We always talk about “preparing for the worst”, but there’s an equally-compelling reason to prepare for the opposite. Here’s a good example of this.
I see that POTUS has increased the logging quota on federal lands by 25%, to the consternation of the Usual Idiots. Ignoring their wails (which is good advice anyway), his reasoning is sound:
The new order serves two purposes. One is to control fires. President Donald Trump said in January that the Los Angeles wildfires were partly caused by California Gov. Gavin Newsom’s refusal to clear brush and dead trees.
The other purpose, though unstated, is likely to increase the supply of lumber and head off potential price increases due to tariffs on Canadian lumber, which could have a cascading effect on the American construction industry.
The second reason is actually the better one. Of course we should not allow ourselves to be held hostage by the Canucks over timber — and in any event, the more self-sufficient a nation is, the better — but the very last sentence is equally telling.
You see, with Treasury yields falling (meaning that U.S. debt is being bought out — a Good Thing), what will follow the drop in yields is a drop in interest rates, which means that housing will become more affordable. And the construction industry cannot afford to be choked of its timber supply if building costs are to be contained.
As it is, construction companies face potentially higher labor costs because all the cheap (illegal, lest we forget) laborers are being deported — meaning more citizens working ergo more taxes being paid as opposed to untaxed dollars just being sent south of the border — so if the builders get cheaper and more-plentiful timber supplies, everyone wins.
I don’t see too many downsides to this — it’s a “two (actually three) birds with one stone” scenario — but this is after all a fairly superficial overview because I don’t claim too much expertise in this area to dig more. Am I missing something?
