Aluminum foil wraps burritos, physics equipment and the highlighted tresses of hair-salon customers. It forms flexible ducts and lasagna pans, lines cigarette packs and fast-food sandwich wrappers. It hides between layers of film in flexible packaging. It protects aspirin bottles from tampering, petri dishes from light and tractor engines from overheating. It tops yogurt cups and peanut cans. It backs blister packs of antihistamines, antacids and birth-control pills. It goes into automotive parts and air-conditioning systems.
U.S. manufacturers rely on aluminum foil. So do nail salons, building contractors and bakeries.To the Trump administration, however, none of these businesses—or their employees—matter as much as a couple of domestic aluminum makers. Disregarding the ripple effects, the Commerce Department has said it will impose preliminary duties of 97 percent to 162 percent on the Chinese imports that supply much of the U.S. market with thin aluminum foil. That’s likely to have much more far-reaching effects on U.S. companies than the minor deals President Donald Trump announced on his trip to China.
As the Wall Street Journal (paywall) editors said:
Mr. Trump seems not to understand that steel-using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000. Transportation industries, including aircraft and autos, account for about 40% of domestic steel consumption, followed by packaging with 20% and building construction with 15%. All will have to pay higher prices, making them less competitive globally and in the U.S.
And the national security argument trotted out to support such tariffs is given suitably short shrift by the WSJ:
The national security threat from foreign steel is preposterous because China supplies only 2.2% of U.S. imports and Russia 8.7%. But the tariffs will whack that menace to world peace known as Canada, which supplies 16%. South Korea, which Mr. Trump needs for his strategy against North Korea, supplies 10%, Brazil 13% and Mexico 9%.
On just about all conceivable grounds, the tariffs are stupid.
Last year, reflecting on a few of Trump’s acts, such as deregulation moves, the tax cuts, Supreme Court picks, crushing of the Paris AGW accord and the Jerusalem embassy decision, I felt that, while Trump had said a lot of foolish things, maybe he was turning out to be a pretty good POTUS after all. The protectionism, however, remains a major blot on his record.
Ross Clark at the UK’s Spectator, meanwhile, makes an interesting observation of how all this plays to the case for Brexit.
Disingenuous WSJ quote (if I’m being charitable.) Most of the steel supplied through Canada to the USA comes from China. China has been shipping lots of steel through Canada as a workaround to NAFTA – one of the other arms of this mess that Trump is addressing.
I suspect (but don’t know) that this is a temporary measure aiming to slow down the Chinese metal while NAFTA is being discussed. I also suspect that the tariffs disappear once we’re either out of NAFTA, or NAFTA is rewritten.
Having compared what Trump does to what people say Trump should do for the last 12 months, I’m going to go with Trump on this one. He’s been shown to know exactly what he is doing and why, while the critics are 3 steps behind and wrong every time.
The EU imposes import duties on steel.
So it must be a good idea.
I read that WSJ article yesterday expecting a well-informed and fair criticism, and was sorely disappointed. I further began to suspect that I was wasting my time when I got to the ‘Mr. Trump seems not to understand…’ part, something that over the past year has again and again been proven to me to indicate just such a waste of time. One may disagree with Trump’s policies for all kinds of reasons, many of which may be legitimate and valid, but positing lack of understanding as one of them strikes me as, well, lacking in understanding.
More to the point, tariffs are mere tools, and as such simply cannot be seen as ‘stupid’ or ‘smart’ – what may be stupid or smart is the purpose of their particular use under specific circumstances. One such classic use is based in mercantilism, which in my opinion is indeed stupid. However, I seriously doubt that Trump subscribes to that particular doctrine (see his alleged stupidity above, YMMV).
Another use of tariffs is as part of a protectionist policy, which is materially different from mercantilism, and this is clearly what Trump is doing here. But despite that currently being the common assumption, note that not everyone who is engaged in a protectionist policy is necessarily a protectionist in the broader sense (see Bobby’s remark about these current measures most likely being temporary). More pointedly, tariffs and other protectionist measures can be used as weapons in a trade war, when they can be paraphrased as ‘diplomacy by other means’. That would seem to lead to the question: if tariffs are stupid as weapons in a trade war, are missiles, war planes and bombers stupid as weapons in a “hot” war? Well, I guess sometimes they are, and sometimes they are not.
I would have expected the WSJ editorial board to at least make a reference to this discussion, specifically Wilbur Ross’ remarks, and then explain to their readers why they disagree with his points – but, see my disappointment above.
The Chicoms do not practice free trade. Let them suggest that all trade barriers be dropped by all sides and free trade prevail.
Don’t hold your breath.
No— tariffs are not a good idea. But Trump more or less promised his base and he is sorta keeping that promise even tho’ it is a poor idea.
His really dumb move was his “gun taking” remark –which IS stupid and could cost him in mid-terms. He should have the gumption to know–unlike the FFC –that there is no way to get your enemies to vote for you regardless of cowardly concessions. The remark was likely hot air but it gives pause for thought. 4D chess it wasn’t. Unless he’d was trying to boost gun/ammo sales.
That was my thought too! 😀
But yes, that one did raise my eyebrow as well – we’ll see though.
The Economist magazine (and the rest of the establishment elite) has been saying that the American steel and aluminium industries do not matter – indeed that the “current account deficit” (i.e. borrowing hundreds of billions of Dollars a year to fund imports) “does not matter”. If the establishment elite were coming out with sensible ideas for dealing with the these very serious problems (for example getting rid of the pro union laws that have undermined the American steel industry – and the “Anti Trust” laws that crippled the American aluminium industry) that would be good – but instead the establishment elite just says “it does not matter”.
For normal human beings (as opposed to the “liberal” elite) it is obvious that these industries matter, they matter a great deal indeed. And it is also obvious (for non members of the establishment elite) that borrowing hundreds of billions of Dollars a year to fund imports is awful (terrible). President Trump’s taxes on imports are NOT the right answer – but at least he “understands” that there is a problem, whereas it is the establishment elite that does NOT “understand”. The “liberal” elite pretend there is no problem at all with the destruction of vital industries and no problem at all with borrowing hundreds of billions of Dollars a year to fund the import of consumption goods.
As far as ordinary human beings are concerned the “liberal” elite are insane – and they are insane. For example, the Economist magazine (and the rest of “liberal” elite) actually hold that “Anti Trust Law” (the thing that crippled the American aluminium industry and other industries – leaving the United States dependent on imports that can NOT be financed in the long term) is a GOOD THING, indeed that there should be MORE “Anti Trust” action.
The United States does not need “competition policy” (indeed such government interventionism has done terrible harm – as has pro union laws and government benefits and “public services” – it needs industry. And so does Britain. Sorry “new order” types – an economy is still about MAKING THINGS.
China does not cripple its own industries with such folly. And China has hundreds of millions of people (who have internally migrated) who do not get much “government benefits” and “public services”. “But Paul that is medieval and satanic, and…….” Actually that is the United States in 1960, when there were no “Food Stamps” and “emergency health care” and all the rest of it – because people had PRODUCTIVE JOBS and could take care of their own families.
Dear “liberal” elite – unless the West returns to the sort of society that America still was in 1960, where people had productive jobs (not endless millions on benefits or working in the bureaucracy – both government and private bureaucracy) and could look after the basic needs of their own families (and help others – via both religious and secular mutual aid and fraternal association) then THERE WILL BE NO WEST.
Your 1960s “liberation” from the family and so on has FAILED. And your economy without MAKINIG THINGS has failed as well.
Unless one is asking a different question.
Aluminum foil, it wraps the heads of myopic economic/ political science pundits to protect them from the radio waves beamed from the satellites of Venezuelan and Moravian bit coin processor farms.
Like most people here, I think Adam Smith got it right, but, also like most commenters so far, I notice some points.
The immense hypocrisy of EU types saying tariffs are wrong, not only while having loads of them but while threatening us (if we don’t pay a large enough fine for brexitting, and maybe even if we do) is loved by the media, but may not fool all.
As for
if correct (but I echo Alisa comment above on that), he would share that with his left-wing critics (to be fair, not with some Republican #nevertrump types). However for some of those left-wingers, whatever degree of incomprehension they have coexists happily with knowing that a government-benefitted group will vote for the benefit, whereas nail salon customers may not notice the very very fractional cost impact of foil’s being tariffed. Trump may know that too, and/or he may, as he did with Nato and defence spending, think the way to negotiate is not to make it plain to the other side you will never lessen your good behaviour whatever they do, and then piously hope that they step up.
Past a certain very limited point, I am well aware this can go very bad. As Milton Friedman IIRC said, “Some argue that because other countries have harmed themselves by imposing tariffs, we should retaliate by doing the same to ourselves.” (Quoted from memory, probably the gist of the sentence rather than exactly accurate.)
However both for better and for worse, Trump thinks like a negotiator, a deal-maker. He has pressured Nato countries to up their defence spending by threatening lesser US support – but has not actually run down the US military. Today we have the spectacle of Trump keeping an undoubted campaign promise to an important element of his base, while simultaneously causing all the usual suspects to discover how wise Adam Smith was on free trade. Like his most loathing (and loathsome) critics, Trump thinks he is clever. If this ends by hurting the Chinese and being a negotiating ploy against the tariffs of others, he may yet be less stupid than the WSJ says. Other less happy outcomes are possible.
Meanwhile, here in the UK, we have Theresa May in charge and Jeremy Corbyn in opposition. You guys have Donald Trump in charge, and dodged Hillary Clinton. I feel for you, but I also find myself hoping that Theresa (aided by Corbyn) will not inflict major trade restrictions on us in exchange for a worthless deal with the EU.
Trump seems to know even better than me, that there is nothing to be gained by appeasement; but my wild guess is that his real motive is more subtle. It will be almost 3 years before Trump stands for re-election, and even then, the NRA ain’t gonna support a Democrat. Meanwhile, it is important to him that the Republicans retain control of Congress; and what better way to help Republicans in Congress, than giving them a chance (forcing them, actually) to take a stand against gun control, and at the same time show that they can stand up to Trump?
I think people have taken Trump’s rather poorly-chosen words out of context.
He was speaking specifically about situations in which there are many signs of mental illness and possible violence in some person. What he said – “due process after the confiscation” – is already the practice in such cases in many, if not most, USA jurisdictions.
We just had such an instance close to me. A 74-year-old man with many guns (including one on his hip wherever he went) had been writing letters to newspapers complaining that the CIA had infiltrated his apartment building in order to spy on him, and promising that he wouldn’t go down easily.
A relative notified the local police, who went with the relative to his apartment, where they took away his guns, and set up a court hearing a week later concerning his competency and safety.
Yes, such a process can be overused and abused, but it strikes me that, when it’s applied reasonably, it’s a valid way to handle threats. Had anyone taken that step when the Florida school shooter was making his written threats to other students, we might have dodged a tragedy.
But the point is, what Trump spoke of is what already happens.
It would indeed be a clever form of propaganda to take advantage of PC exaggerations to announce that you would indeed “do something” about one of their concerns and then “do” what, contrary to their wild claims, was already being done. Difficult for them to expose you. 🙂
Whether or not that is what Trump is doing here, it could be worth watching out for opportunities to do that.
Yet another aluminum war.’Seems a reoccurring theme. Being light and strong and relatively impervious to corrosion, aluminum has a lot of material value. Foil for pill packets is a fairly silly choice for ominous example.
It’s said that one shouldn’t talk about sex, politics and/or religion in polite company. Yet, IMO only one of the three, sex, doesn’t, to borrow a phrase, “poison everything”. In order for President Trump’s plans to have any real effect, he’s relying on other nations to make the same mistake he’s making, to saturate a nation’s economic policy with politics. That’s not exactly a stretch though, as all nations do that in spades. I’m in agreement with the late Ayn Rand, there should be a separation of economics and state.
I for one enjoy Trump Intemperate Tweets. (One could jokingly say, “incontinence” as a double entendre.) But his skill as a statesman is still somewhat hit and miss. And yes, I understand that he has to deal with human irrationality and inconsistency. For example, we as a nation NEED to curb national spending and most are in favor of that notion, but when it comes to cutting specific programs, EVERYONE balks, and, alas, the Trump machine is fueled by populism, so don’t expect any significant cuts anytime soon.
That’s PRESIDENT Trump, duly elected.
Realize that there is what Trump says and then there is what Trump does. Machiavellian, yes but there you go. He’s had the “press” and politicians on both sides chasing their tails for two years.
It’s best to think of what he says as neither right or wrong, but rather a means to an end.
Neo: And she knows what, everything?
Morpheus: She would say she knows enough.
Neo: And she’s never wrong?
Morpheus: Try not to think of it in terms of right and wrong. She is a guide. She can help you to find the path.
And in regards to tariffs, keep in mind that the president has an undergraduate degree from Wharton in economics, so he should be even more aware of this than you or I.
“Parkland” was a staged false flag rehersed beforehand, with the intent to whip up Leftist ire against “military grade assault-weapons” (which the AR-15 is not, as it’s not full auto), with the end-game purpose of motivating republican voters for the mid-term elections so as to “save our guns”, orchestrated, of course, by our Lizard-People overlord Xenu.
Sorry, I was channeling Alex Jones for a moment. I’ll go back to worrying about the frogs turning gay.
Donald J. Trump
Verified account @realDonaldTrump
15m15 minutes ago
If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!
President Trump has his say.
BTW, in regard to guns, it would require 2/3 of the states to vote to eliminate the second amendment, and that’ll never happen. ‘Much to do about nothing.
Juncker is now threatening tariffs on Harley Davidsons, blue jeans and bourbon. I haven’t heard this kind of exchange since Dumb and Dumber.
“Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce, are founded. ” Adam Smith “Wealth of Nations.” 1776.
Thailover, it requires 5 votes on the supreme court to eliminate the 2nd amendment. Everyone will know it’s bullshit but gun owners would become felons overnight. It’s hard to fight back when the entire system is now arrayed against you.
“Juncker is now threatening tariffs on Harley Davidsons{Paul Ryan), blue jeans(Diane Fienstein) and bourbon(Mitch McConnel).”
Also who elected Juncker?
I am not convinced yet by what I take to be the premise of this post, as there are no figures to indicate if US exporters are facing higher tariff barriers than Rest of the World or parts of it in selling to the US. Mr Trump appears to be hinting that EU-made cars ‘flood’ into the US on lower tariffs than US-made cars into the EU. I tend to think that this is true since no one provides any figures for the context of these discussions and Lefties and liars hate the truth like nothing else.
If so, then it is quite simple, the Trade War is already underway (as tariffs are in place) and Mr Trump has noticed that the US is at a disadvantage for its manufacturers. He has fired a few warning shots about it, and the EU is getting all huffy as they are being called out, and are lamenting that they are being ‘forced’ to further escalate the war that they currently have rigged against the US, ignoring that they are a major cause of it. Amirite?
One Chinese businessman – Liu Zhongtian – has apparently shipped to and secretly stored in Mexico over one million tons – or about 6% of the world supply – of aluminum. (Here or here.) He supposedly uses it in his wholly-owned Mexican manufacturing facilities to make structural shapes, and through that process disguises the Chinese origins of the metal, and gets to sell it in the US at the very favorable NAFTA/Mexican rates.
It is unknown how many Chinese are doing the same thing through Mexico and Canada, but much of the metal that comes to the USA through NAFTA is of Chinese origin, with added Mexican or Canadian processes sufficient to “transform” it to a NAFTA product.
If you’ve read about NAFTA recently, you know about the “fatal flaw” that many insist will cause the end of NAFTA. This is part of that fatal flaw. So long as Mexico or Canada joins into other alliances, the inter-relationship between those alliances and NAFTA allows members of those alliances access to the USA NAFTA market without opening those same origin markets to the USA. It’s a fatal flaw in that it makes NAFTA unsupportable for the USA. It opens our markets to countries but denies us those countries’ markets.
That 6% of the world’s supply is a lot of aluminum, enough to greatly disrupt one of our so-called strategic markets if it were fed in at the wrong times and speeds. It also represents high lost opportunity costs for our companies who fail to realize the profits they could make in China if these phantom Chinese metal imports were properly accounted for under our current agreements and they were able to make countervailing trades. Its secrecy itself is worrisome.
Trump’s sudden tariff announcement caught everyone by surprise. It makes more sense (maybe) if you view it as one of many chess (or checker) moves in the ongoing NAFTA fade.
Of course, it could just be one more fevered conspiracy dream.
Mr. Ed, youarite under the presumption that those unknown figures are as implied by Trump and co., a presumption I have not seen refuted. ‘Indeed’ as to the rest of your comment.
I read a whole lot of excuses for Donald Trump’s latest stupid move. And yes, tariffs are always and everywhere stupid; you are making it more expensive for your own people to get what they want or need in order to do business and prosper. That’s what he gets for listening to his fuckwit Commerce Secretary, Wilbur Ross. Ross is heavily invested in US steel production, and is feathering his own nest at the expense of the American people. Were I made US President tomorrow, his ass would be the second one fired. Jeff Sessions would be first.
And for those complaining that Trump is just redressing unfair trade practices, or complaining that the EU and China are threatening retaliation? Well, WTO rules already allow for any member to impose retaliatory tariffs to compensate for tariffs imposed by another state. And those tariffs can be against other goods that match the value of the original tariff.
So, if there are states imposing tariffs not compensated for by existing US tariffs? Simply declare tariffs under WTO rules against the goods most important to exports from the miscreant. That’s exactly what the EU and China are talking about doing; and will do unless the Donald grows a brain and scraps these stupid steel and aluminium tariffs.
Trade War is exactly like Global Thermonuclear War. The only winning move is not to play.
The EU’s tariff website seems pretty hopeless and unreliable in that data cannot be retrieved from it in a form that gives confidence that it is answering the question asked, but it did hint at a 10% tariff on finished motor vehicles imported into the EU from the US (and on that you pay VAT, usually between 20% and 23%). An old (2012) UK government document supports the 10% figure. The US Department of Commerce appears to support this 10% figure that the EU imposes (see page 74).
The US tariff on finished cars from the EU, as far as I can tell from this rather incomprehensible site (downloads as pdf. lists) is either 2.5% or 10%, and if the latter, then the tariffs are the same either way between the EU and the US.
I can’t be bothered to dig any further.
According to Brietbart:
What amused me was that when Junker threatened to impose extra tariffs on the hundreds of motorbikes, thousands of pairs of jeans and tens of thousands of bottles of bourbon the EU imports from America, Trump immediately threatened to impose extra tariffs on the hundreds of thousands of beemers, mercs, VWs, Audis and all the rest of the cars the EU exports to the US.
Since there is no such thing as free trade anywhere on the planet, the wailing about tariffs is also quite amusing. Any arrangement like NAFTA for instance is an agreement to trade freely provided… [insert long list of conditions here] and the free trade within the EU amounts to something like “Sure, you can trade your widgets anywhere in the EU provided the twiddly bit is here and the shiny bit is there and … etc. etc.”
The argument that tariffs hurt the importer more than the exporter is certainly true in an ideal world, but this world is very far from ideal.
Indeed. It is true however that tariffs do hurt the importer, whether one compares the extent of that hurt to that of the exporters is a separate matter. But that being said, one must also keep in mind the importance of the time period during which the tariffs are in effect, which is in direct proportion to the extent of hurt – and this is where Bobby’s point about this measure being temporary and part of a negotiation tactic* comes into play.
*And whoever mentioned ‘conspiracies’, please: this is elementary, as must be obvious to anyone who’s ever engaged in or even observed any kind of negotiation. One must always carry a big stick and be prepared to use it, whether one is prone to speaking softly or harshly.
One of the joys of the Trump era is watching the crazy take hold of my fellow educated folk….
President Trump is way ahead of all us college-educated whiz kids – although he attended Wharton, he comes off as the first non-college-educated president since the 1970s.
This is one stick. There will also be carrots.
Many carrots, many sticks.
There have already been many Twitter feints – which sent the “educated” folks a-fainting.
There will be things said for Chinese ears, and things said for European “allies” to hear.
He is engaged in “hard-nosed negotiation”, and he’s been doing it all his life on a scale that makes whatever “departmental politics” we “clever” people have ever played look like tiddly-winks.
President Trump is way ahead of all us college-educated whiz kids.
I know it galls some of you – and he’s so Murican, too!!! – but it is true. This snobbery has driven the media round the bend. Take care it doesn’t warp your thinking, too.
Of course Ben, I will learn from the wise master. I now see the error of my ways.
There, fixed.
Perry, your snark is noted, but to be fair Ben makes a good point. (This also relates to “Mr. Trump seems not to understand . . . “)
Trump has made a career (and especially a political career) out of people underestimating him. That’s how he got into the White House. I cannot believe that a man with a degree in economics from one of the nation’s preeminent business schools was not exposed to Adam Smith and the voluminous economic writings, dating back over two centuries, utterly refuting the merits of protectionism. Even if he had somehow managed to forget it, the point has been thrown in his face so much since he began his presidential campaign that he would surely have recalled all those long-ago lectures. And yet he campaigned (in part) on protectionism and is now governing on it as well. Something deeper is going on.
It could be, as Ben suggests, merely a negotiating ploy. That’s not a bad strategy. It could also be a more straightforward political calculation that the few hundred thousand jobs saved in the steel and aluminum industries greatly outweigh (in terms of votes) the minuscule second-order price effects upon millions of consumers, coupled with the fact that few people really understand the economics of the issue anyway. It is tempting to assert that this is merely one more illustration of Bastiat’s “that which is seen and that which is not seen”, but I don’t believe Trump is really that shallow (although undoubtedly the vast majority of the public is). Perhaps it’s a combination of both, or some other, even deeper, strategy. My money is on the political calculus interpretation (perhaps with a dash of negotiating ploy thrown in), but time will tell.
Perry – the analogy I offer the skeptitrumpical is the Eisenhower presidency.
One feature of WWII that has been mentioned in threads here is the persistence of support for socialism before, during, and after the war. There was not nearly the clarity we have, now that the arc of the Cold War is basically concluded.
It was providential that we had a non-politician like Eisenhower to guide America and the West into the postwar era. It would have been very very easy to “lose the peace”.
Eisenhower:
-Was the first president elected based on TV spots and media charisma, which (in addition to his heroic record) let him bypass entrenched political machines
-Graciously handled America’s transition to superpower.
-Cut through a lot of pretense, misinformation, and dithering to make the tough but commonsense decisions required in the Cold War and its arms race (and the uncovering of the historical record in our times shows just how pathetically off the chattering classes were about Russian intentions)
-Actually implemented the racial integration of the US armed forces, which was signed into law by his predecessor. He also handled the first wave of opposition to school integration in a way that minimized violence and built consensus(we also now know that the Soviets were attempting to use the race issue to foment revolution).
His charismatic connection to the “little people” and his practical commonsense stood him in good stead at a time when many of the elites were still somewhat clueless about socialism and Soviet intentions.
Does any of this sound familiar?
Oh, yes, one more bit – Eisenhower was and is still dismissed by the educated elites. “The Eisenhower Era” is scorned by college academics, journalists, and filmmakers as a time of complacent, conformant naivete…. despite the fact that:
– For many folk, it was a nice life. That’s all that many Trump voters want back.
– In fact most of the social and political sea-changes of the last 5 decades have their roots in the 50s. And Eisenhower called a lot of them much more accurately than his “betters”.
“Aluminum foil wraps burritos, physics equipment and the highlighted tresses of hair-salon customers.”
Well, yes. But so what?
Alcoa, a US smelter and manufacturer of Aluminum can supply US demand for burrito wraps, it’s physics equipment and hair salon highlighted tresses. If demand goes up for domestic manufactured aluminum because of US tariffs of imported Aluminum, that means Alcoa will need to ramp production – take on more American workers, or increase production to take up spare capacity.
China, after all, should be able, now that Alcoa has set up their domestic smelters, to supply its own domestic requirements for Aluminum.
Jonathan Pearce: “The protectionism, however, remains a major blot on his record. ”
If POTUS doesn’t protect US industry against Chinese slave labour, or give US industry an opportunity to re-tool ( Alcoa has just finished building a brand new Smelting plant in China ) then he would be foolish.
Fortunately, it looks like he isn’t.
2 facts.
1. Free trade creates more wealth for everyone in general over the long run.
The American people do not care about the long run, though. See, for one example, the $20 trillion of debt Americans have voted to spend/print by borrowing $20 trillion from unborn generations of Americans who have had no vote in the matter but will need to repay that $ through bloodshed or immense labor.
2. So in the short term, what matters more: a few hundred thousand jobs or minuscule price increases on goods and products that most people either A) will not notice the minuscule price increases or B) if they do notice the price increases they probably get most of their housing, healthcare, food and education paid for by the government anyway?
So on the one hand 100,000/200,000/300,000 Dads will go to work every day instead of joining the ranks of middle America dads who pass the day by snorting heroin or soup cans can be 5 pennies cheaper. Libertarian long-term wealth efficiency vs having employed fathers, more intact families, stronger American communities, and more stable & orderly culture to raise the next generation. Hm. tough one. What would Rothbard say? Oh yeah, I don’t give a shit what he says. What would Dostoevky’s Grand Inquisitor say?
Shlomo Maistre: “Free trade creates more wealth for everyone in general over the long run.”
Define ‘long term’.
Shlomo Maistre: “The American people do not care about the long run, though. ”
If it were explained to them what ‘the long term’ meant, they would have the opportunity to make a reasoned and informed decision. But long term has turned out to be not a year, or even five years, but thirty years – which is essentially, a life time. The free marketeers need to make the case why some intangible benefit for Chinese workers thirty or fifty years into the future, is worth the immediate destruction of their American family friends and communities.
Shlomo has a point that a country with a debt the size of the US isn’t giving strong evidence of thinking for the long-term, but often it is a complex question about what the public want versus the political system’s ability to respond to or to stifle that want.
Here in the UK in 2010, after the Gordon Brown blowout at the end of the Labour years, a healthy majority of the electorate voted for parties who made major manifesto commitments to reduce the debt, and those parties then formed a coalition government – but the debt was not reduced.
What ‘free trade’? Where, on the moon?
Don’t worry about the tariffs from the NYTimes
Oh dear, you need to go take a trip to Shenzhen. Please please don’t make me defend kinda-sorta-communist China circa 2018
“Oh dear, you need to go take a trip to Shenzhen.”
I am not suggesting there isn’t an affluent class in China. Good luck to the Chinese, they deserve a break after the cultural revolution. Their poverty was mostly of the self inflicted sort so, their break shouldn’t come at the expense of the US working/middle class.
“Oh dear, you need to go take a trip to Shenzhen.”
China is big. Shenzhen is just one place in China.
I read somewhere that while about half the population in China has advanced enormously and live in lower-middle class levels (or better), the other half, mostly in rural areas, is still dirt-poor. There is a lot of low wage labor to be found in China, too. And in Shenzhen too.
About tariffs: I tend to think that it is bad policy, but I’m not too sure. My thinking is based on general, philosophical principles, and not on detailed knowledge of the particular state of things. Sometimes general principles need to be adjusted to particular situations…
So, it’s possible that Trump errs. Well, God never errs, but the president is not God, he is a mere mortal. I wish I had 10 dollars for every dumb error a president or any government ever did.
And then one needs to consider the size, or the amount of damage done… Not every error is an end-of-the-world catastrophe….
Constitutional conservatives, libertarians, Constitutionalists, and Tea Partiers (Think tanks, politicians, media outlets, lawyers, scholars, accountants, professors) have been explaining to the American people that it’s not a good idea to print trillions of dollars out of thin air for GENERATIONS. There are minor temporary setbacks but the trend is clear: regulations keep getting more complex and unpredictable, taxes keep staying high, spending keeps rising, and the debt keeps going up up up up and up.
Please, tell me, how is YOUR explanation going to convince the American people to “make a reasoned and informed decision” after so, so many people have done their own explaining of what the long-term is and failed so miserably?
Now, I could say that Americans don’t listen to your facts nearly as much as they listen to emotion, which is true. But that’s not even necessary because 98% of the people reading what you or I write agree with us (on government spending , taxes, printing $20 trillion in debt out of thin air, not monarchy) anyway. When CNN has someone like you on TV, they are excellent at making him appear just mildly unhinged by asking just the right emotionally tinged questions. Nobody cares about your facts, people care about emotion.
Where are the examples in history of a universal franchise democracy finding itself in MASSIVE debt for generation after generation, hugely complex and unpredictable regulatory regime, and high taxes and responding to this by voting for leaders to massively cut spending, eradicate institutionalized money printing, eliminate huge welfare programs, shrink the size of the military dramatically, and lower taxes to become a stable, prosperous nation again?
Just the latest example of the failure of the Right Wing to achieve anything of lasting consequence in modern democratic society.
Oh actually, that was in 2010 so I’m sure there has been something even more recent.
You know, like, for example Trump &GOP failing to repeal Obamacare in full as they had promised for years to do. Or the fact that the debt keeps going up up up up up in almost every single western country since 2010 such as in America, UK, etc.
The idea that we just need to explain to the people how Austrian economics works so they will support free trade/balanced budgets/lower spending/less regulation/no more printing dollars out of thin air/permanently less spending is not simply a bit off-base, it’s a laughable, ridiculous, insane suggestion. We’ve been trying that for GENERATIONS. It. Does. Not. Work.
Repeat after me: it. does. not. work.
Exactly correct.
Indeed, truly huge amounts of it, almost unimaginably huge, like most things in China these days. The port facilities of the Pearl River delta have to be seen to be believed. I was reacting to this corker: “If POTUS doesn’t protect US industry against Chinese slave labour…”
People in China want factory jobs, no need to enslave them, they pay well by Chinese standards (which is not that well by US standards circa 2018), but that doesn’t make them ‘slave labour’. Rural China is dirt poor, much like rural UK or rural USA were dirt poor during the Industrial Revolution. This is China’s Industrial Revolution.
And that is why it is easy to get people to work in Chinese factories, same reason it was easy to get people to work in UK or US factories in the 1890s or 1920s. For poor rural people, it is a better life & that is where China’s competitive advantage lies at the moment. That is the economic battlefield on which it would be most unwise to try and fight them.
What the public wants is for the debt to be even bigger than it is. Prove me wrong.
Know how I will be proven correct? The public debt is going to get bigger every year in the future until USD is no longer the reserve currency of the world.
Now, to make this prediction am I an oracle or am I using a modicum of common sense?
Well, I am something of an oracle, to be fair. But in this case, all I’m doing is using a little thing called common sense. History will prove me correct.
I agree. For every person the US has who wants to work in steel/aluminum, China probably has 20 or 30 people eager to do the same work. And most of those 20 Chinese guys could probably be hired for about the same per hour money as that 1 American. Who’s going to produce more steel/aluminum per $10 of labor costs – 15 Chinese guys or 1 American guy?
(Now, my numbers I’m sure are not 100% precisely correct but roughly speaking my numbers indicate the general reality that is true)
So, Trump may be trying to do something that seems completely impossible or he may be trying to win an election. Hm.
George Bernard Shaw: “People in Russia want factory jobs, no need to enslave them, they pay well by Russian standards … ”
Enough said.
Pursuant to my point above about the tariffs being temporary negotiating tactics in the NAFTA fight, “Trump says tariffs will come off if new NAFTA deal is signed.”
Or one additional Justice to say that the 2nd Amendment doesn’t say what it says.
https://www.nytimes.com/2018/03/04/world/europe/europe-china-xi-trump-trade.html
Following Alisa’s link, one can go on to read a piece by Mary Gallagher in the NYT: “Does a Stronger Xi Mean a Weaker Chinese Communist Party?” (It is not a particularly soothing column for those who would like to believe that all is now liberal (≠ “librul”) and light-filled in the New Improved Non-Maoist China.)
https://www.nytimes.com/2018/03/02/opinion/xi-jinping-china.html?action=click&contentCollection=Europe&module=RelatedCoverage®ion=EndOfArticle&pgtype=article
And if one is not yet sufficiently depressed, one can go from there to a short piece from Germany’s Mercator Institute for China Studies:
https://www.merics.org/en/polsys/law-digest/CCP-influence-in-foreign-companies