Why Not Move Embassy To Jerusalem?

Donald Trump, disappointgly but not surprisingly, seems to partially backtracking from the pro-Israel stance he had during the election campaign.

Leaving, for the moment, aside the issue of how it can be justified that Jews are ethnically discriminated against regarded housing construction in East Jerusalem and the so-called “West Bank”, it is unjustifiable that Trump violates his election pledge to move the U.S. empassy from Tel Aviv to Israel’s real, de facto, capital during the last 7 decades.

What is puzzling is why this hasn’t happened already. For nearly 7 decades Jerusalem has been the de facto capital of Israel. Tel Aviv has never been Israel’s capital. Yet nearly all countries, including the United States, keep having their embassies in Tel Aviv.

It would be partly understandable if this was about moving it to the “disputed” Eastern parts of Jerusalem. But there’s plenty of parts in Western Jerusalem where it could be used. And the understanding has been that any “two part solution” would mean a partition of Jerusalem where the Western parts would remain Israeli. So why object to an embassy in Western Jerusalem?

The only possible reason is opposition to Israel itself (or pandering to those that oppose Israel’s very existence).

Who Would Pay The Wall With Tariffs?

Lately, headlines has been dominated by issues relating to fake outrage about the Trump administration doing for 3 months to certain Muslim countries what they are doing permanently to Israelis (and non-Israelis who has visited Israel).

As the absurdity and hypocricy of this is so obvious I’m not going to elaborate on that issue. Instead I will focus on one issue were you really should be critical of Trump: trade.

One of the recurring campaign slogan from Trump was “We’re gonna build a wall, and Mexico is gonna pay for it”.

Mexico, who thinks that the wall would be a very bad thing even if they don’t pay for it, has said that there is no way they’re gonna pay for it. When asked then, how he’s gonna make Mexico pay for it, Trump and his officials have suggested a 20% tariff on imported Mexican goods.

To that some free traders have suggested that this would only hurt American consumers, not Mexican producers, and so it would be the American consumers that would pay for the wall.

Actually, they’re both partly right and both partly wrong.

When you have a tax wedge between what the seller gains and the buyer pays, it will almost always lead to a lower price for the seller and a higher price for the buyer. To what extent the seller and the buyer is hurt depends on the specific market conditions and price sensitivity.

As I haven’t done any empirical research on the subject, I can’t tell you to what extent tariffs would lower seller’s prices or raise buyer’s prices. But sound economic theory tells us it would be a combination.

Meaning that both Mexico and the United States would suffer, or in other words “pay for the wall”.