 8 percent, but are higher for some things like girls' dresses and lower for some other items. Then Wolfers explains what it all really means. "It means on average that the tariff rate is the Trump 30 percent plus the 8 percent he inherited from history, so 38 percent," he said. "And all of those are extra costs are being charged to Americans and will either go through to higher price tags in the store or lower profit margins for the store that's selling it to you. But from past experience, most of it's going to be higher price tags for Americans." Wolfers has openly and repeatedly criticized Trump via his BlueSky posts, recently saying in another post, "An abusive spouse destroys a marriage using the same techniques the President is using to [negotiate] trade agreements." While resharing Wolfers' post is an obvious sign Cuban agrees with his points, Cuban has also had his own harsh words for both President Trump and his administration. On May 11, Cuban posted some thoughts on his BlueSky account about Trump's comments during an NBC interview where he was directly asked if he needed to uphold the constitution as president. "I don't know," Trump replied. "I know that I have brilliant lawyers that work for me, and they are obviously going to follow what the Supreme Court said." Cuban roasted Trump's reply in his post, saying, "Could you imagine the response if a democratic president said they didn't know if they had to uphold the Constitution? How fast would the articles of impeachment be drawn? Twenty minutes at the most." Related: Toyota makes a disturbing announcement about tariffs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Los Angeles Times
17-04-2025
- Business
- Los Angeles Times
Trump fired a tariff torpedo at China — and hit Boeing right between the eyes
We keep hearing about all the goods that will become more expensive for Americans thanks to Donald Trump's tariff policy, such as it is: clothing, shoes, cars, food, especially anything imported from China. But the latest skirmish between Trump and China has painted a target on this nation's most important manufacturing exporter: Boeing Co. On Tuesday, news emerged that Chinese authorities have ordered the country's airlines not to place new orders for Boeing aircraft and to get approval from the government before taking delivery of planes already ordered. The size of the blow China struck against Boeing is hard to measure, especially in the short term. Industry analysts calculate China's orders to amount to 5% to 6% of the company's overall international order book. But Boeing is the biggest exporter in the U.S., and about 80% of its production goes overseas. That makes Boeing especially vulnerable to all the chaos created by Trump's tariff war. Earlier this week, Michael O'Leary, the chief executive of the Ireland-based low-cost airline Ryanair, said the tariffs might prompt his company to defer taking delivery of 25 Boeing airliners until sometime next year, instead of in August. The Chinese ban plainly hit Trump in the solar plexus. After the ban was reported Tuesday, Trump took to his social media platform, Truth Social, to grouse that China 'just reneged on the big Boeing deal, saying that they will 'not take possession' of fully committed to aircraft.' If that's so, Trump has no one to blame but himself. Boeing's plight is just one aspect of a White House tariff policy that increasingly resembles, as Shakespeare might have put it, 'a tale told by an idiot, full of sound and fury, signifying nothing.' A more contemporary judgment is that of economist Justin Wolfers of the University of Michigan, who on Tuesday put his finger on the fundamental incoherence of Trump's policy: 'This is a tariff policy we've been told will solve the fentanyl crisis, get rid of illegal immigration, rescue the budget deficit, solve bilateral trade deficits and cure toe fungus,' Wolfers said on MSNBC. 'All of these things can't happen at once and in the way they're pursuing them actually we're serving none of those goals.' To take just a couple of those goals Wolfers enumerated — reducing the budget deficit and shrinking bilateral trade deficits — neither can be achieved by prompting trading partners to shut down or defer purchases from a domestic exporter as weighty as Boeing. Nor is Boeing the only major manufacturer affected by the trade war. Shares in the AI chipmaker Nvidia fell nearly 7% on Wednesday after it disclosed a $5.5-billion charge linked to U.S. restrictions on export sales of its H20 chips. The long-term cost of any Chinese roadblock on Boeing can't be predicted just yet. Boeing has declined to comment on China's decision and Chinese authorities have remained mum. Stock traders punished Boeing shares Tuesday, sending them down by nearly 2.4%, but the shares recovered modestly in Wednesday's trading, up 0.77% at the close. Boeing and its followers on Wall Street have largely taken a sanguine view of the Chinese decree. Boeing has an enormous backlog of 5,000 orders, company Chief Financial Officer Brian West told an investment conference last month. Aircraft that have been due for Chinese deliveries can be redirected to customers that are currently waiting in line for theirs. But the dispute can't help but hobble Boeing's efforts to compete with the European consortium Airbus, which already has a leg up over Boeing in the China market. China is the biggest customer of Airbus, which is scheduled to deliver 136 planes to China this year, 148 next year and a total of 850 over the coming decade. By contrast, Boeing's book of unfilled Chinese orders numbers only 130, mostly of 737 Max airliners. The company says it delivered 18 planes to China's domestic airlines and other Chinese customers through March; market observers estimate that an additional 26 aircraft have been scheduled for delivery during the rest of this year. China ceased ordering Boeing planes in 2018 after ordering 927 planes from 2010 through 2017. It didn't resume orders until 2020, when it contracted for five aircraft — two for a domestic cargo airline and three for a leasing company. It placed no orders again in 2022, only one (to a leasing company) in 2023, and none again last year or so far this year. That's a painful record, given that Boeing's own market projection identifies China as the largest customer for commercial aircraft in the world, outside the U.S., over the next two decades, accounting for about 20% of global demand. That makes it a market from which Boeing can't afford to be shut out. There can be no gainsaying that Boeing has been in a bad way at least since 2018, the last year in which the company booked an annual profit. Over the subsequent six years, it lost $35.7 billion on revenue of $408 billion. Boeing's financial results for the first quarter of 2025 will be released April 23. The company also has been hemorrhaging cash — burning through $14.3 billion last year. Management says the cash burn will continue through part of this year, but turn positive later in 2025. Boeing's string of losses stemmed in part from a series of operational and engineering disasters, notably the two crashes of its 737 Max passenger planes in 2018 and 2019, which took 346 lives. The crashes resulted in a grounding of the aircraft that was only lifted in late 2020, as well as fines, penalties and compensation payments the company has estimated at $20 billion. Boeing's reputation for quality and safety took another hit in January 2024 when a fuselage panel on a new 737 Max operated by Alaska Airlines blew out in mid-flight. Another grounding of the aircraft followed. A further blow came in September, when its Starliner spacecraft was judged so faulty that NASA refused to allow it to transport two astronauts home from the International Space Station. The craft had to return to Earth without passengers. The astronauts were finally brought home last month aboard a SpaceX Dragon spacecraft after spending 286 days in space. These events opened a window on Boeing's greater malady, the collapse of its traditions of superb engineering and rigorous quality control and the company's conversion into a finance-oriented behemoth that, as it happened, made neither profits nor trustworthy products. The roots of Boeing's transformation could be found in its 1997 acquisition of McDonnell Douglas. That deal brought to the C-suite the acquired company's top management and its cost-cutting culture; in the Boeing corridors, the standing joke was that 'McDonnell Douglas bought Boeing with Boeing's money.' In 2001, Boeing moved its headquarters from Seattle, where it had been founded in 1916, to Chicago, prompted largely by tens of millions of dollars in tax abatements and other benefits. The move put 2,100 miles between headquarters and the company's most important segment, commercial aircraft, which remained in Seattle. Another misstep was the decision to farm out the design and manufacture of crucial components for its 787 Dreamliner to suppliers around the nation and in foreign countries such as Italy, Sweden, China, and South Korea. Boeing's dream was to save money. The reality is that it would have been cheaper to keep a lot of this work in-house. The 787 ended up with more foreign-made content — 30% — than any other Boeing plane, according to the Society of Professional Engineering Employees in Aerospace, the union representing Boeing engineers. That compared with just over 5% in the company's workhorse 747 airliner. But some of the pieces manufactured by far-flung suppliers didn't fit together. Some subcontractors couldn't meet their output quotas, creating huge production logjams when crucial parts weren't available in the necessary sequence. The next-generation airliner was billions of dollars over budget and three years late. A favorite investment adage says that when a situation is 'unsustainable,' it won't be sustained. Trump's tariff war looks unsustainable on two fronts. It makes absolutely no sense as an economic policy; even if one believes that tariffs, surgically applied, can redress imbalances in trade relations, economists almost universally agree that the way this administration has gone about them obliterates any possible gains. Then there's the unsustainable impact on American manufacturers, who are the putative beneficiaries of this war, not to mention on American consumers. Someone has to blink, and the record shows it's mostly likely to be Trump. It's about time that he did.
The Independent
11-04-2025
- Business
- The Independent
‘The damage is done': Why Trump's tariff pause has not stopped the risk of global recession
Economic experts have told The Independent the risk of a global recession remains despite the 90-day delay in Donald Trump's aggressive tariff increases. Trump made an abrupt U-turn on Wednesday when he announced the three-month pause to all affected countries bar China, following economic meltdown and widespread backlash. But Pau S Pujolas, who wrote a study that was cited by the Trump administration to justify the tariff hikes, says the president's 'recklessness' means it may be too little, too late. 'Yes, the damage is done,' he said. 'Global value chains are suffering with all the recklessness, uncertainty is a good friend of recession. 'This is not a serious way to manage an economy. Firms and households need clear, predictable policies to take the right decisions and make the economy blossom.' Even if Trump decides not to reintroduce the high tariffs, the global economic risk remains 'until either Trump stops playing the tariff game, or Congress removes the power vested on the president', the associate professor at McMaster University in Canada added. Economist Justin Wolfers agreed there would be lasting consequences despite the pause, as the president has shown he will say something one day and change his mind the next. 'The damage there is very, very lasting and very profound, because basically, he has shown he's completely unreliable,' he told The Independent. The Trump administration had announced aggressive tariff increases on nearly all of its trading partners, slapping levies of more than 30 per cent on some of the world's weakest economies and placing a minimum tariff of 10 per cent on almost everyone else. But after creating market turmoil, which was estimated to have wiped trillions off global stock markets by Tuesday, the president abruptly announced he would pause the hikes for 90 days, with the exception of the widespread 10 per cent levy, while also raising duties on China by an additional 125 per cent. Wolfers, a professor of economics at the University of Michigan, said while pressing pause on the major levies had changed the risk of a global recession, it had done so 'by less than you think'. Even with the delay on tariffs of more than 30 per cent on some countries, with the previously increased tariffs on steel and cars, the US still has some of the highest tariffs in the world, he said. 'The tariff rate has fallen from maybe, you know, 20 times that of our trading partners, to be 15 times that of our trading partners. So it went from absurd to ridiculous,' he said. Betting markets had recession odds at about 68 per cent on Wednesday morning, and those odds had fallen by Wednesday afternoon after the U-turn but were still at 53 per cent, Prof Wolfers said. 'It's taken the edge off it, but it's only taken the edge off. So the risks remain incredibly elevated,' he said. Leading independent Australian economist Chris Richardson said the risk of a recession remains elevated because the constant mind-changing was terrible for long-term business planning and public sector decision-making. 'Chaos comes at a cost, and the tariff stuff is playing out to the tune of 'Hokey Pokey'. Tariffs go on, tariffs go off, then get shaken all about,' he said. The constant change in America's trade policy has also made the people who lend money to financial markets nervous, he said, as evidenced by the fall in the US bond market. 'What's happening with the Trump stuff is the world is seeing risks going up, and people choosing to be safer: less risk, less return,' he added. Dan Coatsworth, investment analyst at AJ Bell, said the past week of uncertainty alone could have already had 'a major negative impact on spending' and hurt economies, but that uncertainty was continuing. 'The risk of a global recession remains high until there is more clarity on tariffs longer term,' he said. 'Countries on the receiving end of US tariffs are still negotiating deals, and a 10 per cent baseline tariff during the 90-day 'pause' period means we aren't back to how the world worked pre-Liberation Day.' Bernard Yaros, lead US economist at Oxford Economics, said all these questions will 'reinforce a 'wait and see' attitude among households and firms'. 'The longer the uncertainty persists, the weaker consumer spending and business investment will be,' he said. Richardson said the escalating tariff war between China and the US will also have broader ramifications, and the longer that continues, the more people elsewhere will feel its negative effects. 'We're not necessarily going to see big problems off the back of this yet, but the longer it lingers, the greater the risk,' he said. Coatsworth echoed that sentiment, saying the trade relationship between the US and China was 'in tatters'. 'It is now significantly more expensive for a US company to buy goods from China, and for Chinese companies to buy from the US,' he added. 'The end customer will ultimately bear the extra cost and they could vote with their feet by buying less or not at all.'
