The Truth About the AHCA

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The senate has recently come out with its version of the AHCA. Since there are still no provisions about price controls on drugs I do not support it. Despite that it is important that the truth about it be told. Democrats have said that this bill is nothing but a massive tax cut for the rich. The truth is that Democrats will always say that no matter what Republicans do. We have to take a look at the actual taxes that have been repealed to see what happened. Obamacare delayed a lot of the most harmful taxes it required to run until Obama left office so some of the taxes I list here that have been repealed have not taken effect yet. They are mostly scheduled to take effect in the next year or two. As usual it should be the Trump administration and its Republican allies doing this but since they cannot be bothered too it falls to independent bloggers like me to do so.

Tax on Retiree Prescription Drug Coverage

Remember when Democrats tell you that Republicans want to push granny of a cliff? Democrats actually removed some of the benefits seniors had to push thru Obamacare. Seniors used to be able to recoup 28% of what they pay for prescription drugs and companies used to be able to take this as a deduction encouraging them to take on more seniors. This is especially important as seniors could have unique illnesses that generic drugs would not treat. The Republicans returned this benefit to seniors.

Chronic Care Tax

There is a tax deduction available for Americans who have high out of pocket costs. In order to pay for Obamacare Democrats reduced this deduction was reduced. Wealthy people are less likely to have high out of pocket costs. They would already have very good insurance that covers them. It is poorer people that have worse insurance that have the potential to get bigger costs. President Trump and Republicans returned this benefit to them.

HSA Withdrawal Tax

Democrats doubled the penalty to withdraw money from Health Savings Accounts for non-health related expenses to 20% from 10%. The AHCA bill restores the penalty to 10%. Wealthy people would have other sources of funds to draw money from instead of the HSA as that is already going to cost a minimum of 10%. The only people who would need to use this are those who have lower income. Trump and the Republicans return this to 10%.

Tax on Prescription Medicine

Over and above the reduced deductions for seniors the Democrats also levied a tax on prescription medicines. As mentioned seniors and others may have needs that generic medicines cannot fill so this is a direct tax on them. The truly wealthy would also have very good insurance which would probably cover those things already. Republicans have lowered this tax on the poor and middle class.

Surtax on Investment Income

This is the only thing that can be truly considered a tax break for the wealthy. At this point I would ask you to remember that Trump has already proposed that investment income from people who invest for a living be treated as income tax instead of capital gains tax. That already represents a massive increase in the tax liability for investment income. This is something that Republicans proposed not Democrats.

Medical Device Tax

Democrats levied a tax on medical devices to pay for Obamacare. The entire premise behind Obamacare is that when hospitals are given a cost. Like the uninsured packing emergency rooms they would then pass those costs on to the public. Using the very same logic Democrats used to justify Obamacare then this would be a tax on the public as the hospitals pass the costs on to the final consumer. Republicans have repealed this tax.

Medicine Cabinet Tax

As part of their suite of taxes to pay for Obamacare health saving accounts and flexible savings accounts were restricted from purchasing non-perscription over the counter medicines. Health Savings accounts are not limited to the very wealthy. Most of the people who use them are middle class. By limiting their accessibility to medicine Democrats have made healthcare more expensive for them. The Republicans have repealed this.

Individual Mandate

This is the biggest tax on them all. A tax on all people who do not have insurance. Who is more likely to have insurance a rich person or a poor one? Who is more likely to pay this tax? I think everyone knows the answer to that. Republicans have repealed this and instead rely on insurers to provide competitive options to attract customers.

Employer Mandate Tax

At first glance removing this tax only seems to benefit employers with more than 50 employees. When we take a closer look we see that the number of employees insured from work did not increase after Obamacare took effect nor did the companies pay any new taxes. The companies were already offering health insurance before or were structuring their new hires in such a way that they would not need to be offered health insurance through work.

As you can see most of the taxes that are repealed help the middle and lower income classes. The one thing that does help the rich has been addressed in tax reform. Democrats and their allies in the media hope that everyone is too lazy to look up what taxes have actually been repealed and instead rely on them for the information.

 

Europe is Mad at America. Why?

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Since President Trump took office we have had numerous reports of European leaders being upset at Trump and America. Europe is upset that our President is asking for them to pay more for their defense. They are complaining that we would like a more equitable trade deficit. They are positively livid that we pulled out of the Paris Treaty and refuse to pay for the modernization bill of China and other “developing” countries. Do you notice the common thread in these complaints? Europe does not see America as a separate country with its own culture, people, and goals. They view America as one giant wallet. If the purse strings are open then Europe loves America. When the purse strings tighten then they hate America. It really is that simple.

Old Order

In the same time period every liberal commentator has been screaming about how the old order is falling because of President Trump and this signals the decline of the American Empire. Has the old order failed? First we have to define what exactly that order is.

This order has existed since world war 2. In this arrangement America would pay for the defense of Europe and provide for the wealth of its people thru massive trade deficits. With the Marshall plan this even extended to using significant portions of the American GDP to rebuild European infrastructure. In exchange for this generosity European foreign policy was supposed to be subordinate to the American one. If we pointed to the soviets as the enemy then they were. If we pointed to the Chinese then they were. If we wanted to go to the Middle East or any other place to wage ware then they were obliged to provide their proxies not to mention their UN votes. The title of leader of the free world was not given, it was purchased.

There may have been some merit in preserving this deal but Europe has long since abrogated its end of the bargain. Since we funded their reconstruction Europe has increasingly been trying to pursue an independent foreign policy and has been very critical of America over the past few decades. We even had to suffer the indignity of invoking article 5 of NATO to coerce our allies into joining the 2nd Iraq war instead of having loyal allies joining of their own free will. At some point we had to ask ourselves what are we getting for the money we send over?

The Old Order is dead. Trump and America did not kill it. Europe did.

Trumpcare is Better than Obamacare

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I wanted to wait for some time before giving my reaction to Trumpcare so I can take a look at the actual proposals instead of making a knee jerk reaction. The truth is that Trumpcare is better than Obamacare. Unfortunately it is not that much better than Obamacare so I cannot support it. It does do away with the worst portion of Obamacare but it does not fix the main issues causing our healthcare costs to rise. There is little point to replacing a flawed system with a slightly less flawed system. It would be better to just let Obamacare implode.

The Good

Rising Uninsured 

Believe it or not this is a good thing. The main problem with Obamacare was that it forced everyone to get insurance. You did not have to want it or find it particularly useful but you were forced to get it. This meant that the insurance companies, many of whom had a monopoly in their individual markets, could offer you whatever it wanted and you would be forced to purchase it. It was your tough luck if the product they offered had a deductible that was too high or doctors you did not want to visit. In a regular market the consumer would be able to correct this behavior by the company, by refusing to buy the product. Under Obamacare if you did not care for the product offered Obama would hit you with his tax or penalty until you gave in and purchased the inferior product.

Trumpcare gives the power of choice back to the consumer. If the product is terrible then you can refuse to purchase it. The insurance companies will have to offer a better product to get these consumers to purchase it again instead of having a literal captive market. It turns out that if you actually offer people a choice some of them may opt not to purchase insurance and this is a perfectly valid and rational choice depending on what the product actually offered is. Theoretically you could mandate one insurance company to have a monopoly and provide insurance to everyone in the US. They would be worse than Obamacare plans with deductibles of 200k and one doctor available in the middle of nowhere but they would cover everyone with insurance they can’t use. Quality of insurance matters as well.  As a general rule the life expectancy in the US goes up every year since the 1980’s. In 2016, under Obamacare, the life expectancy dropped.

The only people who would lose insurance under Trumpcare are those who did not want insurance in the first place. They are those who were only forced to buy substandard insurance by the gun the government pointed to their head. It is important to note that the provisions that allowed previously uninsurable people to get insurance are still there. If they want to continue their older plans they still can. The rest should get better plans as the insurance companies are forced to compete with each other.

Age vs Income

ANother important change is that subsidies are now based on age and not on income. All things being equal the younger person will have a lower premium than the older person. The younger one tends to be healthier and use insurance less than the older one so the insurance company charges a lower price for them. Restructuring the subsidies means that they reach the older people who would need them more. The younger ones who pay less will get lower subsidies and if they still needed more help they would most likely qualify for medicaid, medicare, or some other program.

The Bad

While Trumpcare does force companies to compete for their customers it still does not solve the structural issues which raise the cost of healthcare. Earlier on I wrote another article on the alt right view for Obamacare. I understand we will not be getting everything on the wish list as we are just one component of the Trump coalition. At a bare minimum I would expect there to be price controls for drugs or price transparency between hospitals for any bills to get our support.

Price Controls

Americans pay ten times more than other countries for their medicines. Drugs make up around 10-20% of total medical costs. Pharmaceutical companies have gone on the record and said that they need to charge Americans this outrageous amount to make up for the costs of developing new drugs. There is no reason why American citizens should bear this cost alone. The whole world benefits from new drugs and other countries must step up and bear their portion of the cost.

I understand if it is too difficult to set a whole set of prices out of the blue therefore we can include a standard set on the average of other countries. For example the price of a certain drug x cannot exceed the average of the selling price of the drug in Britain, France, Germany, and Japan. If the government is able to negotiate lower prices then great but at the very least Trumpcare would set a ceiling.

Hospital Price Transparency 

Everything gets cheaper with more competition. We want the insurance companies to compete with each other to lower prices. We want to remove the monopoly of drug companies in the country and get prices for medicine from the rest of the world. Hospital care and procedures would be the next price point that can be lowered with competition.

As things stand it is next to impossible to get a quotation from a hospital for procedures done. Most, if not all, hospitals will not even give you a list in their websites of what they charge per procedure. You usually only find one right before or right after the things are done to you. How can competition exist when customers are not aware of the price of the items? As part of Trumpcare we would like to see a requirement where hospitals are forced to list their base prices in their websites and give quotations upon request.

Reducing the cost of healthcare is not limited to insurance. We can actually reduce the cost of the components of healthcare. Either or preferably both of these in Trumpcare would lower the bill for everyone.

Bannons Three Buckets

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In CPAC Steve Bannon provided the ideological background to the Trump administration in his three buckets. The topic has not generated much discussion which is surprising as you will rarely see the philosophy of the Trumpian wing of the GOP efficiently distilled into three bullet points as Bannon did.

Security and National Sovereignty 

When you discuss security the very first thing you go to is the defense budget and this is one of the priorities of the Trump administration. As things stand we are currently spending 4x what China is for defense, assuming that China is truthful in its public declarations which many analysts doubt. At first glance it looks like we are massively outspending our leading rival, yet this may not be true. Salaries of American personel dwarf those of their Chinese counterparts. In 2015 a US serviceman of enlisted rank would have been paid a minimum of 23k per year while a chinese leuitenant colonel would have been paid 6000 yuan a month or roughly 12k per year. Around half of the military budget is maintenance and operational costs. I don’t have any details of the chinese budget but the US military has many more comittments worldwide than China which leads to a higher portion of the budget being used for operations. While spending a fourth of the money it is very possible that China gets more men and materiel than America does.

The primary opponent for the military during the Trump administration is the terrorist states and organizations. We have already seen a remarkable paradigm shift in the way the Trump administration deals with terrorists as opposed to previous administrations. By conducting the Yemen raid the Trump administration has put terrorists on notice that they would no longer honor human shields that previous administrations did. The US has more than enough military power to defeat terrorists. The only thing lacking is the willpower to actually use it which the Trump team has shown that they have.

Lastly there will be a focus on reclaiming the independence of the United States from international institutions that chip away at our national sovereignty. The TPP withdrawal was a big first step as it had provisions which allowed for international courts to supercede the local elected representatives when the profits of the companies were in danger. A focus on bilateral trade agreements as opposed to complex multinational ones is important as well as it is far easier to suspend or cancel these argeements if they are no longer in our favor. Lastly withdrawal or reformation from international organizations that limit our options on a case to case basis of course.

Economic Nationalism

President Trump summed this point up perfectly in his speech to congress. He is the American president who works for American interest and not the global president who works for global interests.

First off no matter how much the left wants to confuse the two concepts nationalism is not isolationism and isolationism is not nationalism. Nationalism is simply doing what it best for your own countries national interest without any regard for ethics, morality , or any other artificial construct. Depending on the needs of the country the specific policies involved in this may actually change. In the time of President Reagan it was very nationalistic to pursue free trade. No other country had the industrial base to compete with America at that point in time so we had free reign to exploit the rest of the world. This is no longer the case as other countries have caught up with us so it ceases to be nationalistic.

At this point in time the Trump administration will be focusing on our various trade deals and tax reform. The way that the laws are structured makes it so that it is far more profitable to site your production facilities outside the country, not only that once those profits are realized our current laws make it more favorable to keep them outside the country than to repatriate them. Economic nationalism would make sure that the laws are set up to benefit our country and not others.

Economic nationalism also applies to employment. We currently have a system where it is far more beneficial for a company to hire illegal aliens as opposed to hiring citizens. We also have a system where it is better to replace local workers with h1-b imports while having the citizens train their replacements. Our employment system must benefit our citizens first.

Deconstruction

Bannon summarized this perfectly in CPAC. “When liberals cannot pass something they stick it in a regulation somewhere”. Out of all three buckets this is the ones liberals are actually most afraid of and why they never discuss this on its merits, instead fearmongering on the word “destruction”.

In the area of climate change Obama unilaterally entered into the Paris Accords. Under normal circumstances Obama would have had to have the senate ratify the treaty like other countries did, but since he knew they would not he entered into it as an executive agreement instead. When Cap and Trade failed to pass Obama put up the Clean power plan instead to bypass the legislature. This prompted Lawrence Tribe who actually argued for the democrats in Gore V Bush to equate this to burning the constitution. In the area of immigration reform Obama bypassed congress yet again to give lawful status to 4.3 million illegals. These are just some of the worst examples of overreach and there are dozens. Trump himself may end up passing a lot of executive orders in his term, mostly to reserve the orders of the previous administration.

Democrats are afraid to have all these taken away yet they do have the option to keep them. An option they always had but were too lazy to do. They can win elections and have them passed like Republicans do instead of relying on the courts and orders to bypass the elected branches of government.

The Theory of Political Capital

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Analysts like Morning Joe and others always point out that Trump is using up his political capital by making his moves and that he needs to reach out to the left in order to govern and rebuild it. This shows a fundamental misunderstanding in our political class about what exactly political capital is and how it is spent.

Political capital is the technical term for your currency in governing. It is used to get people to support things that they would normally oppose. Political capital is not only something you get during an election to be spent during your tenure, it is a fluid thing. When you do things that a person or group does not like you lose political capital and when you do things that a person or group likes then you gain political capital.

Trump

What has Trump done so far? He has rolled back regulations, nominated a justice the right loves, tried to impose harsher entry procedures, cracked down on illegals, and placed a cabinet the right mostly likes. If anything Trump even has more political capital with his voters than when he started. There is a portion of his voters who held their noses and voted for him for the supreme court pick and they are behind him now more than ever. After all they know they can count on him for future picks. Has Trump annoyed the left? Yes he has but he never had any political capital with them anyway. You can’t lose what you don’t have. In fact he may have gained more with the TPP pullout.

Obama

Contrast this with Obama. His first major legislation was Obamacare. The right was never going to like it no matter what so he was going to lose some political capital with them. The left should have liked it since that is what they voted him on. Except they didn’t. In an effort to compromise the provisions the left liked such as single payer were removed from the bill. By handling it this way Obama lost political capital with both the right and the left. At the end of the day he will go down as the president who decimated the democratic party. While Trump by sticking to his promises will have built up the GOP in the midterms.

Compromise

The main talking point of the left is that in order to succeed Trump must compromise with them. Nothing could be further from the truth. The left has no power. They are not needed to pass anything in congress and the court will soon be conservative. Compromising with the left will only lead to the alienation of Trump’s base which would be suicidal and would get you nothing. The people filing cases to stop your orders will not stop just because you compromise with others.

The left uses a moral argument as well. Trump is President of the whole country therefore he has to do what we want even if we lost. At the end of the day there is no merit in compromising with people who think you are literally Hitler. You may as well get your agenda done and win them over with success as any compromise will not do it. If you’re agenda was going to fail then it would have failed anyway without them.

It would be nice if the country was unified but it does not have to be. There are two competing visions for the country and at certain points they cannot be reconciled nor should they have to be. Everyone seems to forget that on the top of most historians list of great presidents is Abraham Lincoln. Instead of compromising with half the country he went to war with them. If he compromised with the democrats of his time African Americans would still be slaves.

Yuge in Yemen

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I wanted to wait for some time before giving my reaction to the raid in Yemen. Mostly to have a clearer picture of how the raid actually went and partly to see how other people would react to it and see what I saw. First of what actually happened? Seal team 6 ran a raid in Yemen. The goal was to capture some data and to kill some high ranking Al Qaeda leaders. When they got to the area they met some resistance which may have been heavier than expected. The Seal team had one member killed and 3 wounded with 1 aircraft destroyed. In exchange some high ranking Al Qaeda members were killed, along with the terrorists some women and children were killed as well. The Seal team members claim some of the women were firing back at them. Some data was recovered as well.

The media, predictably with anything related to Trump claims that this is a massive failure of an operation. This is actually a success in my book.

Paradigm Shift

One of the main reasons that the media lists the raid as a failure is that it killed women and children. Including the American born child of terrorist Al Zarkawi. This may sound cruel to everyone but this is a feature not a bug. One of our main challenges when dealing with terrorists is that they consistently use human shields. It is not a coincidence that these people were surrounded by women and children. That is by design. The terrorists know that America will not target them if they are surrounded by enough women and children that is why they make the conscious choice to have them there. In fact it looks like the higher the rank of the terrorist the more women and children they are surrounded with.

Targeting the terrorists even if they have human shields around them sends a powerful message to them. We will not give them any quarter any longer. They can surround themselves with all the sacrificial lambs that they want and we will still go after them. Once they find it no longer works maybe they will stop using human shields as well. Allowing the troops to engage while there are human shields also tells the terrorists that we have relaxed the rules of engagement and will be giving the troops more freedom in engagement. This is exactly what we need to finally make some headway with terrorism.

A navy seal was killed. It is always tragic when a soldier is killed but it does not mean that the mission is an automatic failure. In fact as we widen our scope of acceptable targets we may suffer even more casualties. In return we do exponentially more damage to the terrorists. The alternative of course is status quo , where we fight the same war on terror for 15 years with no progress. Just in this raid alone we killed some very senior Al Qaeda figures.

Yemen

Due to the loss of their civilians Yemen has withdrawn permission for US troops to conduct operations in their soil. Most people count this as a loss and I see a collective hand wringing from the perpetually outraged left as well. The reality is we lost Yemen as an ally when we supported Saudi Arabia invading them. Yemen is well aware that the civilians injured were used as human shields by the terrorists. They just never had another opportunity to feign outrage as the last operation we ran there happened before Saudi Arabia invaded them. Since both of their national interests ran against each other we had to select which one to support and in the wider scheme of things Saudi Arabia was mor important.

This operation signifies that we are finally ready and willing to fight terrorists and eradicate them at all costs. Mattis and Trump are off to a great start in their new crusade against terror and I wish them more success.

America First in Action: World War 2

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Whenever America First is discussed liberals will always bring up World War 2 as an argument against it. According to them if we applied America First principles in World War 2 we would not have helped the Allies and Germany would have won. Remember that in the Alt:Right view I mentioned that war can be in the national interest and should be waged if it is so. Nationalism is not synonymous with isolationism. I will show here that World War 2 was a perfect exercise in America First.

Timing

The United States entered World War 2 in December 1941. The hostilities of World War 2 started in 1939. If we were pursuing a strategy that put the interests of other countries first we would have entered the war at that point but we waited till 1941 till the Pearl Harbor attack and may have waited even longer if that did not happen.

What happened in between 1939 and the end of 1941 when the US entered? Japan had already conquered a lot of the colonies of the European powers in Asia. It had already invaded China though was of course predictably stalled. France had already fallen and Britain itself was thoroughly bombed in the Battle of Britain. Germany already made headway into Russia. Stalingrad did not happen till early in 1942 but anyone could have predicted that the advance would stall given the Russian winter and Russian defense in depth combat doctrines. The US did of course send some material aid which kept the stalemate going when the allies would have collapsed.

In simpler terms. The US waited till all sides had beaten itself silly before it entered the war. This kept US casualties down as we missed the worst of the pitched battles. In D-day for instance the allies suffered around 50000 dead and that was its worst battle of the war. In Stalingrad the soviets found 250000 German corpses and the Soviets found 40000 civilian corpses in Stalingrad alone. During the war industries and ports from all the major countries were hit repeatedly while US ports in Virginia and California were safe and US factories in Ohio and Michigan were operating at peak capacity. In effect at the end of the war the US was the only country left who had the untouched industries and an effective monopoly on post war goods.

If the US committed much earlier then it would have been involved in more brutal battles and the European industries would have come thru better and if it committed much later, then the fight may have reached US soil with all the damage that brings.

Concessions

The US has always had a major problem when competing with Europe. The European countries through centuries of dominance was able to extract much wealth from its colonies around the world and consolidate it in Europe which meant that the European countries had a significant advantage when competing with America.

If the US put the interests of the world ahead of its own interest in World War 2 it would have given all the materials the allies needed to fight World War 2 for free. Instead we put America First. Initially we had cash and carry to extract the wealth they had accumulated and then when they could no longer afford to pay for the goods we did lend-lease to extract future compromises. At the end of the war the European countries had lost all of their advantages against the US.

World War 2 is only one instance where a nation benefits when pursuing its own interests first. By putting American interests ahead of all others we were able to use World War 2 as a springboard to become a superpower from the great power we were before.

The Alt Right View: Justice Gorsuch

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President Trump has nominated Judge Neil Gorsuch for the supreme court and I have seen very few articles on the reaction of the alt-right to the pick. By all accounts Gorsuch has an impressive resume hitting all the right law schools and positions. He has a view of the constitution similar to Justice Scalia and seems to be for term limits. He also seems to be pro-life and against the ability of federal agencies making regulations themselves as opposed to operating on the powers given by the legislature.

Not About Us

The stand of the alt-right is pretty simple. The Supreme Court pick is not about us. We got behind Trump because we shared his views on economic nationalism, strict border controls, and harsher stances against Islamic terrorism. The Supreme Court pick, while important was low on the list of our priorities. We do recognize though that there are some other members of the Trump coalition who voted for Trump exclusively because of the Supreme Court pick. It is much more important to us that they are satisfied with this pick than if we ourselves are satisfied with it. We recognize that we are in a coalition and each faction of that coalition has their own priorities. In order to keep the coalition strong and supportive of President Trump the individual members have to feel that they are getting their needs met. That way we get our priorities met as well. It does us no good if we are happy with this pick but the rest are not. In this issue as long as the religious right and traditional conservatives are happy with the pick then we are as well.

Core and Non-Core

The stance we have on this issue will be a recurring theme you will notice with the alt-right. We have stances on all issues but we realize which issues are our core issues which we cannot compromise on and which ones are non-core issues which we are happy to offer to our coalition partners in order to get our main agenda passed. In a previous article I mentioned our main ideology is pragmatic nationalism and we understand enough about politics to know that we are not going to get everything we want we just have to secure our core issues.

If you poll voters that identify with the alt-right I think you will find that a surprising number would be pro-choice and would be agnostic on gun rights. It just so happens that these issues are very important to the people willing to coalesce with us so we support them in it with the understanding that they would support us in the future as well.

From what I am seeing it looks like the conservatives and religious right are very happy with this appointment so we approve of it and are very happy with it as well.

Did We Hand Asia to China?

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The outcry has begun over the TPP. Richard Haas says that it will slow US growth and the primary beneficiary is China. Micheal Mcaul says we just handed China a major victory. For free! I don’t need to mention the others including John Mccain espousing gloom and doom.

What Actually Happened?

We cancelled a multi-lateral trade deal with a bunch of countries in Asia. Does this mean that we will cease all trade with all Asian countries for now till eternity? No it does not. We have bilateral agreements. We have the WTO. We have prior relationships. All it means is that we will not have this particular trade agreement.

Why are we against it? Well first off bi lateral agreements are much easier to manage and negotiate than ones involving multiple countries. They are also much easier to change and annul. We also have a problem with the potential for outsourcing that this deal has as we have experienced first hand with NAFTA.

Why TPP?

The main argument for TPP seems to be that if we do not do it China will. China is pushing this deal called Regional Comprehensive Economic Partnership which would theoretically replace the TPP. According to foreign policy analysts this would freeze out America and give China regional dominance in Asia. Basically China would replace the US in the web of Asian trade.

Let us take a look at the numbers. TPP includes 37.5 of global GDP , 25.9% of global trade, and 11.1% of the global population. RCEP includes 30.5% of global GDP, 27.4% of global trade, and 47.9% of the global population.

Do you see the problem now?

Can China Replace the US?

In short no. If you look at the numbers all the economies involved in the RECP are producer economies. For normal trade deals to work there normally has to be a stronger economy which outsources the jobs to the poorer one who then makes cheap products. The stronger economy now has access to cheap goods extending their budget and can then shift to other more productive fields.

In the case of RCEP the economies involved are the ones that are being outsourced too. The sweet sweet irony here is the countries involved in the RCEP have even lower wage scales than China! China will be in the exact same position as the US as its manufacturing base is outsourced to Vietnam and the other countries.

30.5% of the GDP shared by almost 50% of the populace means that there are almost no consumers to sell to and very little opportunity to make the profits required for the deal to be worth it. It says that almost everyone involved is barely subsisting.

The misconception here is that China can replace the US because of the size of its GDP. The US is the most desirable market in the world not just because of the production of its people but because of its purchasing power. Welfare, Food Stamps, Government Assistance, Easy access to credit. You may not like some of these things but it means that the average American can spend consume a much greater amount of goods than their paycheck would suggest.

In summary. China cannot replace the US in Asia with its trade deal. China and the US fulfill different roles in trade. RCEP is looking a lot like their version of NAFTA. The people who think that China will use this deal to be “economically dominant” are the same people who thought NAFTA was a good idea. The people in RCEP will need bilateral agreements with the US to have a market to sell to. For most of them the US will still be the most important trading partner.

The Alt-Right View: Trade War

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For our topic today I will be discussing our views on trade wars. I have wanted to do this topic for a while as I feel it is one of the few legitimate concerns people would have over President Trump and the alt-right.

To begin with a trade war or economic war is another form of war so it follows all the rules that I outlined when I discussed our views on war. Trade wars should only be done out of national interest and once started there should be no limits to return to peace as fast as possible. I would also like to add that the objective of a trade war does not necessarily have to be economic. We started embargoes against states like North Korea or Iran, not because we need them to open their markets, which no one cares about but because we wanted to inspire societal change by replacing their form of government and political change by correcting the attitudes of their leaders. At the end of the day Economic wars are just another tool in our quiver to further our national interest.

People who do not follow our philosophy wonder why we are not more concerned with a trade war. More than anything our views are pragmatic. We believe that the poor state of the American economy and our trade balance gives us certain advantages in a trade war. These advantages disappear once the economy and trade balance get better but we should use them while they are here. In the Alt Right view trade wars follow two rules.

The Customer is Always Right

Think back to your own life. If something happens and the local Mcdonalds does something to annoy you then you can easily switch to the neighboring KFC , Wendy’s, or Burger King. Due to the number of choices you have available about the only thing that will happen is that the seasoning in your fried chicken changes. The price does not even go up as Wendys, Burger King, and KFC will still have to compete amongst themselves.

The US faces a similar situation with China. From Clothing (34B) to computers (40B) to toys (28B). Almost everything that China sells to the US is a product with multiple competitors. In fact you may not even notice if the Chinese brand is not available as there is a Korean, Philippine, or Japanese one you could buy instead. In fact the other countries would step up production to fill in the void left by the Chinese. The volume of trade is another consideration. The top 10 products that China sells to the US totals over 250 billion in volume. If the US market was closed off or restricted to them there would be no other market available to take that volume and they would have to reduce production.

Contrast this with the US economy. The product we sell in the most volume to China is soy beans(10B). The total of the top 10 products the US sells to China does not even hit 40b. It is a lot easier to find new costumers for 40b worth of goods than it is to find them for 250 b worth of goods. The fact that we produce so little is not a good thing and if we succeed it will change. Yet this is the reality we are dealing with as of the moment.

There is also a misconception that since there is more Chinese than Americans that China is a more important market to enter which is why companies would prefer it. This is wrong. America is the most important market in the world and companies would always prefer access to it over China. Due to social security, welfare, credit cards, and other devices each American has more purchasing power than what his salary would suggest and even that salary would be much higher than his Chinese counterparts. The only real value the Chinese have is low wages and even that is being taken over by the Indians, Vietnamese, and others.

At this point people will then ask. Isn’t the main beneficiary Vietnam, India, and the other countries production will shift to? Why yes. Thank you for noticing. In an age where China is flexing its muscles in Asia its greatest fear next to a US- Russia alliance is having its production transferred to the other Asian countries by the same methods American production was transferred to it. Remember the trade war does not always have to have an economic goal. As for the US dealing with multiple smaller countries is easier than dealing with one major superpower. Some of the jobs which require more infrastructure and those involving restricted technology may find its way back as well.

Unless You Have a Monopoly

This is the second that overrides the first. Think back to your life. When Sprint or Verizon pisses you off what can you do? Cry harder. Unless of course you have actual competition in you area. I mention this rule for the sake of completeness as it does not apply to the situation in China and the US. If one did have a monopoly they could use that to great advantage in a trade war.

Having a monopoly does not necessarily mean having a monopoly in the classical sense. You could supply so much of the demand for the product worldwide that you have a functional monopoly. For instance in World War 2 so much of the demand for oil was spoken for that even if the US was not the only supplier of oil for Japan it could still cripple them by refusing to sell even if they are the consumer as they had no one else to buy from.

You could also have a created monopoly because of technology. This usually applies to the military and other things of that nature. While there are many different tanks for example once you buy an American one then you would have to keep buying ones from American defense contractors as the spare parts would not be compatible if you suddenly started buying Chinese ones. Incidentally this is why forcing European countries to double their defense budgets is a great move as it creates a lot of new business for US defense contractors and jobs for the industries involved in it.

The Customer is Always Right Unless You Have a Monopoly. Which is why we are not worried about a trade war with China.