WHAT’S SO BAD ABOUT GOODS?

Poetry and consumption are the most flattering of diseases. ~ William Shenstone 

 How’s your holiday shopping coming along? Beyond the holidays, have you been buying more goods or services than in the past? As I’ll discuss, some folks are concerned we consumers have been buying too many goods and not enough services. Goods are bad, services are better. The giant consumer segment of our economy is not in balance.

Even Pope Francis is concerned about consumption. He ended his visit to Greece several weeks ago by encouraging its young people to “follow your dreams and not be tempted by the consumerist ‘sirens’ of today that promise easy pleasures.” Those sirens are blowing a different tune of late.

Recently, polls indicate how we have felt increasingly uneasy about the economy. Family finances are in fairly decent shape for most people, due in part to the exceptional series of Covid-related government “economic impact payments” they’ve received since April 2020. The federal government has sent 478 million direct-cash payments to qualified recipients. Ninety-three percent (93%) of Americans have received these outlays.

Government-provided pandemic assistance extended to businesses as well as people. Government-funded, Covid-related business support was $753.8 billion in 2020, principally through the Paycheck Protection Program and the Restaurant Revitalization Fund.

Beginning in July, eligible parents have additionally received five (5) monthly child tax credit assistance checks. Remarkably, this aid – totaling about $90 billion (B) – has quickly reduced the national poverty rate by nearly 50%, compared to three (3) years ago.

Largely because of these support programs, 64% of respondents believed their personal finances were good in a recent poll, but incongruently only 35% described the national economy as good. Stored-up household savings from all these compensations may total $2 trillion (T), which is an impressively large sum. But all is not well.

According to insistent media proclamations by economic wizzes, we consumers are buying too many goods and not enough services with these unspent funds. I find these declarations a bit puzzling, as I’ll mention.

After a very long slumber, inflation has reared its costly head across the economy with consumer demand outstripping available supply. In November, the Consumer Price Index (CPI) increased 6.8%, the largest 12-month increase since June 1982.

Even the Federal Reserve Chair Jerome Powell finally succumbed to this economic reality by stating last week he would no longer call inflation “transitory.” He didn’t mention what he would be calling inflation now. I’d suggest “unfortunately augmented.” The CPI’s energy index rose a whopping 33.3% over the last 12 months, the food index increased 6.1%, which comes as no surprise to those of us who frequent gas stations and grocery stores.

Because of the Great Resignation, where workers are quitting their jobs in unexpectedly large numbers, businesses are offering higher wages and salaries to entice workers back. Over the past year, wages have increased 4.2%, almost a 50% rise compared to pre-Covid times.

How long will these inflationary trends last? No one knows, despite erudite claims to the contrary. What the Fed is going to do about this continuing, augmented inflation was partially revealed on December 15 when the Fed stated it would further reduce its expansionary policies for the economy “in light of inflation developments.” This means the Fed will likely increase interest rates several times next year. How much will the markets shudder at this key change in monetary policy? On Friday December 17, the S&P500 Index had lost just 1.89%, perhaps because the market’s expectations for a policy change have already been built into stock values.

The current, augmented level of inflation is due to three (3) factors: consumers’ growing demand for goods and services (especially goods), the fragility of some supply-chains to provide more goods and recently-elevated inflationary expectations.

This last item is the most problematic. Policy-makers have next to no control over how or why consumers hold such expectations or how they can influence them, short of implementing broad, contractionary economic policies. Such a policy reversal will not happen by Congress, which with the president dictates fiscal policy. The Dems would resist such policies as exceptionally fraught politically.

Senate majority leader Chuck Schumer has no interest in halting his troops from passing the now-reduced, but still extensive $1.85T Build Back Better (BBB) Act. That’s even though several months of full-court-press worthy efforts by the president and other Dems has yet to convince Sen. Manchin to put his name in the BBB’s yea column. The senator publicly stated on Dec. 19 he could not support the legislation, a change in the usual behind-closed-doors negotiations with the White House. Despite the media hurrah, I expect the negotiating isn’t dead yet, a bit like we saw for a while in Monty Python’s Life of Brian.

It’s ironic that the Dems have argued the far-reaching BBB expenditures will actually reduce inflation. A large upsurge in government spending, like the BBB Act, spreads more money throughout the economy, which raises business and consumer demand, and likely prices. Thus, federal economic policy to reduce inflation will be solely the Fed’s responsibility through its monetary policy mechanisms.

But back to goods. Personal consumption expenditures (PCE) have long been the nation’s single largest type of spending. Consumer purchases account for about 70% of our GDP. In contrast, government expenditures are just 17% of GDP, despite our being saturated with news of trillion-dollar legislative efforts. This is as true currently as it was a decade ago.

Our consumer purchases are placed into two (2) principal categories, goods expenditures and services expenditures. About 60% of our PCE are for services (everything from haircuts and restaurant meals to streaming service fees) and around 40% for goods (including furniture, jewelry, gasoline, rent and college tuition). These proportions haven’t changed much at all during the last year, as shown in the table.

Goods and Services Sectors Expenditures and Employment

Economic Sector	2021Q3	2020Q3	2011
Personal Goods expenditures (trillions $)	$5.524 (40.3%)*	$5.159 (40.2%)*	$3.331 (35.3%)*
Goods employment (millions of workers)	N.A.	20.022 (12.8%)**	18.244 (11.9%)**
Personal Services expenditures (trillions $)	$8.366 (61.0%)*	$7.815 (61.0%)*	$6.102 (64.7%)*
Services employment (millions of workers)	N.A.	122.774 (74.7%)**	114.652 (74.6%)**

*Percent of personal consumption expenditures (PCE). **Percent of total labor force. 

Personal consumer goods purchases have slightly increased during the past year, by $365B, which is a lot of money representing a 6.6% overall increase. Yet it’s only a one-tenth of one percent increase, as a proportion of PCE. From 2020Q3 to this year, services purchases have also increased, by $551B, a 6.6% increase from last year; but with no proportional change. During the last decade, as a proportion of PCE, goods expenditures have fallen by 5% relative to services. These diminutive changes have the wizzes concerned.

Consumers’ minor shift to purchasing goods recently has risen relative to services in no small part because of the pandemic’s restrictions. But the shift to goods expenditures is a very modest change, seemingly not worthy of much attention. However, I found the likely reason for all the interest.

The wizzes’ focus may not be on changes in expenditures, but on employment levels, also shown in the table. Our economy’s services sector employs a disproportionately larger number of people, relative to the goods sector. In 2020Q3 (latest year for data), 122.8 million people were employed in the services sector, far more than the 20 million in the goods sector. Services employment is 6x larger than the goods industries, and accounts for almost 75% of our total labor force. Intriguingly, services sector labor productivity (measured by output per employee) is much lower, just 45.3%, than the goods sector.

During the last 12 months, workers’ wages and salaries have risen higher than any time in more than 15 years. These increases reflect the labor market’s growing tightness. Goods-producing workers’ wages and salaries increased 3.5% on an annual basis. Service-providing workers’ wages and salaries increased 4.3% during the same period, among the highest of any sector.

During the pandemic, six (6) of the 13 services sector sub-industries, accounting for 74% of the sector’s total employment, have lost 2.8M employees as of November. The largest losses have been in leisure and hospitality – 90,000 restaurants have closed permanently during Covid – and government, especially local governments.

Despite the ever-lowering official unemployment rate, now 4.2%, the services sector’s loss of employees is a serious personal and  macroeconomic problem. Our low unemployment rate masks the ever-increasing number of workers who have dropped-out of the labor market, are no longer actively looking for jobs, and thus technically are not “unemployed.”

Santa’s bag filled with more goods and less services.

The rise of Omicron will only intensify simultaneous inflationary prices and dwindling labor availability. Covid keeps making services, like eating in restaurants and a host of other shared, public activities riskier. Even Santa’s becoming concerned. His bag of goodies will likely need to be enlarged, making his travels down chimneys that much more challenging. 

CONSCIENTIOUS VERSUS CONSPICUOUS CONSUMPTION

Consumption is the sole end and purpose of all production. ~ Adam Smith 

Any American knows personal spending on goods and services is the lifeblood of our economy. The statistic that economists universally trot out to emphasize personal consumption expenditures’ pre-eminence is that it represents 70% of our nation’s GDP. In the first quarter of 2020, this statistic was 69.5% of real GDP; close enough for a lot of jazz, and spending. In dollar terms, that’s $13.2 trillion or $39,800 on a per capita basis. In April, consumption declined a whopping 13.4%, in large part due to Sheltering-in-Place and related orders that have curbed consumers’ and business’ behavior to restrict the spread of the coronavirus. This is why the recession was well underway in April.

Progressives and others have argued these government restrictions have unduly hurt lower-income people and have increased inequality. Income and wealth inequality has gradually grown for a quite a while. The pandemic has added to this trend. Income inequality has been strengthened by consumption inequality, because it’s not conscientious enough according to a recent commentary in the New York Times.

Although income inequality has risen, no economist or policy-maker can authoritatively say what level of inequality is best. Should it be 18% lower? No one knows, other than it’s too high now. And because inequality is now acknowledged to appear in so many different guises, there’s no broadly-agreed upon policy remedy. Thinking just about unequal income or wealth distribution is passé. Only a decade or so ago, economists thought instituting more progressive income taxes (in the economic sense) and higher estate/inheritance taxes could effect a reduction in inequality.

No longer. Inequality has simply become too complex and multi-faceted. Its complexity exasperates the policy dilemma of resolving it. I counted 25 different types of inequality that have been mentioned in the media during the past few years. Beyond traditional income and wealth inequality, everything from geography (urban v rural) and criminal justice to education, library fines and the pandemic are wrapped in inequality flags.

A key ingredient in any inequality assessment is its measurement, particularly of how rich, wealthy people are defined. The 2011 Occupy Movement popularized the “we are the 99%” slogan, and correspondingly defined “the 1%” as The Rich. The Nobel-laureate economist Joseph Stiglitz wrote an influential article in the May 2011 issue of Vanity Fair that talked about the harmful effects of the 1%ers’ disproportionately large ownership of society’s wealth and resources. For the past decade the top 1% of income earners has become an unofficial standard for defining the richest Americans, sometimes supplemented by using a thinner slice,  the top 0.1%, for the really, really richest people.

The recent NYT commentary about inequality characterized the rich in a much broader fashion, not the top 1%, but the top 25% (quartile) of the income distribution. The story concentrates on inequality in consumption rather than income per se. A household’s consumption is positively and strongly related to their income (in econo-speak, it’s their disposable, after-tax income). Economic studies have shown for decades that higher-income households directly spend more on consumption than lower-income ones, but proportionately less, relative to their income.

If you’ve taken Econ 101 you might ever-so-vaguely remember that once upon a time, economists fervently debated how to explain household consumption patterns. Now we debate other, usually more exotic economic behaviors. We use the term “average propensity to consume” (APC) to measure what percent of your income you spend on consumption versus savings (non-consumption). If you spend $800 of your $1000 monthly disposable income on consumption, your APC is 80%. Research by the San Francisco Federal Reserve indicates that the APC of households with the lowest 10% income is 36% greater than that with those with highest 10% income; the APC of the lowest 10% is 25% greater than that those with the highest 25% income.

The NYT analysis castigates rich, wealthy people for not spending enough of their income to keep low-wage workers fiscally healthy. The authors criticize their broadly-defined quartile of the richest people for not consuming conscientiously enough.

Thorstein Veblen, who created the term “conspicuous consumption” in his radical 1899 book The Theory of the Leisure Class, would be delighted. The Rich’s consumption patterns, especially the conspicuous ones, have been disparaged (and covertly envied) for over a century. Nevertheless, the NYT study authors’ criticism doesn’t seem to care as much about whether The Rich spend conspicuously – say buying a Porsche 911 GT1. They care whether The Rich’s consumption is conscientiously appropriate in benefiting low-wage workers.

The differences in adjusted gross income (AGI) needed to be in the top 25% versus the top 1% are stark. The top 25% needs at least an AGI of $77,372; the top 1% needs $437,404, 5.5x more AGI. For perspective, the 2019 US median household income was $63,030, just 22% less than the top 25%ers’ minimum $77,372 AGI.

Who believes $77,372 is a rich household’s income? No one. It’s true the tippy top of the top 25%ers are indeed very rich, but this quartile of income distribution is very broadly defined, by definition and the lower half includes folks who usually aren’t considered very rich. For this reason, using the overly-broad top 25% to characterize The Rich is flawed. There’s way too many not-rich folks in this segment, at least 20% too many, more likely 24% too many.

Why do the authors use this expansive, quartile-based definition of rich – and not something more suitable, like the top 1%? No rationale is provided. Back to consumption.

Early in their commentary the reader is introduced to both the victims and the villains, “The recession has crushed this kind of work [Low-wage labor done by The Workers, who are servers and staff in Manhattan restaurants around Lincoln Center.], in particular: service jobs that depend directly on the spending — and the whims — of the well-off.” The authors directly blame the well-off, aka The Rich, for this economic crushing due to their lack of consumption spending.

Curiously, the authors do not mention several other factors that have magnified small business workers’ woes during the covid crisis. First, there’s no mention that all restaurants throughout New York and elsewhere have been closed for sit-in dining for months due to the coronavirus. Nationally, one in five small businesses have closed down. Second, that some truly rich folks (the top 1%ers, not the 25% richest) have departed NYC for other locations, and thus aren’t consuming anything in the Big Apple. Interestingly, thousands of young, probably un-rich people (but some maybe in the lower reaches of the top 25%) are also leaving NYC because of the pandemic and its associated costs. Third, that richer people are more likely to consume goods and services via online services, including (shudder) Amazon. Thus the top 25%ers’ expenditures at small businesses during covid-19 may have shifted online and outside of some “small businesses.” Businesses have been rapidly adopting online sales, that now represent 11.8% of total US retail sales, in order to stay in business. Only 11.8%? The online proportion seems much larger given the media’s focus/hype about online sales.

The authors state that the top 25% of income-earners have disproportionately not returned to their full pre-covid “rich consumption” patterns at small businesses, and that’s causing severe the problems for The Workers. However, no income group’s consumption has fully recovered to pre-covid levels. The “top-middle 25%ers’” spending at small businesses has also fallen but that reduction merits no apparent alarm. It’s hard to imagine that The Workers care much at all where their income comes from. Whether it’s dollars from rich, middle-class or other customers isn’t likely a concern. The Workers only care they are being paid with legal tender, not who hands it to them.

According to the story, by April Fools Day people at every income level drastically and quickly dropped their consumption expenditures at small businesses between 35% to over 40%; the top 25%ers had the most decrease. After mid-April when the first stimulus checks started arriving, small business revenue (SBRev) started to gradually rise in fits and starts. By June 1, the top-middle 25%ers had increased their portion of SBRev to where it was only 16% below that of March; SBRev attributed to top 25%ers was 26% down from March.

The authors’ vegan beef about The Rich is a relative one, not absolute. Their criticism focuses on this 10% difference (26% v 16%) in the top 25%ers’ SBRev recovery gap compared to the top-middle 25%ers’. The story faults these rich folks, who earn as little as $77,372, for not spending more of their income to help The Workers. The authors argue that conscientious consumption – whereby consumers spend their money to benefit low-wage workers – will reduce inequitable consumption. The authors believe The Rich haven’t gotten this message. Thus, consumption by The Rich, who haven’t lost their jobs like The Workers, have devastated low-wage workers, who “count on high-income people spending money.”

The authors’ believe The Rich should make consumption decisions on the degree to which their dollars will help low-wage workers. It sounds worthy, but oh my. Following their novel precept of conscientious consumption, before I decide where to purchase mouthwash, I should conscientiously learn how many low-wage workers are employed at CVS, Amazon, Target, Walgreens and, of course, the locally-owned mouthwash stores, and hopefully also get some understanding about how my mouthwash purchase will specifically benefit these workers at each business. I expect the number of consumers who would use this rationale for conscientiousness would, at most, be the proportion of folks who are now publicly wearing masks in South Carolina, Oklahoma or Montana – all states suffering from significant increases in coronavirus cases.

My bet is that low-wage workers in small businesses, like all workers in all businesses, are counting on everyone ramping up spending their money on goods and services, not just those who are rich. Castigating nearly 35 million households for not sufficiently consuming to conscientiously help low-income laborers is a fool’s errand.

Instead, how about biting a large, legislative bullet and, after November, significantly raising the federal minimum wage from the appalling $7.25/hr that was set 21 years ago, so at least 21 states’ minimum wages would be increased.

Getting out of this horrible recession will take the rich, as well as  you, me and everyone else raising their consumption for whatever we want. The more the merrier.

CONSUMER ILLUSION: Why we don’t get any respect.

We believe we are the consumers, but we really are the consumed. ~ Bryant H. McGill 

What group has the most at stake in virtually all of the laws and regulations now being either considered or changed by the president and his Republican-controlled Congress? This assemblage of Americans is the most numerous and broadest of any group, but probably doesn’t immediately come to mind as an answer to the question. It is consumers; the millions of individuals and households who every day buy goods and services in every market in the US. Consumers run our economy. But we don’t get any respect.

Last week Congress managed save some face by rescuing itself – and spared consumers from inevitable harm – from yet another government shutdown and passed a Continuing Resolution (CR) for funding through September 30, the end of the federal government’s fiscal year. It’s a very low bar to surmount – to keep the federal government actually operating – but somehow this do-nothing Congress succeeded. Thank goodness for small favors. The largest single loser from the CR was the president, who didn’t get a dime for building his wall nor get reductions in funding of agencies like the National Institutes of Health. Astonishingly, the CR also prevented Attorney General Jeff Sessions from interfering with marijuana policy provisions of the 44 states that have already passed medical marijuana laws. Who would have guessed?

Yet the media stories about the CR never mentioned American consumers as winners for having the government stay in business. Instead, despite the vast importance of consumers in this country, stories like this one mentioned distinct, individual groups like coal miners and Planned Parenthood as winners who were spared the fiscal axe that the president and many Republicans wanted to sway their way, not consumers.

As we already know from personal experience, we are a nation of consumers. Personal consumption expenditures (PCE) drive our GDP and make up the single largest component, 68.6%, of our top-ranked GDP. PCE has grown gradually over the past 30 years, as shown in the figure below from the St. Louis Federal Reserve Bank. Most recently, the BEA reported that during the last quarter (2017Q2) PCE had increased a dismal 0.23%. Consumer purchases of durable goods – those lasting 3 years or longer (like appliances, furnishings and cars) – decreased 0.19%. This softness in consumer spending is in large part why the latest, annualized real (inflation-adjusted) GDP growth was a dreary 0.7%. Given his usual denials of economic reality, I expect the president labelled this fact as “fake news.” 

Personal Consumption Expenditures as a percent of GDP, 1984-2013

 The chart below shows the US share of GDP from PCE tops the list when compared to other large nations. Notice that as a share of China’s GDP, the world’s second-largest, Chinese consumer expenditures just account for about one-half of the US share. Yes, we certainly know how to shop.

Source: CIA World Factbook

How many consumers are there in the US? Surprisingly, it’s not a straightforward question to answer despite the importance of consumption in our economy. Using several sources, I determined there are about 249 million adult consumers in the US, including you and me. Our per capita average annual consumption is now $40,326. Per capita consumption has increased only 1.7% in real terms since the end of the Great Recession.

How are we consumers doing? The Federal Reserve’s apt actions to hold inflation in check have clearly benefited consumers. In some ways consuming in the US has never been better. There are more goods and services being marketed to us than ever before. When I was last at the grocery store, I counted an amazing 167 different types of pasta sauce on the shelves! 5/5/17 at the Park & Pay/Safeway

The following table illustrates how we consumers have been doing during the decades from 1950 until 2015, relative to average salary-based purchasing power for 3 staples of modern consumption; a gallon of gasoline, a new car and a loaf of bread. The national average annual salary is taken from the Social Security Administration’s national average wage index. I’ve examined how much work time, based on average salary, it has taken to buy these items over this period.

Consumer Welfare during the Past 6 Decades

Year	Average Annual Salary*	Price of Gasoline (1 gal.)	Minutes to Purchase Gasoline	Price of New Car	Hours to Purchase Car	Price of Bread (Loaf)	Minutes to Purchase Bread
1950	$2,643	$0.18	8.5 min.	$1,510	1,189 hrs.	$0.12	5.7 min.
1980	$12,513	$1.19	11.9	$7,210	1,198	$0.50	5.0
2010	$41,674	$2.96	8.9	$27,950	1,395	$1.41	4.2
2015	$48,099	$2.40	6.2	$33,543	1,445	$1.44	3.7

Sources: Social Security Administration, AAA, KBB, thepeoplehistory.com, infoplease.com, BLS

*Calculated from the national average wage index (AWI).

As shown, consumers in 2015 can buy a gallon of gas for 23% less time than in 1950, and about 50% less time than in 1980 (when OPEC was not exporting petroleum to the US for the second time), due principally to the rise in average salary during these decades. Unlike gasoline and bread, the time needed to buy a new car has risen. Through the 1950 to 2015 time frame consumers have needed to spend 21.5% more hours to buy a new car. It’s worth remembering the quality and capabilities of the “average” new car have vastly improved since 1950, much more than either gasoline or bread. And speaking of dough, recent consumers have definitely benefited when buying a loaf of bread. In 2015 we had to work 65% fewer minutes to buy the bread than in 1950. 

Our near-term prospects as consumers, however, are quite mixed due to the Trump administration’s strong anti-consumer bent. Politicians and policy-makers invariably pledge allegiance to consumers and our interests, but it’s fleeting and illusory. Rarely do they offer any improvement in consumer wellbeing.  In effect, we’re so numerous we’re taken for granted.

Consumers represent a very broad and diverse group of citizens. In contrast, “special interests” are exceedingly narrow and much deeper. Politicians spend far more time and effort satisfying these better-defined special interests than inclusive consumers.

Citizens do not march on Washington, or elsewhere, as identified consumers. Whenever we march it’s as worried scientists, as people concerned about environmental or other specific policies. Such marches and public assemblies carry considerable weight and should continue, but consumerist sentiments are never at the forefront of these actions, except when we’re pushing a grocery cart down the actual or electronic aisles.

This is a large part of the illusion connected with consumers. As consumers we’re essential for the health and growth of our economy, but rarely important when policies that affect us (and virtually all of them do in some way) are considered by the federal, state or local governments. Usually we are seen just as a source of tax revenue. In a grand irony, consumers are too numerous to be politically acknowledged. Not one of the $11,645,680,000,000 dollar “votes” that we consumers spent in March 2017 gets counted when this administration formulates economic, health and social policies that affect us all. We are illusory ciphers.

The House of Representative’s passage of the Republicans’ new health care legislation this week will impose higher costs and more restrictions for virtually all US health care consumers. For Republicans, this legislation isn't ultimately about health care at all, it's about reducing taxes for the rich. President Trump’s and Republicans’ pledge to weaken and eliminate the Consumer Finance Protection Bureau, begun in 2011 via the Dodd-Frank Act, typifies their anti-consumer views.  

The president’s policy pronouncements regarding international trade will directly and indirectly increase the price of a vast array of consumer goods sold in America. First, let’s look at his proposed tariffs on Mexican imports into the US; then his annunciated 45% tariff on Chinese imports to the US.

The president has said he wants either a 20% or a 35% tariff (depending on what else is going on in his jumbled, “untrained” mind) on imports from Mexico to pay for his Wall. In 2015, Mexico exported $295 billion (B) worth of goods into the US, including vegetables and fruit (avocados, tomatoes, peppers, lemons, watermelons and mangoes), beer (Corona, Dos Equis, Pacifico, Modelo), electronic equipment and machinery, and cars and trucks (Toyota, Ford, Chevrolet, Honda, VW, Nissan and Ram trucks). One US Congressman said consumer prices of Mexican goods subject to such tariffs could increase by 20%. How’s them (more expensive) avocados, Coronas and Fords for you John and Jane America.

Illustrating the president’s inability to connect the economic dots, such a tariff would be paid in varying degrees by US consumers of Mexican imports, not Mexican producers. It is worth noting that Mexican-made automobiles and trucks, its most valuable import to the US ($75.2B in 2016), are 40% comprised of US-made parts. If such tariffs are imposed it could threaten some of the 6 million US jobs that depend on trade with Mexico according to the US Chamber of Commerce. Mexico has already stated such tariffs will provoke it to purchase corn and other agricultural products ($18B US exports in 2016) and US electrical and other manufactured machinery ($83B) from other nations and/or impose retaliatory tariffs on US exports. Shades of the Smoot-Hawley Tariff Act that induced international trade wars in the 1930s and intensified the Great Depression. Maybe the president is thinking Andrew Jackson should have considered it to avoid the Depression. 

If the president’s suggested 45% tariff on Chinese imports is actually enacted, similar though larger negative consequences would ensue for US consumers because the tariff is higher and the imports are greater. In 2015, China’s imports into the US totaled $483.2B, almost twice as large as Mexico’s. China’s imports, ordered in descending value, include electronic equipment (cellphones, computers, printers), machinery, furniture, toys/games, footwear and clothing. By value, China is the source of 75% of cellphones and 93% of tablets or laptops shipped into the US.

A 45% tariff on Chinese-made goods could drive up US retail prices on those goods by an average of about 10%, according to Capital Economics. Consumers would find it hard to escape these price increases. "There are few alternative sources for the main products the US buys from China," says Mark Williams, Capital Economics' chief Asia economist. China would also retaliate with their own tariffs on US products, as they did in 2009 when the Obama administration imposed levies on automobile tires imported from China. China imposed a tariff on US chicken (including chicken feet) exports. The US tire tariffs didn’t bring back domestic tire industry employment, but did allow manufacturers to raise their prices when US consumers bought them.

President Trump purports to be interested in increasing blue-collar jobs, but his tariffs will increase the prices of goods that far more blue-collared workers and other consumers regularly buy, all in the name of his Wall and “fairness.” Tariffs may possibly be good politics, but they are poor economics for the majority of customers because they raise consumer prices and potentially reduce jobs dependent on US exports.

Customers will be consumed by higher costs to buy health care, food, cars and trucks, clothing, electronics and other key items of modern life, courtesy of the Trump administration. The president has yet to support consumers with his scattershot, inconsistent policies. He’s firmly on the side of private, moneyed interests. His policies are all about consumer illusion and falling discretionary incomes. President Trump’s anti-consumerist policies won’t make America any greater again for our 249 million adult consumers, just more expensive and less healthy.