About the author: David R. Breuhan is the vice president of Schwartz & Co. a Michigan investment firm, and the author of Spread The Wealth, More Haves Fewer Have-Nots.

The most important and globally misunderstood aspect of tariffs is their impact on the stock market. History has demonstrated that tariffs can cause immediate market corrections and destroy investor capital. They also backfire on American manufacturers and consumers.

Tariffs may be aimed at foreign companies and governments, but their domestic consequences are often far greater. Advocates for protectionist measures on steel, lumber, electric vehicles, and other products fail to understand that everyone who invests in the stock market has suffered losses because of this policy. It isn’t just the approximately 60% of Americans who directly own stocks, often in their 401(k)s and individual retirement accounts, union pensions and teacher retirement plans will be affected, too. The minor bump in price protection for certain industries is more than wiped out by trillions eviscerated in the market capitalization in the major indexes and the domestic economic dislocation.

I wrote Spread The Wealth: More Haves, Fewer Have-nots to provide solutions to current problems in public policy and economics. Elections in the United States bring political change to Washington, but too often, economic policies remain the same.

The intent of this economic policy book is to promote the formation of great public policy through a Renaissance in modern economic thought. The work supports the historically successful key elements of free trade, stable currency and private property rights. These philosophies have been espoused by philosophers  such as Plato, Aristotle, Adam Smith, David Ricardo, Ludwig von Mises, Fredrich Hayek and Milton Friedman. Unfortunately, this wisdom has been replaced by econometric modeling and ignorance.
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The book, Spread The Wealth, requires action – simply reading the book is not enough.

The first sentence of the United States Constitution begins with, “We the people.” Citizens must become actively involved in the formation of public policy. Jefferson stated, “the greatest threat to democracy is ignorance.”  After reading  the book, visit and educate your Member of Congress: demand reform.

1.  Buy it

2.  Read it

3.  Act on it

Unenlightened benevolence is attempting to solve a problem and actually making it worse.

A recent program that meets this definition is Cash for Clunkers. After taking a majority stake in two of the three major automobile companies in the United States, the government has now paid individuals to buy cars from these companies.

This program replaced an asset that was owned by the driver (an old car) with a  liability (a new car) that carries with it 60 payments for five years. The net effect is additional taxation in the form of higher annual license fees and automobile insurance.
The intent of the $3 billion program was to help domestic auto manufacturers, but the Ford Focus was the only domestic car ranking in the top ten of all cars purchased under this program.

• Sales of General Motors and Chrysler vehicles continued to decrease.
• Total sales were equivalent to only three weeks worth of annual U.S. cars sold.
• Total fuel savings between the vehicles turned in and those replacing them were roughly 22 seconds of annual U.S. consumption.
• The government either borrowed or artificially created the money to finance this program. This ultimately results in inflation and a weak currency.

Cash for Clunkers ignored the basic function of markets by redirecting consumers’ limited resources away from their most highly valued use. Consumers purchased cars they didn’t need instead of paying down their debt.  Apparently members of Congress ignored the lessons of “everyone should own a home.”

For more on Cash for Clunkers, watch a presentation by the author

1. Readers will be able to differentiate between what has and what has not worked in economics and public policy throughout history. I explain the effects of the Great Depression and how it relates to our financial crisis today.
2. Understand that protectionism hurts everyone. It creates shortages and increases prices. Historically, when then goods can’t cross borders armies will. Free trade means peace: you don’t wage war on your customers.
3. No nation has ever turned to the printing press with desired results.
4. The two biggest expenses for business are payroll and taxes. If the government raises taxes – then businesses will cut their payroll.
5. Health care, tariffs, Cap and Trade and  increased taxes is the recipe for a jobless recovery; just like the Great Depression. The New Deal failed, this book proves it.

Take the “promise” of 3 million jobs created and divide it into $787 billion… that equals $262,000 per job! Does that make sense?

In April 2008, the Bush Administration attempted to stimulate the economy with their own $150 billion  plan – a strategy that resulted in no additional jobs created, a higher national debt and a weaker currency.

The Obama Administration’s  $787 billion stimulus package is evidence that the government thinks more is better. Educate your Members of Congress and Senators that repeating the same behavior will not result in a different outcome.