Not the Economics Nobel Prize

 Not the Economics Nobel Prize

It has widely been accepted for nearly 100 years tariffs, and other economic protections policies, greatly contributed to, and possibly caused, the Great Depression of the 1930’s. In free-market capitalist economies the consumer is the final determinant on what is a good or bad product or service, and is the main driver of economic growth, employment, and inflation. In free-market capitalist economies the Consumer is King.

It has been proven, time and time again, the consumer prefers the lowest price cost of comparable products and services, more so than any other determining factor. Tariffs, and other protectionist policies cause supply-chain problems, price uncertainties, and ultimately pain for the consumer. Any professional economist who has deviated from that generally accepted economic principle of the past 100 years has eliminated themselves from being considered for the Economics Nobel Prize. No professional economist will ever win the Nobel Prize for trying to advance tariffs, trade-wars, or protectionist policies.

The first quarter of 2025 ends on Monday. Most major stock market indices are in or near correction territory, with 10% or more of declines from recent highs. Washington D.C. is drowning in $36 trillion of debt, the highest debt-to-GDP ratio in 90 years, recently had a credit rating downgrade, and is funded by a series of bizarre continuation resolutions that barely keeps the government open. The $2.2 trillion of pandemic relief savings monies expired this past September. Nearly half of all Americans could not withstand a $1,000 financial emergency. 

Currently, the U.S. consumer might be single-handedly preventing the economy from slipping into a recession. The American middle class has been decimated over the past thirty years with one bad trade deal after another. U.S. consumers did not mind, however, because they were able to get lower-priced goods, keeping inflation in check, but greatly contributing to the current wage and wealth gap between the classes. Tariffs cause massive price fluctuations for products, the very thing the American middle class gained from losing jobs to bad trade deals. Furthermore, the Federal Reserve under Chairman Powell distributed $2 trillion of interest-free loans directly from the Federal Reserve Bank during the recent pandemic crisis, causing the current problems with stagflation, another blow to the U.S. consumer.

It is true the U.S. workers have suffered from very bad trade deals of the past thirty years. However, tariffs and other protectionist policies might actually be worse for the U.S. consumer, the main driver of economic growth. Any potential gains from a trade-war will not be realized for ten or more years. The American people could better be served by honest brokers in Washington D.C. who do trade deals on behalf of the American People, instead of promoting special political interest groups. With the current unemployment level at 4%, a decades low level, it is expected to rise in coming months, cutting further into Americans’ purchasing power as workers lose jobs.

Rural America has very few large Finance Departments or big multi-million dollar I.T. Departments. Actual Accounting Firms are almost impossible to find in Rural America. Most small business owners wear multiple hats when keeping his/her professional business running. Economics Majors do quite well in Rural America, however. With the availability of E-Trade, Interactive Brokers, and e-commerce the prospects for Economists and Economics Majors looks even better. Nevertheless, Professional Economists who do not toe-the-line on the generally accepted principle of tariffs being bad economics will never win the Nobel Prize.