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stock market crash affects everyone
Last week, President Trump, against the advice of almost every professional economist, announced substantial tariffs on almost every country in the world, thereby launching an economic war--a global trade war.
Whether your firm’s supply chain is being disrupted and demand for your products is falling, or your own your 401 (k) retirement fund is being shredded, or your household is struggling to make ends meet, you need to pay attention. There are 5 types of actions you should consider to have a chance of prevailing amid the inexorable chaos that is already engulfing the world.
1. See Through Significant Disinformation
You should realize that you are not alone in struggling to understand what is going on. President Trump’s announcement on April 2 contained substantial disinformation. At the most basic level, the president seems only occasionally aware that the that a tariff is a tax on the country imposing it, thereby creating an economic burden on the citizens of that country.
It is not true, as he alleged on April 2 that the U.S. is “of a hollowed out country with empty factories, unemployed workers and stagnant wages.” The fact is that over the last several decades U.S. has outperformed all its competitors and is now the dominant world economy. As economist Fareed Zakaria notes:
The U.S. economy has doubled in size since 2008, while the Eurozone has stagnated.
US average wages are now roughly 40% greater than those of the other advanced economies, when it was only 20% greater in 1990.
Today, American personal incomes are about 150 percent higher than Japanese personal incomes, while in 1995, Japanese personal incomes were 50% higher than those in the U.S.
While U.S. manufacturing has declined in this century, owing principally to higher personal incomes, this has been more than compensated by the extraordinary growth of services through exporting software, movies, music, law, and banking.
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