"Imposing tariffs for the sake of addressing a trade imbalance will not resolve the underlying cause, which is typically a loss of competitiveness in the entire industry or in specific goods."
The problem with this type of anti-tariff argument is that it ignores second-order effects. A good produced more efficiently elsewhere may cost less than producing that good here. If my job is exported to produce that good, however, I have no money to buy that less-expensive, more-efficiently-produced good. Both sides lose: the manufacturer of the good and me.
A $100 manufacture that I cannot buy because my job was offshored is of less value to me and the community than a $125 manufacture made in my community that I can buy with wages from my onshore job. The manufacture of that good provides a paycheck and ability to pay for groceries and a mortgage, which allows grocery and banking jobs as it acts as a multiplier.
If we want a first-world country, we must pay first-world wages. If we must tariff incoming good to provide those first-world wages to our communities - enabling jobs, family formation, education, infrastructure… then tariffs are the right answer. Looking at tariffs only as a cost is to ignore the jobs and society we must have to ensure our own future - rather than just a cheaper good we can’t afford and that siphons income out of our family, community, country.
I agree. Besides contemplating what will bring us the most efficient production, we must also consider the costs and benefits to the individual. It is a basic tenet of the American dream that you work for what you get. Importing can have economic benefits, based on pure math, but what is the cost to the individual in terms of a fulfilling life.
I keep reminding people, money is not real. It's in our imaginations. In economic policy, the money should be the least of our concerns. OK, it should be second or third tier. But definitely not top tier.
China doesn't sell us cheap goods produced under shocking conditions for most of their workers to be kind to us, the policy has been economic war for decades and we've swallowed it hook, line and sinker. Amazon etc are simply helping China in the wealth/skills transfer from West to East. There is only one eventual outcome.
One of the underlying problems is the global economy is not a free market. It is distorted through the IMF and other trade organizations which place policies imperfectly and distribute capital unequally. These imbalances force all participants to react according to the side of the imbalance they fall on.
When have market dynamics EVER prevented cost increases from being passed onto the consumer? Corporations are bound to deliver PROFITS not consumer savings.
And here’s a quick reminder for those who don’t know:
I am not an expert on what tariffs we have in place today - but I am aware of the tariffs we allowed Europe to put on the US Auto industry after WW2 to help them rebuild their economy. Those tariffs still exist today and it puts our US companies at a disadvantage vs. Euro car companies. F and GM sell little to no cars in Europe. However BMW, Audi, ect sell many cars in the US because we do not charge the same tariffs. This is an example of tariffs were in attempt to help a region rebuild, however the tariffs should have expired decades ago.
Also if US companies are going to lay off US workers to move the jobs to Mexico or Asia to pay slave wages - I think we should tariff those goods too. Our country is losing out on the tax revenue from those US employees and should be recouped so we can eventually lower our US tax burden / person. ALTHOUGH we need DOGE to control the spending first, so taxes can be lowered in a fiscally responsible way.
OR there's a huge labor cost arbitrage to be exploited, which the tarrifs balance out. this is just Ricardo competitive advantage bullshit...someone always has to lose in that scenario, or you can refuse to play the bs game and just make it at home with stable currency.
Trump’s tariff policy will lead to economic disaster. The world is more interconnected now than at the time of Smoot Hawley and we all know what a wonderful and prosperity bringing policy Smoot Hawley was. Economic disaster would be the “best case” scenario”. Tariffs breed resentment, inflame antagonisms between nations, and invite retaliatory tariffs. It was what made Hitler’s conquest of lebensraum seem like a logical way out of Germany’s economic dilemma. Inflationism, tariffs, and insolent threats are not a prescription to MAGA, rather they are prescription for impoverishment and possibly war.
IMO, ideologies are part of the problem. They do not help us understand or address our world. They just provide the illusion of doing so.
Openness to ideas and doing what works are key. What works is always contextually defined. We cannot assume or reason our way to the correct course of action based on the premises of a theory.
That seems to me to be the primary lesson that should have been taken from the 20th century.
(All that said, in Trump's case, tariffs are more negotiating and leverage tools than economic solutions. We have had a lot of the world free-riding on our backs for a long, long time. I used to think people were crazy when they said things like "our ruling class hates the US," but now I think it's pretty much obviously true. They hate both the people and the founding documents, b/c both restrain their power and wealth accumulation. So, if the ruling class is trying to make "tariffs" the next boogeyman, then tariffs must be good for us, at least on some level, at this point in time.)
I do agree that most people are self serving, selfish and only love their neighbour if it doesn’t cost them anything. My thought for the day. Dear Raven person you could spend the rest of your years writing about the topic in your latest post.
The problem with this type of anti-tariff argument is that it ignores second-order effects. A good produced more efficiently elsewhere may cost less than producing that good here. If my job is exported to produce that good, however, I have no money to buy that less-expensive, more-efficiently-produced good. Both sides lose: the manufacturer of the good and me.
A $100 manufacture that I cannot buy because my job was offshored is of less value to me and the community than a $125 manufacture made in my community that I can buy with wages from my onshore job. The manufacture of that good provides a paycheck and ability to pay for groceries and a mortgage, which allows grocery and banking jobs as it acts as a multiplier.
If we want a first-world country, we must pay first-world wages. If we must tariff incoming good to provide those first-world wages to our communities - enabling jobs, family formation, education, infrastructure… then tariffs are the right answer. Looking at tariffs only as a cost is to ignore the jobs and society we must have to ensure our own future - rather than just a cheaper good we can’t afford and that siphons income out of our family, community, country.
I agree. Besides contemplating what will bring us the most efficient production, we must also consider the costs and benefits to the individual. It is a basic tenet of the American dream that you work for what you get. Importing can have economic benefits, based on pure math, but what is the cost to the individual in terms of a fulfilling life.
I keep reminding people, money is not real. It's in our imaginations. In economic policy, the money should be the least of our concerns. OK, it should be second or third tier. But definitely not top tier.
China doesn't sell us cheap goods produced under shocking conditions for most of their workers to be kind to us, the policy has been economic war for decades and we've swallowed it hook, line and sinker. Amazon etc are simply helping China in the wealth/skills transfer from West to East. There is only one eventual outcome.
One of the underlying problems is the global economy is not a free market. It is distorted through the IMF and other trade organizations which place policies imperfectly and distribute capital unequally. These imbalances force all participants to react according to the side of the imbalance they fall on.
When have market dynamics EVER prevented cost increases from being passed onto the consumer? Corporations are bound to deliver PROFITS not consumer savings.
And here’s a quick reminder for those who don’t know:
Austrian economist: Murray Rothbard embraced
kkk grand wizard: David duke
and
fascist drunk: Joe McCarthy
As models for political strategy
When totalitarianism and slave labour is the competitive advantage..
I am not an expert on what tariffs we have in place today - but I am aware of the tariffs we allowed Europe to put on the US Auto industry after WW2 to help them rebuild their economy. Those tariffs still exist today and it puts our US companies at a disadvantage vs. Euro car companies. F and GM sell little to no cars in Europe. However BMW, Audi, ect sell many cars in the US because we do not charge the same tariffs. This is an example of tariffs were in attempt to help a region rebuild, however the tariffs should have expired decades ago.
Also if US companies are going to lay off US workers to move the jobs to Mexico or Asia to pay slave wages - I think we should tariff those goods too. Our country is losing out on the tax revenue from those US employees and should be recouped so we can eventually lower our US tax burden / person. ALTHOUGH we need DOGE to control the spending first, so taxes can be lowered in a fiscally responsible way.
OR there's a huge labor cost arbitrage to be exploited, which the tarrifs balance out. this is just Ricardo competitive advantage bullshit...someone always has to lose in that scenario, or you can refuse to play the bs game and just make it at home with stable currency.
Trump’s tariff policy will lead to economic disaster. The world is more interconnected now than at the time of Smoot Hawley and we all know what a wonderful and prosperity bringing policy Smoot Hawley was. Economic disaster would be the “best case” scenario”. Tariffs breed resentment, inflame antagonisms between nations, and invite retaliatory tariffs. It was what made Hitler’s conquest of lebensraum seem like a logical way out of Germany’s economic dilemma. Inflationism, tariffs, and insolent threats are not a prescription to MAGA, rather they are prescription for impoverishment and possibly war.
Trump and the crazies ran a ticket ran on removing intervention. You voted for it suck it up
So tariffs appear to be be a contradiction. Is it just Trump playing the strongman?
IMO, ideologies are part of the problem. They do not help us understand or address our world. They just provide the illusion of doing so.
Openness to ideas and doing what works are key. What works is always contextually defined. We cannot assume or reason our way to the correct course of action based on the premises of a theory.
That seems to me to be the primary lesson that should have been taken from the 20th century.
(All that said, in Trump's case, tariffs are more negotiating and leverage tools than economic solutions. We have had a lot of the world free-riding on our backs for a long, long time. I used to think people were crazy when they said things like "our ruling class hates the US," but now I think it's pretty much obviously true. They hate both the people and the founding documents, b/c both restrain their power and wealth accumulation. So, if the ruling class is trying to make "tariffs" the next boogeyman, then tariffs must be good for us, at least on some level, at this point in time.)
If you’re listening to the “Austrian perspective” and find it engaging please DM me because I have a bridge for sale at a very reasonable price.
Excellent....thank you.
I was looking for a book I read in the 70’s when I was supposed to be studying some boring bankers exam books (I left my grandfather hated the bank and my manager died of a heart attack) and found this https://duckduckgo.com/?q=economics+book+1970%27s+tarrifs+ineffiecient&t=opera&ia=web
There is a lot more to that Austrian bunch than tariffs however https://mises.org/podcasts/aerc-2024/ayn-rand-and-austrian-economists
I do agree that most people are self serving, selfish and only love their neighbour if it doesn’t cost them anything. My thought for the day. Dear Raven person you could spend the rest of your years writing about the topic in your latest post.