Patterico's Pontifications

12/2/2016

Incoming Trump-Pence Administration: The Free Market Has Failed

Filed under: General — Patterico @ 10:00 am



The new official line of the incoming Trump-Pence administration is that the free market has failed, and we need their government-imposed solutions instead:

On Thursday, as he toured the factory floor here to take credit for saving roughly half of the 2,000 jobs Indiana stood to lose, Mr. Trump sent a message to other businesses as well that he intended to follow through on his pledges to impose stiff tariffs on imports from companies that move production overseas and ship their products back to the United States.

“This is the way it’s going to be,” Mr. Trump said in an interview with The New York Times. “Corporate America is going to have to understand that we have to take care of our workers also.”

. . . .

“I don’t want them moving out of the country without consequences,” Mr. Trump said, even if that means angering the free-market-oriented Republicans he beat in the primaries but will have to work with on Capitol Hill.

“The free market has been sorting it out and America’s been losing,” Mr. Pence added, as Mr. Trump interjected, “Every time, every time.”

What “free market” is that, Mr. Pence? The one that suffers under the crushing weight of federal regulation, with Obama setting records for the numbers of pages added to the Federal Register? The one that features some of the highest corporate tax rates in the world? That free market?

Every time government interference hampers the economy, government blames the free market and hampers it further. Harry Browne used to say:

The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say: “See if it weren’t for the government, you wouldn’t be able to walk.”

If you don’t keep in mind that it is the government that hampers business in the first place, and that it is U.S. government regulation that makes our businesses fundamentally non-competitive to begin with, then actions like Trump’s can seem beneficial. But they aren’t. I wrote yesterday:

[T]he unintended consequences of government interference are not abstract. They are very real. Just ask Carrier’s competitors, who didn’t get a tax break because they haven’t threatened to move anything to Mexico.

Yet.

But they will, if they’re smart. That’s the other thing about intervention. One act of intervention encourages more. Welfare encourages people to seek benefits from government rather than by earning money through providing value to society. Corporate welfare does the same.

What I have done is an exercise in looking at the seen and unseen — a concept I have written about before. Government policy is often popular because there are obvious good effects that can be seen. But there are other effects that are unseen, and they exist too.

Kevin D. Williamson attacks the deal from a very similar perspective today at National Review:

It is a company that has competitors — competitors who employ Americans and pay taxes, just as Carrier does. These firms and their employees are put at an economic disadvantage by the subsidies paid to Carrier thanks to Trump and Pence. That means that some of these companies probably will be less profitable, and that they will not hire people they otherwise would have hired. But you’ll see no Trump press conference celebrating that. This is a case of Frédéric Bastiat’s problem of the seen vs. the unseen. The benefits are easy to see, all those sympathetic workers in Indiana. The costs are born by sympathetic workers, too, around the country, and by their families and by their neighbors. But those are widely dispersed, so they are harder to see and do not hit with the same dramatic impact.

The concept of the seen and unseen helps you see the flaw in this widespread argument: that we should not criticize Trump, because he saved Christmas for a bunch of Indiana families. It can also help you understand why government bailouts are generally bad. Think about it: under the “he saved Christmas!” argument, you could justify a huge range of government intervention. There are many businesses that fail in the United States, all over the place. Why not use taxpayer money to save all of those businesses? Think of all the Christmases that would be saved!

Most people would probably not endorse that proposal, even if they couldn’t necessarily explain the economics of why it would be a bad idea. The answer is that when businesses fail, we see the impact that has on people who are thrown out of work. What we don’t see, but which is very important, is that the business was failing because it was doing a bad job with scarce resources. The failure of the business frees up resources to be used by a business that does a better job of satisfying consumers. If all failing businesses were kept afloat, valuable resources would be tied up in losing ventures that don’t do any good for anyone, and the economy would collapse.

The fundamental issue is one of distributed intelligence. Which is better to determine how resources should be used? The distributed intelligence of the marketplace, or a centralized set of government decisionmakers? When you put it that way, the answer is obvious to most — but you have to think about it first, to frame the question in the proper way.

If you don’t understand the principles of why a general bailout of all failing business is wrong, then it’s harder to see the problem when it is done on a small and highly publicized scale. A grandstanding government official who goes around showering largesse here and there, and making sure the cameras are in tow, can win a lot of popularity — especially if he has openly declared that the free market no longer works.

P.S. If you made it to the end of the post, you’re a rare reader who is interested in economics. I don’t do these posts for the mountains of clicks they generate. Trust me: they’re not as popular as the “Who did Trump interview for a cabinet position?” style of newsy post. If you enjoy in-depth discussion of the free market, liberty, and the Constitution, you might enjoy my group the Constitutional Vanguard. In addition to my periodic newsletter on these topics, we have a private Facebook page and a private forum at my blog. If you think you might like that, you can sign up here.

[Cross-posted at RedState.]

139 Responses to “Incoming Trump-Pence Administration: The Free Market Has Failed”

  1. “Corporate America is going to have to understand that we have to take care of our workers also.”

    I see nothing with the government suggesting that American companies and the American government should favor the interests of Americans. Companies that prosper in a society have an obligation to that society and when they act as if they have none whatsoever, that their only interest is a cold bottom line, there is nothing wrong with government reminding them of their error.

    Yes, in the long run it’s not optimum, but people eat in the short run; something a politician knows and an economist often forgets.

    Kevin M (25bbee)

  2. It would help, of course, if the government stopped doing the things that makes the bottom line in America so unattractive.

    Kevin M (25bbee)

  3. As for bailouts, I’m not sure that’s quite the right word. To some degree this situation was a payment to the company to mitigate the other stupid things the government was doing.

    If only that was required every time government imposed costly rules, and applied to all companies, then government would see more clearly WHY these rules were stupid.

    Kevin M (25bbee)

  4. Meanwhile victims of San Bernardino’s attack can’t get medical care.

    narciso (d1f714)

  5. The fundamental issue is one of distributed intelligence. Which is better to determine how resources should be used? The distributed intelligence of the marketplace, or a centralized set of government decisionmakers? When you put it that way, the answer is obvious to most…

    With respect, and hopefully this is not snipping a quote out of context to defeat a point with which I agree, one could be forgiven for doubting that the proposition above is necessarily obvious to most.

    I think effective follow-ups to this are: “if you believe that a centralized set of government decisionmakers will best determine how resources should be used, who will be paying for this level of management? In the event that these government decisionmakers do not perform as well in this task as expected, or demanded, is the allocation and use of resources now to be left to the marketplace and the citizenry? And what happens if (as in certain other states) these government decisionmakers prove reluctant to relinquish this degree of control over the economy, and by extension wider society?”

    JP (f1742c)

  6. The free market wasn’t tried.

    I’m surprised Pence said something this foolish.

    Has anyone found out what was the original offer of tax incentives that Carrier rejected?

    Locke (8f1b10)

  7. Some dude on Wikipedia estimates that someday Mexico will draw 5% of it’s power from photovoltaic and or solar driven steam, if the USA loans them the money to build the stuff.

    papertiger (c8116c)

  8. in the mean while Mexico will be limping along on cheap natural gas powerplants.

    The kind that the uniparty, invoking the name of Saint Gore, won’t allow to be built in California.

    papertiger (c8116c)

  9. There is nothing wrong with government intervention if the primary motive is fundamentally non-economic.

    If the government wishes to prop up businesses in industries where American competitive advantage is too low to be worth exploiting, fine.

    But remember that the money spent on this is taking away money that could be used create jobs in industries where American competitive advantage is worth exploiting. We know those industries, by their making a profit, and by people voluntarily seeking to put their money in them.

    So if the desire is to create work-fare for some Americans at the cost of the jobs of other Americans we’re not as sentimental about, say so.

    If the desire is for Americans as a whole to maximally benefit, then leave it the hell alone.

    I will never understand why the solution to people losing the jobs they used to have, is not for them to go and get different jobs. Plenty of people have had to change careers and start over. I myself have.

    Gabriel Hanna (64d4e1)

  10. I find it interesting that the Washington Post has suddenly found fault with government intervention in the free market. Their ongoing TDS has now metastasized into opposition to government intervention in the economy.

    https://www.washingtonpost.com/politics/trump-threatens-consequences-for-us-firms-that-relocate-offshore/2016/12/01/a2429330-b7e4-11e6-959c-172c82123976_story.html

    Kevin M (25bbee)

  11. Patterico,

    I’m supportive of free markets and of free trade in general. I learned a lot during the Micro and Macro economics courses I took at the University of Chicago, and I support it overall. I think the Wealth of Nations should be required reading in high school/college. With this said, one point that I’ve been thinking about recently, and can’t necessary answer well- With the inefficiencies in the world economies, distorted as they are by communism, socialism, and crony capitalism, how do you ensure that the benefits of free trade reach the citizens of the United States?

    In the free market theory, the loss of jobs from Carrier moving to another country to save labor costs, yet still selling the finished goods in the United States, is that the gains in consumers spending less money more than offset the economic losses (and residual ripples in the local economy) of the workers/families that lose their jobs. I can easily understand how this works on a small scale, with a few companies. This works as long as you have enough people able to afford the finished good (and A/C systems aren’t cheap). For argument’s sake, what happens if you lose all the remaining manufacturing jobs in the country? At the same time, someone perfects the model that permits outsourcing of the majority of legal and accounting work to India (already starting to some degree), and so white collar employment also plummets. Service economy wages aren’t enough to replace $8-10k A/C systems, buy cars, homes, etc. How do the citizens of the United States afford the cheaper goods if they don’t have jobs?

    I realize that this is part of the “race to the bottom” argument of the critics of free trade. However, is there not a theoretical tipping point, similar to the economies of scale curves, where the benefits of additional loss of jobs due to relocation to lower labor environments outweighs the marginal gains?

    Sorry for the long comment, but this has been sticking in my mind recently, and I can’t come up with a good answer.

    Virginia SoCon (8eb3c5)

  12. @Kevin M:Their ongoing TDS has now metastasized into opposition to government intervention in the economy.

    Fantastic! …there will be more rejoicing in heaven over one sinner who repents than over ninety-nine righteous persons who do not need to repent.

    Gabriel Hanna (64d4e1)

  13. Dang, that next to last line should read, “However, is there not a theoretical tipping point, similar to the economies of scale curves, where the costs of additional loss of jobs due to relocation to lower labor environments outweighs the marginal gains?

    Virginia SoCon (8eb3c5)

  14. @Virginia SoCon:how do you ensure that the benefits of free trade reach the citizens of the United States?

    The benefits of other nations corruption, cronyism, and environmental disregard, will flow to the United States through free trade, while the costs will stay in those countries.

    This is easy to see. Imagine that every nation in the world sent all their exports to us and demanded nothing in return. The protectionist would say we would be maximally impoverished, with no American anywhere able to get a job, which is absurd–the entire world is sending its wealth to us for nothing, and so no Americans would need to produce of those things, and would be free to do other things that we have demand for not filled by the rest of the world’s exports.

    Americans who have jobs affected by free trade with “unfair” nations can work in industries where Americans have the competitive advantage, as long as some human want or need goes unfulfilled there will be jobs fulfilling them.

    Gabriel Hanna (64d4e1)

  15. The “free market” only benefits a handful of rich merchants and local despot who are free to trade as they please among themselves. The only way ordinary people get the benefit of the Earth’s wealth is through governments who attempt to give them more than a slave’s portion. Left to their own devices, the bosses would treat the rest of us the way muleteers treat their draft animals and ranchers treat their cattle, until they could replace us all with robots. The logical conclusion of the “free market” is a few thousand aristocrats, served by intelligent self-replicating and self-repairing machines which fulfill all their needs and desires, in a playground of a world which has no place for any other human beings.

    nk (dbc370)

  16. @nk: You can be my vassal, I’ll take care of you.

    Gabriel Hanna (64d4e1)

  17. ==Yes, in the long run it’s not optimum, but people (have to) eat in the short run; something a politician knows and an economist often forgets.==

    I agree with this. In fact, I think this acknowledgement of human reality is exactly why Mike Lee last week urged right leaning populists and pure conservatives to partner and work together to achieve practical societal solutions, and not fight each other at every turn.
    A modern parable:
    An elderly man was vacationing at an elite resort hotel situated on a beach off the Atlantic ocean. He liked to walk the beach early in the morning just as the sun was coming up– before it got crowded and before the heat of the day sapped his energy. As he walked he saw vaguely in the distance someone throwing towards the ocean. As he walked closer he saw it was a young boy picking something up off the sand and heaving it into the water, and repeating this action over and over. His curiosity aroused, the man walked up to the boy and saw that he had just picked up a starfish in his hand. Surrounding the boy at that spot on the beach were thousands of starfish.

    “What are you doing?”, the man asked the boy.

    “These starfish all got beached by the tide”, said the boy, “and I am throwing them back in the water before they die in the sun, and before the hotel’s big beach cleaner comes in a little while and vacuums them up.”

    The man gently replied, “There are so many here you cannot possibly save them all. In fact, you can save so few it hardly seems worth the effort. And tomorrow it will probably happen all over again. So in the end, what difference does it make”?

    “Well, it makes a difference for THIS one” replied the boy as he raised his arm and returned the starfish in his hand to its home in the sea.

    elissa (5934cd)

  18. You must separate out being pro free enterprise from being pro business. The two greatest enemies of the free enterprise system, in my opinion, have been, on the one hand, my fellow intellectuals and, on the other, the big businessmen. Milton Friedman

    AZ Bob (f7a491)

  19. I will never understand why the solution to people losing the jobs they used to have, is not for them to go and get different jobs. Plenty of people have had to change careers and start over. I myself have.

    Because not all people are equally placed to adapt. Suppose you have two coalminers in rural West Virginia. One is a thirty five year old, married to a woman who works part time at a local retail outlet, the other is a fifty five year old with adult children and a wife who gave up her part time job because of back problems, and has yet to find another one in which she won’t have to stand on her feet all day long. The first will find it easier to reschool himself at a new trade, relocate if necessary to a nearby city, and be able to count on his wife’s income to cover some of the family expenses while the transition takes place. The second won’t. And that doesn’t even count the emotional connections a person can build up over the years to his job and neighborhood. Or even two thirty five year old men, one single, one not; one completed high school, one only took his GED; one having to contribute to the care and support of older parents, one not: all the sort of things which factor in to people changing lives and locations. That’s why Horace Greely did not say “Go West, old man!”, and why so many of the Muslim refugees are young males. It’s harder for older people with families to make fundamental changes in the way they live.

    Hard nose economist might say “let them suffer”. But a politician can’t. Even Hillary Clinton knew it and said it.

    kishnevi (870883)

  20. Does this deal that clearly assists Carrier approach the level of picking winners and losers that the bail out of General Motors did? Just asking.

    AZ Bob (f7a491)

  21. Gabriel said, “Imagine that every nation in the world sent all their exports to us and demanded nothing in return.

    That goes more to the trade deficit argument, which is one that I don’t worry about. If we have a trade deficit, all that means is that at some point, somebody will have to buy American property, goods or services if they want to get their money’s worth for what they’ve already sold.

    However, in your scenario, if goods suddenly went from free to $5, would there be the ability to pay for this increase? Sure, theoretically you could then set up manufacturing in the U.S. to produce this good for the same or cheaper. But there are costs and inefficiencies in start-ups and wind downs.

    Let’s use, for example, the precious elements/minerals that are used in many electronics. These raw materials don’t exist everywhere. The primary veins(that I believe have been identified) are in China and the United States. The U.S. mines have been idled, because it is cheaper to buy from China. However, (and this has been a discussed fear), what happens if China closes off exports to the West of these goods for a couple of years? Then, when the U.S. firms set up the infrastructure to mine here, they open up the markets again and undercut the price of U.S. firms? Sure, some customers might stay with the U.S. for the stability, but others will chase prices and cause at least some of the mines to shut down again. When market access is closed again, there is again a delay and pain and uncertainty associated with starting up and resuming the flow of U.S. goods to the market.

    I realize that many cases don’t offer natural monopolies or duopolies, but I think this is a good one for our discussion.

    Virginia SoCon (8eb3c5)

  22. @nk: You can be my vassal, I’ll take care of you.

    That’s the interim phase, and at this point of it I probably rank higher than you in the hierarchy.

    But what do you think all those Chinese workers under the guns of the People’s Liberation Army (which owns most if not all of China’s factories) are? Or the workers at Carrier for that matter?

    nk (dbc370)

  23. @Kishnevi:It’s harder for older people with families to make fundamental changes in the way they live.

    Things are tough all over. Everyone has something.

    It’s a big rich country. We can help each other over the rough spots: that’s what unemployment insurance is for, and if it were real insurance instead of fake insurance it would turn a profit instead of being an expense. But the GOVERNMENT is not the best suited agent to do that. There is very little that governments can do, that citizens cannot do by grouping themselves voluntarily and profiting from it.

    You want welfare for things that happen that are no one’s fault. Fine. I’m not against it.

    But keep your eyes open about what you are doing. It is a handout. It creates moral hazard. In the end, we each have to deal as best we can with what life deals out to us.

    Gabriel Hanna (64d4e1)

  24. @nk: The workers at Carrier are not serfs, I’ll tell you that, and they are not vassals. If they want to change jobs they don’t need to ask permission.

    China of course is a repressive state. They’ve been the norm through history. Anything not based on a free exchange in a free market IS repression, to some degree. We’ve established what you are in favor of, just haggling over the price of your indenture.

    Gabriel Hanna (64d4e1)

  25. A capitalist who takes a bigger profit than the fair value of his contribution to the value of the goods and services he sells is as much a parasite as any welfare queen collecting welfare for eight kids.

    nk (dbc370)

  26. We’ve established what you are in favor of, just haggling over the price of your indenture.

    You understand nothing. Don’t waste bandwidth.

    nk (dbc370)

  27. I would, however, prefer that Trump spent more time on removing special perks for business that harm US workers, like H1-B, which is largely a fraud aimed at cutting US wages rather than supplying needed talent.

    Kevin M (25bbee)

  28. @Virginia SoCon:However, in your scenario, if goods suddenly went from free to $5, would there be the ability to pay for this increase? Sure, theoretically you could then set up manufacturing in the U.S. to produce this good for the same or cheaper. But there are costs and inefficiencies in start-ups and wind downs.

    So? That’s always true. It gets more true the more government gets involved and the less free the market is.

    However, (and this has been a discussed fear), what happens if China closes off exports to the West of these goods for a couple of years?

    That hurts them more than it hurts us. Either we’ll buy it from whoever they sell it to, or we will develop something else, or we will do without, or they will sit on them and derive no benefit from them. They might as well never mine them, as never sell them when they mined them, that is the worst of both worlds.

    These are the absurd things protectionists have to envision.

    You know Hong Kong doesn’t have water? How did all those people not die of thirst yet? Why don’t we all embargo Hong Kong’s water unless they pay $1 million per gallon?

    Figure out why that makes no sense, and then you will see why protectionism makes no sense.

    Gabriel Hanna (64d4e1)

  29. @Kevin M:like H1-B, which is largely a fraud aimed at cutting US wages rather than supplying needed talent.

    You’re being redundant there. If the talent is needed, companies will pay more for it, if they can’t import people from abroad.

    If you mean like a foreign Nobel Prize winner who is the only person who knows how to do something, that is a totally different visa program.

    Gabriel Hanna (64d4e1)

  30. Gabriel, you’re passionate for free trade, which I appreciate. I also agree that when it comes to charity/unemployment, subsidiarity is an important concept that we’ve largely forgotten about. (The Bible more or less states that I am responsible for my brother. Me, not the government.) However, I think you might be glossing over the human cost of some of these major shifts that kishnevi described.

    In pure free market theory, people just shift from one endeavor to another. That’s much more theorized than done.

    Also, you seem to believe I am a proponent of protectionism. I don’t believe I’ve advocated for any type of protectionism. I’m asking questions about whether there are any limits to the benefits of free trade as it occurs in outsourcing, especially in light of job migrations, which is the focus of the Carrier deal.

    Virginia SoCon (8eb3c5)

  31. A capitalist who takes a bigger profit than the fair value of his contribution to the value of the goods and services he sells is as much a parasite as any welfare queen collecting welfare for eight kids.

    Excess profit? Really?

    Kevin M (25bbee)

  32. If we had a truly free market instead of a highly regulated market with ever-increasing dependency on other less free markets the critics would be right. Trump may be swinging the tariff stick at Ford, Carrier and every other manufacturer that’s paying attention but it’s probably the carrot of wiping out oppressive over-regulation that’s persuading them to change their off-shoring plans.

    crazy (d3b449)

  33. @Virginia SoCon:However, I think you might be glossing over the human cost of some of these major shifts that kishnevi described.

    Not bloody likely, since I lived through them.

    That’s much more theorized than done.

    That’s not true. There’s little basis for the “average of seven careers” trope, but “the typical American worker’s tenure with his or her current employer was 3.8 years in 1996, 3.5 years in 2000 and 4.1 years in 2008, the latest available data.”

    Not to mention that people can go into business for themselves, doing something. If you’re looking for guaranteed outcomes in life, they are not there. There are no guarantees that anyone will make a living doing anything. If you think that society should be so ordered as to guarantee that, feudal vassalage is the closest any society ever came.

    I’m asking questions about whether there are any limits to the benefits of free trade as it occurs in outsourcing, especially in light of job migrations, which is the focus of the Carrier deal.

    You were not originally talking about limits on benefits: you were asking whether benefits are ever outweighed by costs, and if you are purely talking economic costs the answer is going to be “compared to what alternative”? You have to fairly reckon all the second, third, fifth, and millionth-order costs to the entire economy by each alternative you examine.

    Gabriel Hanna (64d4e1)

  34. A capitalist who takes a bigger profit than the fair value of his contribution to the value of the goods and services he sells is as much a parasite as any welfare queen collecting welfare for eight kids.

    Excess profit? Really?
    Kevin M (25bbee) — 12/2/2016 @ 11:59 am

    At least the “excess” profits are going to someone that can best allocate it, unlike the government.

    AZ Bob (f7a491)

  35. Gabriel

    H1-B is not “individual competition” but competition by the individual against a cherry-picked tag-team. Young workers, each willing to work — for a few years — for wages that seem good to them, but really aren’t. They cannot demand higher wages because they will be sent home sooner. They cannot work somewhere else because that would violate their visa. It’s a artificial workforce with wages that are depressed by law.

    (And please don’t tell me about the rules that allow US workers to preempt. They don’t work.)

    And US workers, who must compete linearly, with the added responsibilities that life brings, cannot compete against an endless stream of cheap young workers who are replaced the moment their expectations rise.

    Kevin M (25bbee)

  36. @Kevin M:Excess profit? Really?

    You may be on to something there. Let’s go through nk’s books and decide for him what is “excessive”. If he doesn’t think we are competent to judge that, or that we have any right to do so, then he might not be so quick to do that to others. We can hope.

    Gabriel Hanna (64d4e1)

  37. We should compare the Trump/Pence Administration VS a potential Hillary/Kaine Administration.
    I realize a lot of the puritans don’t want to do so, but that’s what the choice was.

    Cruz Supporter (102c9a)

  38. @Kevin M: It’s a artificial workforce with wages that are depressed by law. I agree.

    Gabriel Hanna (64d4e1)

  39. I realize a lot of the puritans don’t want to do so, but that’s what the choice was.

    That is maybe what the choice was in November, although I chose otherwise, but is not what the choice was in February for either side.

    Kevin M (25bbee)

  40. And the “choice” now in December is narrower, and I have to roll with it.

    Kevin M (25bbee)

  41. Trade between countries is more than a simple economic problem. Issues of national security and strategic advantage are also involved. Before WWI Britain began the difficult task of switching its fleet’s fuel from coal to oil. This seemed contrary to many, since Britain had coal reserves (Newcastle) but no oil. But oil made refueling relatively easy, it could be moved within a ship by pumps and pipes instead of by men with shovels and massive conveyor belts thus reducing the need for a large crew of stokers, the fuel burned cleaner with reduced maintenance cycles for the boilers, and the exhaust was less visible. This brought to prominence oil deposits in some relatively unknown lands, and we live with the consequences of this strategic innovation today, a century later, with the Saudi-dominated cartel, OPEC.

    It isn’t hard to see that WWII was also associated with the need for aggressive regimes to control their petroleum supplies. It is also obvious that Britain and the western hemisphere both share an interest in maintain “freedom of the seas” since this is required to ensure the availability of oil.

    In an age of nuclear weapons, the strategic conflict isn’t as overtly focused on ships, armies, planes, and innovative armaments and tactics as it used to be. Economic, religious, and mystic “environmental” forces are presumed to be capable of achieving what used to be accomplished with gunboats. The discussion of free trade is very much subservient to these concerns. We may be deluding ourselves when focus on our “service economy” and “globalization” because we can see their importance to the world economy. Strategically, our consumption of foreign goods is as much a weakness as it is lever. Should our economy collapse, the vacuum would be filled by some other nation, and we would be irrelevant.

    The dislocations and economic inefficiencies associated with these developments dwarf anything an economist can conclude about the Carrier.

    BobStewartatHome (c24491)

  42. @BobStewart: Issues of national security and strategic advantage are also involved.

    That’s why I said

    There is nothing wrong with government intervention if the primary motive is fundamentally non-economic.

    If we can’t afford to let any other nation produce any part of our fighting widgets, sure, have a propped-up industry, dependent entirely on government contracts, doing only that.

    But it will make us poorer than if we bought it from the lowest bidder, wherever that bidder happened to be. The sin is not in making it ourselves when we don’t need to, the sin is in lying to ourselves that we are economically better off by doing so.

    Gabriel Hanna (64d4e1)

  43. That said, it is disappointing to read Pence’s remarks. It would have been much better if he had promised to remove the tax, regulatory, and environmental shackles that weaken American business. After all, it is likely that Carrier’s successful competitors, those able to make a profit in the U. S., assuming there are such animals, are probably those who have relocated to states and locales that are less hostile to business than that experienced by Carrier. It would be refreshing to hear prominent politicians discuss these self-inflicted wounds, rather than the usual demagoguery.

    BobStewartatHome (c24491)

  44. But there’s another thing about trade: the more trade between two nations, the higher the cost of going to war with them. Refusal to trade makes wars of conquest attractive.

    Malaysia can cut off Singapore’s water at any time, and use that to conquer Singapore. And what would they have, if they did so? They would have killed the golden goose. A Singapore full of corpses would not be worth having, and if Malaysians could run Singapore they could have just made their own Singapore.

    And the more likely it is that Malaysia wishes to use Singapore’s water supply as a weapon, the more motivation Singapore has to solve the problem another way and deprive Malaysia of the income from selling them water.

    Gabriel Hanna (64d4e1)

  45. the sin is in lying to ourselves that we are economically better off by doing so.

    Exactly. There are large costs that must be borne if we are to continue to have influence on foreign affairs. But we also must manage our own country intelligently. I fear that our elites think they can export all the messy, costly work to foreign places and live on what amounts to pension checks earned by managing the world’s economy over the previous century. Every day when I open “Outlook” I am reminded of how far we’ve fallen in even simple technology. And our newest ships in the Navy are an embarrassment. They tend to be towed as often as they are self-propelled.

    BobStewartatHome (c24491)

  46. Question for the commentariat:

    Are there certain consumer items any of you will not buy if they are not manufactured in the United States even if they cost more or even cost considerably more than stamped imports or products that are “distributed” or “marketed” by American companies? I am not referring to boycott as much as a form of conscious consumerism that might be related to such things as quality or support of American jobs?

    elissa (5934cd)

  47. Week three in sum: pragmatic President-elect irks conservative ideologues.

    “Very good… Exemplary. Keep it up.” – Arthur Jensen [Ned Beatty] ‘Network’ 1976

    DCSCA (797bc0)

  48. 4. narciso (d1f714) — 12/2/2016 @ 10:33 am

    Meanwhile victims of San Bernardino’s attack can’t get medical care.

    because they’re under California’s Worlman’s Compensation system, and not regular health insurance.

    I think the New York Times ran that story as part of a series abouyt how people might suffer if Obamacare was repealed – what this shows is how bad government paid for health care is. At first it is good, and tehy wastelots of money – then they try to save money.

    Another story was about crime victims in general. They could not get colostomy bags removed. Until Obamacare came along and expanded Medicaid. There were probably others still too rich for Medicaid.

    Then I read that in Haiti a doctor wouldn’t treat an emergency unti he oaid $2,000 – he waa bargained down to $1,000. In the arrticle about the colllapse of the asylum courts.

    Sammy Finkelman (643dcd)

  49. You know? I subsisted on this diet of free market fundamentalism for 25 years. “Up by the bootstraps.” “Efficient allocation of capital.” “Lost a job? Go technical college and rent a U-Haul!”

    I’m done. (And not out of self-interest, I’m a well compensated investment professional.) I understand the theory. But this schtick of “believe my counterfactuals about the ‘seen and unseen’ and not your lying eyes has lost its potency.

    The “seen” is my dying hometown. My lifelong elders and neighbors deserve more consideration than to be treated like scraps on the cutting room floor like so many bloodless economic units, while pointy-heads like Patterico speak with insufferable certitude about all those “unseen” jobs that never seem to materialize. Put differently, we’re to take it that if we had not embraced free trade, which treated our workers and our industries like disposable widgets instead of assets, that the middle and working class’ standard of living would be even lower than it is today.

    Someone explain to me how this is intellectually different than the Obama administration’s insistence, the counterfactual that he “saved or created” however many millions of jobs via the stimulus, even as employment FELL for the period it was in effect. It’s unprovable conjecture. There never have to be an measurable results because, if you unshakably hold to Kenyesian theory, the conclusion is without it, things would have been even worse!

    We’re being asked to swallow an identical argument in this strain of anarcho-libertarianism that preaches “free trade” is always and forever beneficial. Don’t question “free trade.” It’s a certainty we would be worse off without it, economists assure us.

    I’m getting off this train. Markets are generally good and enriching, but we are NEVER going to have a completely “free market.” This seems to be a popular retort, that we can’t hold free trade’s actual results as indicative of whether the theory is sound, since we don’t have a true “free market.” This is starting to sound like the graying Communists who insist that the Soviet Union’s horrific results were because they weren’t practicing “REAL” communism.

    The Constitution gives us the right to regulate trade to serve America’s interests. It’s time we did so.

    Jared Nelson (4e1b3c)

  50. Singapore can probably do a better job of defending herself today than under British rule in 1941. And Singapore has been working on becoming self-sufficient wrt water since the break with Malaysia in 1965. At great expense, but with clear intent,

    Singapore has become a global water research and technology hub with active support from the government.

    Malaysia now has water that it can’t sell. A loss to Malaysia, and a loss to Singapore, but an excellent example of strategic thinking.

    Singapore is a remarkable example of how an urban-dominated country can be functional. I think one of the issues that we have yet to confront is what can be done with our urban white elephants. They can command a majority of votes in the surrounding locales, and their politicians use this power to reinforce their own failures, from public education to transportation to law enforcement/public safety. All resources are devoted to the maintaining the failed status quo, at great cost to those who live there.

    BobStewartatHome (c24491)

  51. I fidnt she Schwartz on the lust of ruzzoto tray carriers, but why do you assume the statement is true?

    narciso (d1f714)

  52. elissa @46, the only thing I can think of off hand are my American flags. I always look for the “Made in USA” as well as to their construction.

    BobStewartatHome (c24491)

  53. It would be refreshing to hear prominent politicians discuss these self-inflicted wounds, rather than the usual demagoguery.
    BobStewartatHome (c24491) — 12/2/2016 @ 12:34 pm

    Well said, BobStewartathome.

    felipe (023cc9)

  54. There are words that never seem to appear in economists’ briefs, and certainly not in Austrian economics’ briefs.

    Loyalty
    Community
    Obligation
    Duty
    Fealty

    and other squishy personal relationships that econometrics has difficulty with, but are core to the politician’s trade, and have actual meaning wrt the wealth of nations.

    Kevin M (25bbee)

  55. The two biggest “unseen” effects for the average American taxpayer are 1) Not ‘seeing” the taxes paid. The money is deducted before they ever see it. If they were made to wrote actual checks for the year on Dec. 31, they would see a whole lot better. 2) The gazillions in government debt.

    The effects of this blindness? Devastating.

    Ed from SFV (3400a5)

  56. People often talk about “externalities”, like dumping garbage in rivers, and how one has to count it in the calculation of economic benefit. Since market forces* have difficulty controlling this, governments impose a prohibitive cost on the polluter.

    But closing a plant and laying off all the workers is ALSO an externality, and the mere costs associated with the terminations are far less than their actual measure.

    If governments impose an addition burden (preferably not prohibitive) to mitigate the external costs that society might otherwise have to bear, it’s not that different from discouraging pollution.

    Kevin M (25bbee)

  57. *and, no, the libertarian idea that the People will punish the polluter economically never seems to pan out.

    Kevin M (25bbee)

  58. If all the weathermen and economists in the country switched jobs, no one would ever know the difference. =rimshot=

    If you ask three economists a question you will get five different answers. =rimshot=

    Or as Reagan put it, there should be a Trivial Pursuit game for economists with 100 questions and 3000 answers. =rimshot=

    It is said that if all the economists in the world were laid end to end, they still wouldn’t reach a conclusion. =rimshot=

    DCSCA (797bc0)

  59. Lot of good comments here.

    I will just say (albeit as a former art major) that “free” trade is an abstraction. Seems like there are any number of actions a nation can take to change free trade to benefit themselves, like currency manipulation, as Trump always talks about, or importing cheap IT labor.

    I think the people who look at their towns, left to rot after their plant moved to Mexico, have a point. How is it “free” market when our tax code and NAFTA give such advantages to other countries? I would prefer a more fair trade, not protectionism.

    elissa, you hit on something with the comment on buying American. A company can use that to its advantage, as again Trump talked about with Carrier. If I were buying an AC system today, it would be Carrier. So yes, there is definite value to be mined in that.

    Patricia (5fc097)

  60. air conditioning is how we stay cool in the summer

    happyfeet (28a91b)

  61. So the schlager jury is deadlocked.

    narciso (d1f714)

  62. Free trade is fair trade. The fake ‘fair trade’ being called for here is to use the thumb of the government to force people to make ‘good’ choices, instead of letting people decide for themselves how they wish to spend their money.

    Gabriel Hanna (64d4e1)

  63. How many pages in the tpp, in NAFTA, the two, gabriel?

    narciso (d1f714)

  64. Actually you’ll be surprised who agrees with you patterico.

    narciso (d1f714)

  65. @narcisco:How many pages in the tpp, in NAFTA, the two, gabriel?

    Why on Earth is that relevant?

    Does the length of the treaties indicates that they are not really free trade? If they’re not really free trade, you won’t be able to use them as an example of free trade being bad for anyone, will you?

    Gabriel Hanna (64d4e1)

  66. @Patricia:I think the people who look at their towns, left to rot after their plant moved to Mexico, have a point.

    What about the people who look at their towns, left to rot after their plant moved out of state? Is their suffering less? Clearly the Constitution needs to be amended to allow state to impose tariffs.

    Gabriel Hanna (64d4e1)

  67. The huntress takes issue with the deal.

    narciso (d1f714)

  68. Gitmo lodgers stand resolute together with #NeverTrump!

    “SO JUST LIKE CNN STAFF, THEN: Gitmo Prisoners ‘Thought It Was the End of the World’ on Election Night, Asked for Tranquilizers.”

    https://pjmedia.com/instapundit/250802/

    Colonel Haiku (fa3dba)

  69. they have a point too, gabriel.

    patricia (5fc097)

  70. “What about the people who look at their towns, left to rot after their plant moved out of state? Is their suffering less? Clearly the Constitution needs to be amended to allow state to impose tariffs.”

    Nice try, Gabriel Hanna. They are both American states. Competition among the 50 states has gone on since the founding. And unlike your rather silly suggestion there, we wouldn’t need to change the Constitution to impose a national tariff, as it explicitly gives us the authority to regulate foreign trade.

    We don’t need false choices between whether we intervene everywhere to preserve those jobs, an asset to 1,000 American citizens, and intervening NOWHERE.

    Jared Nelson (83388d)

  71. Kevin Williamson and NR are dysfunctional, some say they deserve to whither away. They are negative political assets and morally, they are indefensible.

    Colonel Haiku (2601c0)

  72. i don’t click on NR or hotairs anymore

    they have very poor character, them ones

    happyfeet (28a91b)

  73. @Jared Nelson:They are both American states.

    How are people in Oregon better off losing their jobs to Americans in South Carolina than to Mexicans in Mexico?

    Gabriel Hanna (9b1f4a)

  74. If I were buying an AC system today, it would be Carrier. So yes, there is definite value to be mined in that.
    Patricia (5fc097) — 12/2/2016 @ 2:46 pm

    I recently purchased a top-of-the line AC/heating system from carrier. I am so happy with it. So, yeah, I am with you Patricia.

    felipe (023cc9)

  75. Well, a Carrier system from a local vendor, to be precise.

    felipe (023cc9)

  76. Are there certain consumer items any of you will not buy if they are not manufactured in the United States even if they cost more or even cost considerably more than stamped imports or products that are “distributed” or “marketed” by American companies?

    Food, medicines, soap and toothpaste, and that’s about it. The USA label is basically a fraud these days. It mostly means packaged in the USA. It was made abroad. From Hershey’s Nuggets (Mexico) to Harley-Davidson motorcycles (China).

    And I prefer Made in Japan (or Taiwan) over USA because the quality is higher. Much higher.

    nk (dbc370)

  77. yes yes you don’t want a car some fat-ass illiterate united autoworker thug got his stench all up in

    happyfeet (28a91b)

  78. You may be on to something there. Let’s go through nk’s books and decide for him what is “excessive”. If he doesn’t think we are competent to judge that, or that we have any right to do so, then he might not be so quick to do that to others. We can hope.

    When I apply to you for a business license. Or a building permit. Or an import permit. Or a zoning variance. Or a driveway permit across a public sidewalk for my business. Then, yes, you absolutely should do that.

    nk (dbc370)

  79. @nk: Sounds like you don’t mind being a vassal, having to ask some low level bureaucrat “may I” before you do anything.

    Gabriel Hanna (9b1f4a)

  80. Gitmo lodgers stand resolute together with #NeverTrump!

    So now we’re enemies of America? You are loathsome.

    DRJ (15874d)

  81. How are people in Oregon better off losing their jobs to Americans in South Carolina than to Mexicans in Mexico?

    1. Those losing their jobs in Oregon can move to S. C. freely. The even speak the language.
    2. They will have vote in S. C. once in residence.

    Sadly, having moved to S. C., they may make the same political mistakes they made in Oregon, meaning it is just a matter of time before S. C. will hit the skids.

    BobStewartatHome (c24491)

  82. @nk: Screwtape approves your permit Raj:

    in that country a man could not, without a permit, cut down his own tree with his own axe, make it into planks with his own saw, and use the planks to build a tool-shed in his own garden.

    Gabriel Hanna (9b1f4a)

  83. @BobStewart:Those losing their jobs in Oregon can move to S. C. freely.

    How dare you say “Lost a job? Go technical college and rent a U-Haul!”

    Gabriel Hanna (9b1f4a)

  84. You know why Japanese stuff is of better quality that USA stuff? It’s not the workers. It’s the bosses. In Japan the bosses get about 70 times as much as what the average worker gets. U.S. bosses make about 350 times as much. Germany, which also makes good stuff, is in the middle with bosses making about 150 times as much as the workers.

    nk (dbc370)

  85. Take your Lewis and stick him in your Hayek, Gabriel. Got any ideas of your own?

    nk (dbc370)

  86. And the biggest point in the Oregon and South Carolina example: if South Carolina can make a go of it, then Federal regulations and taxes are most likely not the reason for Oregon’s failure. Meaning that Oregon created the problem leading to the business failure, and Oregon could correct that problem if it wanted to.

    BobStewartatHome (c24491)

  87. “How are people in Oregon better off losing their jobs to Americans in South Carolina than to Mexicans in Mexico?”

    Gabriel, you make a habit of purposely missing the point, don’t you? They, of course, are NOT any better off. But the question here is whether it’s a sound principle to use our Constitutional power to regulate foreign trade to the advantage of our citizens. It applies when it’s a matter of company leaving the United States, and does not apply when a domestic company is simply relocating a plant from one American state to another one.

    Now, would you like to keep defending this silly hypothetical about changing the Constitution to allow for interstate tariffs when you weren’t even seriously proposing it in the first place?

    Jared Nelson (83388d)

  88. You know, this is our country. It does not belong to the fat-bellied multi-nationals whose only loyalty is to their bank balance. And, yeah, if the American people are going to protect their fat asses and their fat bank accounts from foreign invaders and pirates and terrorists and gangsters, with our soldiers and sailors and police and firemen and paramedics and all the workers who support them, then they should expect that we will put the common good of the American people before the good of their bank balance.

    nk (dbc370)

  89. I didn’t know you were #NeverTrump, DRJ. You’ve had your numerous doubts expressed numerous times, but you’ve also said you hope Trump succeeds as our president.

    Is that a never Trump position?

    Colonel Haiku (2601c0)

  90. Elissa was right. Very, very grim lately.

    Colonel Haiku (2601c0)

  91. Well the tenants at club gutmi were more like the red queen supporter the daily caller chronicled.

    narciso (d1f714)

  92. 88.You know, this is our country. It does not belong to the fat-bellied multi-nationals whose only loyalty is to their bank balance.

    Arthur Jensen would disagree:

    “You are an old man who thinks in terms of nations and peoples.

    There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! … There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do.

    We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime.” – Arthur Jensen [Ned Beatty] ‘Network’ 1976

    DCSCA (797bc0)

  93. Questions: Are native-born secession movements principled and patriotic or are they virulently anti-American? Or does it depend on the state?

    Colonel Haiku (2601c0)

  94. That was silly convergence theory, propagated by the likes of Galbraith, orthodox Marxists still believed that the revolution must occur in the capitalist west, feudal Russia or traditional Latin states don’t count.

    narciso (d1f714)

  95. What about the people who look at their towns, left to rot after their plant moved out of state?

    This was a big issue in 1830.

    Kevin M (25bbee)

  96. Heh! Poor Stalin was before his time. He could have nationalized all the economy that mattered with one “Federal Trustee” backed up by a squad of men with small pistols in the board room of every Fortune 500 company. Including agriculture, in the boardrooms of ADM, Tyson Foods, and Hormel; no starving of kulaks necessary.

    nk (dbc370)

  97. Or a building permit.

    A permit is supposed to be solely to regulate necessary nuisances, like construction or parades. It is NOT supposed to be a blank check to rummage through one’s life looking for things to control.

    Kevin M (25bbee)

  98. And Ukraine is accused of interfering in the US election by (piquantly) Russia.
    http://thehill.com/blogs/ballot-box/308427-russia-is-accusing-ukraine-of-undermining-trump

    Kishnevi (480bf9)

  99. Interesting counter to your “Arthur Jensen” quote here, DCSCA—

    We hear a lot of talk about how we are becoming a “globalized world.” But the relationships that people value in this country are local. Family, state, country. They are local. We will compete in the world. We will compete in the world where is a two-way road — not the one way around. The advantages will come back to our country, and they haven’t for many years.

    There is no global anthem. No global currency. No certificate of global citizenship. We pledge allegiance to one flag and that flag is the American flag.
    Donald Trump 12/1/16

    Is he wrong about this?

    elissa (b10ba6)

  100. Maddow is losing it; needs to Tai-wan-on tonight.

    Martinis.

    DCSCA (797bc0)

  101. No I’d day more like cinnamon schlapps, they’ll drag her offstage totally blotto.

    narciso (d1f714)

  102. Maddow isn’t alone. Frankly, I think almost all the national opinion “journalists” are having trouble deciding how to contribute and remain relevant in this time of political surprise and re-alignment. Having their own idiocy and hypocrisy thrown back in their faces within weeks or days or hours by re-publishing their tweets, predictions, articles and show segment videos has totally changed the landscape for many of them.

    elissa (b10ba6)

  103. @101-elissa– Is he wrong… interesting… ‘course one is just fiction and the other just unreal. But a better question may be, ‘is he Howard Beale?’

    For Americans don’t want to be governed; they wish to be entertained.

    And you gotta admit, it’s been quite a show already, just three weeks in.

    DCSCA (797bc0)

  104. Yes, elissa they followed the ptolomaic model and thought trump would fall off the earth, well there’s terra incognita out there for them,

    narciso (d1f714)

  105. Trump is just bound and determined to get me like him, it seems to me. I swear, elissa, I had not heard or read that speech you posted and my comment before did not derive from it.

    As for Taiwan, kudos. To Trump. Kudos to Trump. Carter betrayed it because he was an idiot and Reagan let the doublecross stand because his plutocrat buddies could make more money trading with the PRC.

    nk (dbc370)

  106. I can just see it: June 2017. The NY Times runs a story about Trump giving too many news conferences and about how the administration is too open and accessible to people who aren’t even the “real” press.

    Kevin M (25bbee)

  107. The thing with Taiwan is letting the Chinese know that there are repercussions for the South China Sea thing.

    Kevin M (25bbee)

  108. get me *to* like him

    nk (dbc370)

  109. That was memorex this is live, we’ve suffered through 8 years of the political equivalent of William hung, scratch that hung knew he was a lousy singer.

    narciso (d1f714)

  110. Elissa, the toothpaste is out of the tube because of the Internet. And it will take more than anything Trump can do. For one thing, companies need to go back to the idea that they exist (and therefore only make money for their stockholders) only because they have customers, not the other way around. This idea seems often lost here, but not in other countries.

    I have mentioned this before as a way of example:
    I collect classical music. I buy from several places, often Amazon Marketplace, but sometimes from Amazon itself, and sometimes from European Amazons (Amazon UK, Amazon Italy, etc) because of price. And often from vendors outside the Amazon network. In terms of service, speed of shipment, and other details of customer service, the European vendors are almost always superior to American vendors (except Arkivmusic, and they can be expensive). Even inside Amazon itself, the European Amazons are better than the US branch. Which says something.

    Kishnevi (480bf9)

  111. You know? I subsisted on this diet of free market fundamentalism for 25 years. “Up by the bootstraps.” “Efficient allocation of capital.” “Lost a job? Go technical college and rent a U-Haul!”

    I’m done. (And not out of self-interest, I’m a well compensated investment professional.) I understand the theory. But this schtick of “believe my counterfactuals about the ‘seen and unseen’ and not your lying eyes has lost its potency.

    The “seen” is my dying hometown. My lifelong elders and neighbors deserve more consideration than to be treated like scraps on the cutting room floor like so many bloodless economic units, while pointy-heads like Patterico speak with insufferable certitude about all those “unseen” jobs that never seem to materialize. Put differently, we’re to take it that if we had not embraced free trade, which treated our workers and our industries like disposable widgets instead of assets, that the middle and working class’ standard of living would be even lower than it is today.

    Someone explain to me how this is intellectually different than the Obama administration’s insistence, the counterfactual that he “saved or created” however many millions of jobs via the stimulus, even as employment FELL for the period it was in effect. It’s unprovable conjecture. There never have to be an measurable results because, if you unshakably hold to Kenyesian theory, the conclusion is without it, things would have been even worse!

    We’re being asked to swallow an identical argument in this strain of anarcho-libertarianism that preaches “free trade” is always and forever beneficial. Don’t question “free trade.” It’s a certainty we would be worse off without it, economists assure us.

    I’m getting off this train. Markets are generally good and enriching, but we are NEVER going to have a completely “free market.” This seems to be a popular retort, that we can’t hold free trade’s actual results as indicative of whether the theory is sound, since we don’t have a true “free market.” This is starting to sound like the graying Communists who insist that the Soviet Union’s horrific results were because they weren’t practicing “REAL” communism.

    The Constitution gives us the right to regulate trade to serve America’s interests. It’s time we did so.

    Jared,

    I don’t know where you live, but I think you have a valid concern about the bleak economic picture in many places in America.

    I think I have some answers to some of your questions, but I’d rather ask you some questions, if it’s OK with you.

    What do you think is to blame for the bleak picture you describe?

    Patterico (115b1f)

  112. I like elissa’s comments in this thread, a lot. I told the starfish story to a friend of mine tonight. And I think the question about people’s willingness to buy non-American goods is very relevant.

    Patterico (115b1f)

  113. One has come to identity this crony sysgy as the freemarket, something that happened is south america, in the late 90s and 00s

    narciso (d1f714)

  114. Take your Lewis and stick him in your Hayek, Gabriel. Got any ideas of your own?

    Well nk’s feeling his oats tonight.

    For all the talk of unfair trade practices by non-US persons and states (some of which is justified), no one has mentioned the role of the IRS in trimming the foreign earnings of US citizens working overseas and that of companies holding US capital abroad.

    American tax policy is infamously punitive (the only country other than Eritrea that taxes income made by its nationals overseas) and the IRS is frankly a pain the the ass to work with from a compliance perspective.

    JP (683605)

  115. i took the food stamp years as a license to taste fancy foreign cheeses and delectable foreign liqueurs like the maraschino

    i became conversant in gin, and in all sorts of cleaning robots made in exotic faraway lands

    but now we’re in a serious time again

    a time what asks us to think of our country’s best interests

    okey dokey doggy daddy

    I’m in!

    happyfeet (28a91b)

  116. so let’s talk about American gin

    this one’s captured my fancy

    it’s not a pretty pretty pony of a gin no no – it’s a bit brutish actually – it storms into the room and it’s not easily tamed with a splash of this or a dash of that

    this gin’s from tennessee, you see

    it’s sassy!

    happyfeet (28a91b)

  117. Some clever wag may just go through a parts list of a few Carrier units and trace where the base components originate. Like the sheet metal– steel/aluminum — did it originate from Chinese steel? How about some of the modular circuit boards, wiring and chip and compressor components– Mexico perhaps? Maybe– maybe not. Final assembly may remain in Indiana, but the parts… well, they might not likely all be “Made in U.S.A.”

    DCSCA (797bc0)

  118. oh now it’s parts is it

    whinging on about the bits and tids

    happyfeet (28a91b)

  119. Now this new show incorporated, it toads the wet sprocket.

    narciso (d1f714)

  120. oh i saw a glimpse of that – i’m just kinda inundated with stuff to watch right now

    happyfeet (28a91b)

  121. Are there certain consumer items any of you will not buy if they are not manufactured in the United States even if they cost more or even cost considerably more than stamped imports or products that are “distributed” or “marketed” by American companies?

    It can be a hard search today. Virtually impossible for batteries, shoes and electronics.

    But toothpaste, tires– only American made. As a general rule, food– particularly produce (just today I picked up tomatoes and made sure they were marked ‘Product of USA.’)

    We exclude, of course, Swiss chocolate, English cheeses all wine and liquor. And in ‘special’ category all it’s own, lingerie from France. Ooh la-la.

    “Everything I like is either illegal, immoral or fattening.” – Alexander Woollcott

    DCSCA (797bc0)

  122. The biggest problem I have, is the knee jerk reaction by some of Trumps biggest haters on the conservative side. They did no checking in the state of affairs in the HVAC industry. As I mentioned in another similar post comments here, almost ALL PARTS come from China, it Mexico. The vast majority of companies who are competitors, are already outside the USA. States routinely offer tax breaks to lure companies to build, or set up shop in their state. Poaching would be an apt term. So, what Trump/Pence did, was facilitate a deal, that benefits people who desperately needed it. This is not a bailout in the traditional sense, and had all these journalist, and I use the term loosely, done their homework, and put aside their animosity, then I believe the articles would not have been so harsh. I myself was a #nevertrumper right up till election day. But since he will now be our President, and has made some damn good picks for cabinet positions, I’m very willing to give him some slack now. There will inevitably come times we all can object, but let’s let the guy have a break for now.

    David L (81943c)

  123. For Americans don’t want to be governed; they wish to be entertained.

    Kind of an overstatement?

    When Brown was running for the Senate in Mass, the audience of supporters chanted “41, 41,” which would have been the vote to defeat Obamacare. And that was the beginning of the revolt against left-leaning governance. Yes, Trump and other pols can be entertaining, but this was a political movement, IMO.

    Patricia (5fc097)

  124. States routinely offer tax breaks to lure companies to build, or set up shop in their state. Poaching would be an apt term.

    That is true, and when they do so for specific companies, they are picking winners and losers, and it is economically counterproductive — for the reasons discussed in the post. I would be happy to discuss those further. Even if all this company’s competitors were Chinese, a targeted tax break would still hurt other types of businesses.

    This is not a bailout in the traditional sense

    I never said it was. People like Kevin M apparently misunderstood my analogy. My point was that the same logic that says to give a targeted tax break to a company because JOBS AND CHRISTMAS would also justify a bailout.

    Patterico (115b1f)

  125. There is nothing wrong with government intervention if the primary motive is fundamentally non-economic.

    You might want to revisit the logical structure of that sentence. I think you mean to assert that some non-economic motives can arguably justify government intervention.

    But the way you phrased it, government intervention in the economy is OK if the primary motive is to pad Donald Trump’s bank account, or to run over a baby on 4th Avenue, or to drown 50 puppies.

    It’s a quibble but I know you want to be precise.

    Patterico (115b1f)

  126. For Americans don’t want to be governed; they wish to be entertained.

    Kind of an overstatement?

    More like a boring refrain we have heard literally dozens of times from this tiresome person.

    Patterico (115b1f)

  127. @Patterico:It’s a quibble but I know you want to be precise.

    Consider it suitably modified: a non-economic motivation for intervention is not necessarily wrong; an economic motive based on the good of the entire economy is fallacious.

    Gabriel Hanna (9b1f4a)

  128. David L,

    UT/Carrier has the largest HVAC market share in North America. Why should we help the biggest company beat out Trane, Rheem, LG, etc.?

    DRJ (15874d)

  129. Patterico, I have plans for the afternoon, but I will give your question a go at a later time.

    I don’t expect to “win” any debate with you, since I’m not a highly read theoretician like yourself. I’ve simply thrown off the shackles of, in all circumstances, this near-religious fealty to the “free market.”

    In all candor, if you could work out on paper for me that the current “free trade” regime results in, say, an extra quarter point of GDP growth annually, versus a more pragmatic system that results in slightly slower growth, but doesn’t hollow out the employment base for many blue collar or working class citizens, I would NOT CARE. What good is a fractionally higher GDP – which is an abstract statistic that tells us almost nothing about the economic well being of our people – if we’re impoverishing and stripping of dignity Americans who simply want honest pay for honest work?

    Pat Buchanan said it best years ago, paraphrasing, “I believe in markets. What I don’t believe in is market IDOLATRY!”

    Jared Nelson (46bd70)

  130. @Jared Nelson:we’re impoverishing and stripping of dignity Americans who simply want honest pay for honest work?

    But the proposed solution is to pick the pockets of Americans who earned honest pay for honest work.

    It’s not enough to work hard. You have to work hard at something worth working hard at. The worth of that is determined by what people are willing to pay for it, based on their free choices of where they put their money.

    It doesn’t matter how hard I work on my orange grove in Minnesota. I am not going to be able to compete on price with California and Florida. I should find another line of work, where Minnesota has a competitive advantage, or I should move to California or Florida and grow oranges there. But you would have me lobby for tariffs on California and Florida oranges to make it “fair”. And all the consumers of oranges lose thereby. With a likely reduction in the consumption of oranges.

    Gabriel Hanna (9b1f4a)

  131. #118 mr happyfeet, I’d like to hear more about those cleaning robots made in exotic faraway lands. I’m envisioning Rosie from The Jetsons in her French maid outfit.

    Cruz Supporter (102c9a)

  132. Are there certain consumer items any of you will not buy if they are not manufactured in the United State

    Will not buy? Never say never. But for the most part: movies, poultry, major appliances (all of mine are made in the USA), guns. I love Wigwam socks. If you add the UK and Canada, TV shows.

    Things I would pay more money for, but are no longer made: Bed sheets. I had some sheets from Cannon Mills that lasted 20 years and were as comfortable in the last year as they were in the first, with indifferent care. Sheets from India or China? I’m lucky if they don’t pill up in the first week. Cotton mills moving overseas was a big mistake as quality took a huge dive.

    Kevin M (25bbee)

  133. After the ongoing catastrophe of family pets being poisoned by contamination from crappy Chinese ingredients that are under no proper regulation there, I only buy pet food and treats that are made from meat produced in the United States–although I am never completely sure if ALL the ingredients are American made (such as the added vitamins, etc.) Over a year’s time I do pay considerably extra to achieve this peace of mind.

    And speaking of vitamins, it is nearly impossible to find human quality medicines vitamins and supplements that are definitely made in the USA. This bothers/worries me more than almost anything else.

    My new A.O. Smith water heater is made in U.S.A.

    Somebody above mentioned shoes. There is a company in San Antonio (SAS which stands for San Antonio Shoemakers) which still sources and makes many (but not all) of its shoes and boots in America. They specialize in men’s and women’s casual walking shoes and shoes for professionals who are on their feet a lot such as nurses or salesmen. You won’t find high fashion dress or party shoes there, though.

    https://sasshoes.com/catalogsearch/result/index/?cat=&p=4&q=made+in+USA

    elissa (b10ba6)

  134. If you want to start your own company it will take a little money to get started and on your feet. Banks put many things into consideration when you ask them for money for startup business loans. Here are five of the most important, considerations when you want money from a bank for a loan for your new company.

    Click thiss …..> https://www.facebook.com/Online-jobs-1817478715194253/app/190322544333196/

    aleena (766b83)

  135. Is this the person who was wrong about everything Trump related who now insists we take him seriously about Trumps political moves? I have no idea what motives he had behind this deal with Carrier, but I am confident in predicting that it will turn out to have been a rather clever move, while everything you say about it will prove to be wrong.

    Mr Black (7c41e5)

  136. “But the proposed solution is to pick the pockets of Americans who earned honest pay for honest work.”

    Disingenuous, Gabriel Hanna. That genie has been out of the bottle, even among the conservative brain trust, for quite a while. We’re accepting the premise of “refundable” family tax credits above and beyond someone’s net income tax liability, the “Reformicon” agenda involves redistribution to essentially buy support for global capitalism, ALL of which involves “picking the pocket” of taxpayers. Hell, Social Security involves “picking pockets!” All taxation involves “picking pockets.” Color me unmoved. You seem to be accepting of the free market heresies peddled by Conservtism, Inc, but reserve special outrage for protectionism.

    In answer to the idea, YES, I am making a conscious decision, I guess you could say, to support a policy that “picks your pocket” via a potentially higher price for your air conditioning units in the name of benefitting American citizens. Economics is a series of tradeoffs, and this is one tradeoff I don’t object to.

    The economy exists to serve America’s interests, not the other way around.

    Jared Nelson (46bd70)


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