Monday, December 18, 2006

The Good News and the Bad News Out of Congress

Three Republicans have finally lived up to their anti-pork-barrel rhetoric. They are Jim DeMint of South Carolina, Tom Coburn of Oklahoma, and Jeff Sessions of Alabama, and they have "blocked a giant, fat-filled omnibus spending bill that was stuffed with more than 10,000 waste-ridden, earmarked pork projects that would have cost $17 billion." (Source)

[Thanks to for the image.]

That's the good news.

Then we also have the bad news: Democrat Senator Charles Schumer of New York has co-authored a bill with Republican Lindsey Graham "that would impose a tariff of 27.5 percent on Chinese imports into [the US.]"

Tariffs as a scare tactic for the Chinese may or may not work; in any case, they will force prices up and hence CPI inflation up. The Fed should fight this with tooth and nail. They can't prevent a politician from grandstanding; it's unconstitutional, I suppose, under the First Amendment. But they can try to educate them about the ramifications of tariffs on the general public.

When a tariff is put in place, the cost of it must be recuperated in prices or in its absorption by the producer. With all the competition they must have, I doubt the Chinese manufacturing industry can absorb it; so prices will go up. The politicians see it as a competitive tool, but in fact it is a boomerang that comes right back and hits us regular Joes in the pocketbook.


Blogger Idaho_Spud said...

Glad to see these guys are trying to save us taxpayers a few pennies. Now if they'd just stop squandering hundreds of billions in conflicts in countries that hate our freaking guts... maybe we could talk about serious savings.

As for the neo Smoot-Hawley guys, at this point I'd consider it to be saber-rattling and posturing for the voters. I wouldn't get too worked up over it unless it got *passed* as a bill. Still, we need to keep *all* these guys on our radar. None of them are looking out for John Q.

4:22 AM  

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