Economists were wrong about tariffs. They need to figure out why.
Inflation would surge. Supply chains would crash. And the economy would be plunged into a deep recession while the stock market tanked. When President Donald Trump imposed huge tariffs on imports in April, the mainstream economic establishment and the big forecasters on Wall Street were virtually united on one point: The tariffs would trigger stagflation, at best, and a deep slump, at worst. It sounded like life would resemble a post-apocalypse Netflix series, with survivors dodging zombies and fighting one another for the last few items at the mall.
Goldman Sachs put the odds of a full-blown recession at 45 percent. Torsten Slok of private equity firm Apollo, one of the most respected economists on Wall Street, went a lot further, predicting that the odds of what he termed a “voluntary trade reset recession” were 90 percent. Nobel Prize winner Paul Krugman argued that “the biggest trade shock in history” meant “a recession seems likely.”
And yet, six months on, events have not unfolded that way. The big thinkers got this one wrong — and if economics is to maintain any credibility, they need to address why that happened.
-snip-
Finally, it is starting to look as if the United States actually was getting a raw deal on trade. The U.S. now imposes an average tariff of 18.6 percent, the highest since 1933, according to Yale’s Budget Lab. And yet prices are rising by only about 3 percent. It turns out the foreign exporters were making enough money from American consumers that they can absorb most of the new tariffs, either in lower profits or through efficiency savings. They are not being paid by American consumers the way that was predicted. The extra $30 billion a month in revenue the tariffs are already generating is not exactly “free money” (after all, the most enduring lesson of this dismal science is that there is no such thing as a lunch you don’t have to pay for). But it’s as close to it as anything we have seen for a long time.
Washington Post
What economists and the legacy media failed to consider was the enormous profit margins that manufacturers make on their products, and the role elasticity of demand has on pricing.
= new reply since forum marked as read
QUIRKY?????? 
boy's about as sharp as a bowling ball
https://archive.ph/J2XY
To its many fans, Apple is more of a religious cult than a company. An iToaster that downloads music while toasting bread would probably get the same kind of worldwide attention. Don't let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyj and Motorola Inc. won't be whispering nervously into their clamshells over a new threat to their business. The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant.
If column inches and airtime guaranteed commercial success, Apple would already have a global hit on its hands. For the past week, it has been impossible to open a newspaper or look at a Web site without reading something about the shiny new phone. Certainly, it looks like a nice piece of equipment. The iPhone combines Apple's iPod music and video player with a mobile phone as well as having wireless Internet access for e-mail. Instead of lugging around a phone for making calls, an MP3 player for listening to music, and a Blackberry for checking your e- mail, you can do all three on one device. Even better, you only need one charger. It will be released in the U.S. in June, with a rollout to the rest of the world later, and will cost $499 to $599, depending on how much storage space you want. How many might they sell? Ten million in 2008, according to Apple Chief Executive Officer Steve Jobs.
Three Reasons
Not everyone is sold on the idea. ``The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry,'' Charles Golvin, an analyst at Forrester Research Inc., said in a report this month. There are three reasons that Apple is unlikely to make much of an impact on this market -- and why it is too early to start dumping your Nokia shares.
First, Apple is late to this party. The company didn't invent the personal computer or MP3 player, but it was among the pioneers of both products. Yet there is no shortage of phones out there. There are already big companies that dominate the space, all of whom will defend their turf. That means Apple will have to fight hard for every sale. Next, the mobile-phone industry depends on cooperation with the big networks. Phones -- the high-end ones in particular --are usually sold with a network contract. The provider subsidizes the handset in the U.K. and hopes to recoup its money with ridiculously expensive charges for calls and data. Yet Apple has never been good at working with other companies. If it knew how to do that, it would be Microsoft Corp.
snip
It won't come from the iPhone. Apple will sell a few to its fans, but the iPhone won't make a long-term mark on the industry.
(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)
