Trump Superfans on Tariffs, and Also Trump Superfans on Tariffs
Trump superfans: Tariffs are inherently a good thing. They protect American industries from unfair competition by other countries. Globalization and the free flow of goods hurt the United States. America first!
Also Trump superfans: Trump’s tariff war with China is a good thing, because it will enable Trump to make a Great Deal with China that will lower tariffs on both sides.
As I write this (in the midst of a very fluid situation) Donald Trump has threatened more tariffs on China, to kick in Friday:
President Trump’s top economic advisers on Monday accused China of reneging on previous commitments to resolve a monthslong trade war and said Mr. Trump was prepared to prolong the standoff to force more significant concessions from Beijing.
Mr. Trump, angry that China is retreating from its commitments just as the sides appeared to be nearing a deal and confident the American economy can handle a continuation of the trade war, will increase tariffs on $200 billion worth of Chinese goods on Friday morning, his top advisers said.
“We’re moving backwards instead of forwards, and in the president’s view that’s not acceptable,” his top trade adviser, Robert Lighthizer, told reporters on Monday. “Over the last week or so, we have seen an erosion in commitments by China.”
The market was temporarily rattled yesterday but bounded back. Today, as I write this, the Dow Jones (a dopey measure of stock values, by the way) is down, but by the end of the day, who knows what will happen? Meanwhile, idiots on both sides of the aisle are praising Trump:
On Sunday, Mr. Trump’s tariff threats sparked concern among business and industry groups, but drew praise from both sides of the political aisle.
“Hang tough on China, President @realDonaldTrump,” Senator Chuck Schumer of New York, the Democratic leader, said on Twitter.
“Excellent decision by @realDonaldTrump!” Laura Ingraham, a Fox News host, tweeted, which the president retweeted onto his feed. “No other president has had the guts to take on the China challenge.”
Trump superfans will be happy no matter the outcome, as they hold contradictory viewpoints (as illustrated at the head of the post). If negotiations fail, huzzah! More glorious tariffs to protect our industries! If negotiations succeed, huzzah! Fewer tariffs on both sides, a great deal, and an easily won trade war! (I’m sure not all Trump superfans feel this way — just enough that the generalization is fair.)
For now I’d like to ignore the fleeting details of this or that negotiation or stock market fluctuation and focus on the Big Pitcher: tariffs are dumb.
Scott Lincicome has a great piece against tariffs and in defense of the free market at National Review, and it’s worth some generous quotation. One key fact is that the poor and middle class benefit disproportionately from free and open markets:
[A] growing cadre of wonks on both the left and the right have become increasingly hostile to the long-standing U.S. political consensus in favor of multilateral trade liberalization. This hostility, however, is mostly misguided. Although it contains certain nuggets of truth about, for example, Chinese mercantilism or onerous trade-agreement rules, the case for free trade — economic, geopolitical, and, perhaps most of all, moral — is as strong today as it was when Adam Smith wrote The Wealth of Nations almost 250 years ago.
Trade and globalization have provided undeniable economic benefits for the vast majority of American families, businesses, and workers. Most obvious are the consumer gains. Several recent studies have found that freer trade with China, for example, has generated, through increased competition and lower prices, hundreds of billions of dollars in U.S. consumer benefits — benefits that, according to economists Xavier Jaravel and Erick Sager, are the equivalent of giving every American “$260 of extra spending per year for the rest of their lives.” Consumer gains from imports, in general tilted toward the poor and the middle class, are especially tilted toward them when it comes to goods that are made in China and sold at stores like Walmart. The magnitude of such benefits also debunks the well-worn myth that free trade is mainly about cheap T-shirts. Indeed, trade’s consumer surplus is a big reason that Americans today work far fewer hours to own far better essentials than at any prior time in U.S. history.
Then there are trade’s overall benefits for the economy. A 2017 Peterson Institute paper calculated the payoff to the United States from expanded trade between 1950 and 2016 to be $2.1 trillion, increasing U.S. GDP per capita and per household by around $7,000 and $18,000 — with benefits, again, disproportionately accruing to households in the bottom income decile.
What about our industries that are getting crushed by unfair competition? Can’t these wonderful tariffs save them, at least? An overlooked fact — but a fact nonetheless — is that much of what we need to import cheaply are not merely consumer goods, but factors of production that our own industries need for our own manufacturing:
Trade and globalization also support American companies and workers, even in manufacturing. The Commerce Department, for example, has estimated that almost 11 million jobs depended on exports of U.S. goods and services in 2016, and foreign direct investment in the United States — the necessary flip side of our oft-maligned trade deficit — supported millions more. Meanwhile, American companies that adapt and thrive in today’s economy most often do so by making use of imports and global supply chains. The San Francisco Fed, for instance, recently estimated that almost half of U.S. imports are intermediate products purchased by American manufacturers to make globally competitive finished goods; the country’s biggest exporters, therefore, are also its biggest importers.
. . . .
The outcome is not just cheaper stuff but better (and once unimaginable) stuff, better jobs, better companies, and better lives. And it can occur only by letting consumers and their capital seek more-productive ends.
This is why the alternative to freer trade, taken to its extreme, is not $2,000 iPhones; it’s no iPhones at all.
Finally, Lincicome makes the moral case for free trade — and it’s not the abstract one I would make, that tariffs simply represent the government telling its own citizens not to engage in transactions that they want to engage in, to make their lives better. No, Lincicome focuses on the way that tariffs promote crony capitalism:
Indeed, we are witnessing again today just how protectionism breeds elite cronyism and political dysfunction and hurts far more Americans than it helps. Former “big steel” lawyers and executives, now in the Trump administration, dole out tariff protection to their former colleagues who lobbied for it; those well-connected colleagues, in turn, get to decide the fate of their American customers’ requests for steel-tariff relief, even though the steel-consuming customers are a far larger share of the U.S. economy and work force than is the steel industry. And that’s just the steel tariffs. Is it any wonder that trade-related lobbying expenditures over the past two years have skyrocketed? Those on the left who aim to “get money out of politics” and those on the right who talk of “draining the swamp” reveal the weakness of such commitments when they turn a blind eye to the corruption directly resulting from the protectionist policies they support.
Why should certain American industries and workers have a moral claim to government protection? Why should government prioritize those workers’ living standards above their fellow citizens’? American footwear workers, for example, have long benefited from a government policy dating back to the Smoot-Hawley Tariff Act of 1930 that protects their jobs through hidden restrictions on the commerce of other Americans — restrictions that force everyone, including the poor, to subsidize footwear jobs by paying more for their shoes. Perhaps, if the taxes were repealed and Americans could buy shoes from whomever they wished, the nation would owe affected workers welfare or job training. But the workers are not owed the protection itself, and its removal is not an immoral act. It is the right thing to do, and the broader economic and geopolitical gains are just gravy.
Tariffs are a self-destructive act. As I have explained before — in an argument that will be roundly ignored by 98% of commenters on this post — our tariffs mostly hurt us, and China’s tariffs mostly hurt them:
To the notion that we will get reciprocal lowering of tariffs by other countries only when we negotiate for them, Boudreaux uses this analogy: if we were throwing boulders into our harbors, should we stop doing so only when other countries stop throwing boulders into theirs? Again, this goes back to what I described as his central thesis: China’s tariffs against us hurt China more than they hurt the U.S. — and our tariffs against China don’t hurt China, they hurt us. Boudreaux says: “We don’t need other countries to stop hurting themselves for us to stop hurting ourselves.”
To the argument that we have too many regulatory burdens, Boudreaux agrees — but says that nothing is solved by putting yet another governmental burden on ourselves in the form of tariffs.
I’ll leave you with this interesting statistic cited by Boudreaux: two-thirds of the materials that we import are not consumer goods, but rather inputs into American production. To the extent that we restrict and tax those inputs, we raise the cost of American production — which makes us less productive, not more productive.
Boudreaux sums up his position with this simple statement about what it means to oppose tariffs: “We will no longer interfere with our citizens’ decisions on how they spend their income.”
Trump can benefit a handful of Chinese industries, and the American people as a whole, by unilaterally lowering our tariffs on Chinese goods. If Trump manages to get tariffs lowered on both sides through a trade war and threats, that will be a good thing for a handful of crony manufacturers in the U.S. and for the Chinese people as a whole. But if you think tariffs are inherently good — or that it is worth risking our economic gains by imposing tariffs on hundreds of billions of goods — you’re supporting a policy that hurts America’s poor and middle class, hurts more American manufacturers (because of the increased cost of intermediate factors of production) than it helps, and that furthers the interests of a few cronies in limited industries in the United States. You’ll be flying in the face of most economists and 250 years of thinking on free markets.
In other words, you’ll be a sucker for populist propaganda.
Don’t be that person.
[Cross-posted at The Jury Talks Back.]
Trade policy is hard to write about because its not about generalizations and theory. Its about numbers, facts, industries, effects of this tariff over not doing anything, and every industry is affected differently by the current trade policy. IOW, you need to know the detailed facts, and have a detailed analysis. Its complicated.
Its like Corporate tax policy and its effect on the economy. You need to know the details. But people can’t do that when they write articles for the general public. So we get broad theory and general statements and THEORY.
But if you want Theory. Why isn’t China or Japan or Korea or the EU adopting “Low Tariffs” why to THEY think trade surpluses are good
rcocean (1a839e) — 5/7/2019 @ 7:50 amI’m leery of – and no expert on – tariffs and trade wars (BIHSAAHI), but here’s an interesting take in the normally Trump Super Anklebiter NYT, of all places…
https://www.nytimes.com/2019/05/07/opinion/xi-trump-trade-war-china-leadership.html
Colonel Haiku (2601c0) — 5/7/2019 @ 8:03 amTrump’s tariff war with China is not really a bad thing, because he’s not going too far, and maybe he will get some concession from China on something that is truly important, like its spying and forced technology tranfer, and its military build up, – it can’t hurt – and maybe some non-Trump supporting politicians will join in – it’ll make it easier – and it’s better he fight with China than with anybody else – let him have his attention focused on that, and maybe some peole can everage this to mildly affect human rights.
And also it’s good for the economy, because it will scare the Federal Reserve Board into thinking Trump might cause a recession, so they’ll keep interest rates on the low side, and we’ll get 3% to 4% economic growth. This happened already but it needs to continue. And if he settled his fight with China they won’t be scared, so go on.
At least until he gets enough new appointments to the Fed. They are now getting the kind of treatement that nominees for the United States Supreme Court used to get. A new thing.
Sammy Finkelman (30b6b6) — 5/7/2019 @ 8:11 am* and maybe some people can leverage this to mildly affect human rights.
Sammy Finkelman (30b6b6) — 5/7/2019 @ 8:12 am2% here.
DRJ (15874d) — 5/7/2019 @ 8:15 amWhen it comes to something like trade policy and tariffs I don’t think you can really say any option is always the best option. Tariffs aren’t inherently a good thing but sometimes they are the right solution to a specific problem. Globalization and the free flow of goods sometimes hurts the United States and sometimes they don’t. This is an area where a balance between extremes is optimal and that balance can be fluid.
What have we traded for far better essentials? Could we have given up less for marginally better essentials? And are they even better? I know they are cheaper and more plentiful but they don’t always seem better.
We are currently in a trade war with Iran that is destroying their economy and may trigger a civil war. Some people claim we’ve done that to Venezuela. Ignoring this aspect of trade policy and saying free, open, and unrestrained trade is always a good thing is not wise.
Frosty, Fp (c141b1) — 5/7/2019 @ 8:35 amThere’s has been a lot of pressure to go soft on China.
Colonel Haiku (2601c0) — 5/7/2019 @ 8:37 amTariffs may hurt us and China’s tariffs may hurt them BUT
when they tariff us and we don’t tariff them back, they win.
They protect their industries and gain know how; and we lose ours like we lost the modem industry and the steel industry and the textile industry.
Asking them nicely doesn’t make them stop.
Ingot9455 (afdf95) — 5/7/2019 @ 8:42 amCOMPLETELY off-topic, but touching on ethical questions, I got this as part of a “class-action settlement” email:
Emphasis mine. This is a barely disguised legal shake-down. Why is this crap permitted by the bar?
Kevin M (21ca15) — 5/7/2019 @ 8:42 amYou do not have to be a “Trump superfan” to believe either of those two statements. We are back to the “all Republicans” argument, in a different direction.
The protectionist argument has, at times, been a core principle of major parties: the Whigs and Republicans in the 19th Century, and the Democrats in the 20th. None of them were Trump superfans. It also is, or was, policy in many foreign countries, although trends are towards non-tariff barriers these days.
Yes, tariffs like the steel tariffs are partially crony capitalism, partly national security concerns, and partly political ward-heeling. Not a big fan. But lots of Democrats, not being Trump superfans, agree with these tariffs, so the lead paragraphs would be insulting to them.
The second argument — that one may, or should, impose tariffs in order to force changes in behavior, particularly cheating on agreements — is pretty constant in my lifetime, and is EMBEDDED into trade agreements from Ronald Reagan onwards. Again, none of these agreements were written by Trump superfans. Plenty of Republicans, from Bob Dole to the Bushes, have advocated punitive tariffs at times, as have many Democrats, so the lead paragraphs would be insulting to them as well.
Kevin M (21ca15) — 5/7/2019 @ 9:00 amNow, I am NOT a Trump superfan, having never voted for the man, but it is true that “if nothing changes, nothing changes.” The use of tariffs to force changes to badly working agreements, or agreements that one side is dishonoring, did not start with Trump and will not end with Trump.
The argument that Trump is a poor vessel to negotiate these changes is fine, as far as it goes, but we only have one president at a time. This argument should be separate from policy itself.
The argument that Trump is diverging from typical Republican policy is true, but then he was elected to do just that.
The argument that these tariffs hurt American manufacturers, who import parts for their products, is true, but it is also intended, at least in part. There is a whole product ecosystem that has moved from the US to China and Trump is desirous of moving some of it back. If manufacturers are unhappy with these tariffs, perhaps they will begin to source their parts locally. I don’t know if this is a good plan, but it IS a plan and suggesting it is unintended is misleading.
The suggestion that tariffs are necessarily a tax on the recipient ignores the ability of the seller to adjust prices to match. Not all prices (damn few actually) are set due to costs. Many (most?) are set due to what the market will bear in the selling area. Apple could sell iPhones at a significantly lower price and make money. And let’s not even start with drug manufacturers — a common asthma drug that costs $500/month in the US costs $50/month in Turkey. Both are brand drugs by SKG. If a product has a huge markup, as many foreign-sourced products do, the tariff is a tax on the seller, not the buyer, if there is a domestic competitor.
Again, Trump CAMPAIGNED on bringing manufacturing back to the US. One should not be surprised that he is doing things to accomplish that. Sure, he’s incompetent and will likely fail, but that does not mean the tools he is using are necessarily wrong.
Kevin M (21ca15) — 5/7/2019 @ 9:14 amNow, where costs do set prices, such as cars, tariffs ARE a tax on buyers. This is why even left-wing statists like Richard Nixon dropped car tariffs long ago. Similarly, this is why tariffs on raw materials like steel are a bad idea, yet several Presidents before Trump have imposed them. W did it. For much the same crass political reasons that Trump did, except W never won Pennsylvania.
Kevin M (21ca15) — 5/7/2019 @ 9:20 amI’m not crazy about tariffs, however explain why they were relied upon for revenue for the first century of this republic and they were the cornerstone of the GOP’s fiscal policy.
Narciso (f1bece) — 5/7/2019 @ 9:22 amPutting tariffs on countries that have giant trade imbalances with us can be painful to us, but it is proportionally more painful to them. If the idea is to address the trade imbalance and non-market reasons for it (e.g. they let companies there flood rivers with cyanide), then it may be the best plan of poor choices.
Kevin M (21ca15) — 5/7/2019 @ 9:23 amUm, I’ll assume your reference to Lincicome’s “defense of tariffs” was either a typo or I didn’t get the joke.
Paul Montagu (9583ef) — 5/7/2019 @ 9:54 amTariffs are taxes on consumers. Unproven. Shifting manufacturing from USA to foreign country due to a short-term difference in price may help US Consumers in the short term, but hurt them in the long run. Hypothetical: If Japan captures 75% of TV market and destroys US TV industry, what’s to keep them from raising the price as high as US TV makers would have? Nothing.
BTW, Copyright policy and our so-called intellectual property laws are a “tax on consumers” but somehow the libertarians never seem to get upset about that. Nor do they get upset that we “horse trade” and give up certain things to protect Hollywood IP overseas. And granting Cable TV companies quasi-monopolies is a “tax on consumers” but no one seems to care about that either.
rcocean (1a839e) — 5/7/2019 @ 9:56 amHuzzah!
Dave (1bb933) — 5/7/2019 @ 9:58 amAs for “Free Trade” being a Republican or conservative value – give me a break. Republicans were protectionists from Abe Lincoln all the way past WW 2. And then from Ike to Reagan, nobody talked much about free trade or protectionism. There was, in effect, no Conservative policy on “Free Trade”. Some people pushed it as a way to help our allies in the Cold War. Others thought the opposite. Mostly people didn’t care. I cant’ remember Reagan ever talking about “free trade” while he was POTUS. He was too busy talking about the Cold War, Defense, taxes, Business regulation, and social issues.
rcocean (1a839e) — 5/7/2019 @ 10:02 amThe verdict is in on the first round of glorious tariffs:
Trump’s washing machine tariffs are costing Americans almost $100 more per appliance
And from another article on the same debacle:
Trump’s washing-machine tariffs cost U.S. consumers $815,000 for every job created
In other words, Donald Trump (the greatest economic mind who has ever lived!) managed to do 27 times worse than your run-of-the-mill, Obama-style, shovel-ready tax-and-spend Big Gubmint boondoggle.
Great success! Huzzah!
Dave (1bb933) — 5/7/2019 @ 10:10 am13. Narciso (f1bece) — 5/7/2019 @ 9:22 am
because they’re easy to collect, and the federal government did nit need the enormous revenues that an income tax, for instance, would give (except furing the Civil War)
Crony capitalism and corruption – theis also avoided alternatives like land sales (instead they could offer to sell land cheap) or printingor coining money.
Sammy Finkelman (ec94de) — 5/7/2019 @ 10:23 amCompared to the Democrats, the Republicans used to be the free trade party but, even at National Review, some writers (like Williamson) are coming around to this tariff idea. This GOP has morphed into Pat Buchanan’s paleo retro reactionary thinking (except for his anti-Semitism). And you know something’s amiss when Schumer is in Trump’s corner on tariffs and infrastructure, which is neither conservative nor historically Republican.
Paul Montagu (7968e9) — 5/7/2019 @ 10:27 amThe Williamson article you linked is a full-throated defense of free trade…
Dave (1bb933) — 5/7/2019 @ 10:33 am16. rcocean (1a839e) — 5/7/2019 @ 9:56 am
Competition from companies in South Korea, Indonesia, Mexico etc.
It didn’t happen, did it? U.S. television manufacturing pretty much stopped, but prices didn’t jump up. Because there was no monopoly. Even if all companies in China, thanks to its government, act in concert (especially avoiding products that don’t break and last long)
Some people care, especially about copyrights lasting too long. And they’ve got sdome argumnts about it. Of course in the horse trading argument, it’s consumers abroad who are affected. When it comes to trademark violatios it is U.S. consumers who are affected – but the foreign companes cod be honest about being Brand X.
Sammy Finkelman (ec94de) — 5/7/2019 @ 10:35 amAnd speaking of National Review, Jonah weighs in on the same subject, and nails it as usual:
Will the Right Defend Economic Liberty?
Read the whole thing, it’s a great article.
Dave (1bb933) — 5/7/2019 @ 10:45 amI am no Trump superfan, though I fear our host thinks I am. I did not vote for him. Disclosure: I live in CA. It makes no difference for whom I vote as the Democratic candidate will always win a statewide election by a comfortable margin. Adolf Hitler would carry CA if he ran on the Democratic ticket.
I believe that the theoretical and moral case for free trade is sound. However, free trade like perfect competition is a model against which we can compare our present policies. Even Adam Smith thought there should be an exception for national defense.
When we are dealing with other advanced economies we should adopt policies as close to pure free trade as possible, provided the other side does the same. President Trump offered the Europeans a deal where each side would abolish all tariff and non-tariff barriers to trade. The Europeans turned him down. When dealing with underdeveloped countries like Congo or Paraguay we can accept policies that favor them to develop their economies just as we had very high tariffs during the early days of our republic.
China is a special case. Its trade policies towards us are predatory even though we get lots of inexpensive consumer goods from them and there is nothing in our history to match the scale of their theft of our intellectual property. They are also our primary strategic adversary. For chapter and verse, see The 100 Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower, by Michael Pillsbury.
Stu707 (67dc49) — 5/7/2019 @ 10:45 amCrap, you’re right, Dave. I took this sentence as ambiguous: “…the question of whether Republicans should be the free-trade party that they long have been or whether they should embrace a Wallace-Buchanan-Perot-Trump model of populist neo-mercantilism is one that deserves some attention.” But then he came down on the “free trade” side at the end.
Paul Montagu (7968e9) — 5/7/2019 @ 10:48 amI just started reading a new book, Naked Economics. I’m only one and a half chapters in, but on page 4 it mentioned the following statistic:
You see the same pattern in every industry. Competition drives prices down, not up. And a global market makes monopoly pricing by any producer literally impossible.
Dave (1bb933) — 5/7/2019 @ 10:56 amSchumer used to get on well with Michael Savage, let alone Trump, both he and Savage defying Rush Limbaugh on the Dubai Ports controversy (Limbaugh was wary on the call not to sell them to Dubai because he felt that was motivated more by unions than by national security concerns).
urbanleftbehind (5eecdb) — 5/7/2019 @ 11:04 amBTW, Copyright policy and our so-called intellectual property laws are a “tax on consumers” but somehow the libertarians never seem to get upset about that.
Patents are necessary to encourage open publication of an invention, and short-lived to limit the collection period of the inventor.
Copyrights are also necessary, but the duration of copyrights is extreme. There is also an implied contract (we grant you a fix monopoly period in exchange for public domain afterwards) which has been violated twice in my lifetime when the receipt by the public domain was reneged on, by an act of Congress*.
Intellectual property is unlike any other, since it cannot be traded in any way without government protection. While this system still holds for patents, it has broken down almost entirely for copyrights. Nearly any book, audio, music, television or film production is available for “free” if you know where to look. This is unlikely to change, short of massive government intrusion in the Internet.
———————-
Kevin M (21ca15) — 5/7/2019 @ 11:06 am* The idiot (Lawrence Lessig) who argued it in the Supreme Court failed to bring up either the contract or the Takings argument, being congenitally unable to argue something in the direction of the Scalia wing.
I cant’ remember Reagan ever talking about “free trade” while he was POTUS.
Actually, opening up global trade was a signature accomplishment. If any President is responsible for China’s rise to economic power, it is Reagan. And it’s not just “conservatives” — Clinton was just as strong on trade as Reagan.
Kevin M (21ca15) — 5/7/2019 @ 11:09 amAlways remember that trade wars are better than war wars.
Kevin M (21ca15) — 5/7/2019 @ 11:21 amPatterico, I read what you wrote, I didn’t follow all the links but I’ve read many of your previous posts on trade and I think we mostly agree on policy. Free trade is a good thing and that we should have more of it.
That said I think your logic is flawed. You wrote the following and it seems to be your thesis statement for the post.
I think there are 4 things that i feel should be considered.
1. Tribal affiliation. Republicans are mostly defined by Trump, not defending Trump means not defending republicans. Therefore whatever Trump does is good. If Trump did a not good thing that would mean Democrats are right about something and that’s unpossible.
2. Game theory, if Tariffs are a means to the end of free trade than it’s necessary to support them vigorously.
3. The value of Strength and Respect. I think many Republicans don’t feel they/their tribe are accorded appropriate respect. Remember the complaints on Obama’s apology tour? Also not the venom associated with the insult “flyover county”
4. Fairness. Much of modern republican messaging has to do with fairness and how the world isn’t treating Republicans fairly.
–It’s not fair that accusations of sexual misconduct can wreck a man’s career.
–It’s not fair that minorities get any sort of preference in college admissions.
–It’s not fair that Hillary wasn’t prosecuted but people want to hold Trump to rule of law.
–It’s not fair that the government doesn’t help the economy in my small town and I had to move to get a decent job.
There’s a longer list, and it’s an argument that isn’t unique to Republicans. But Trump is very focused heavily on this argument; that it’s important to be treated ‘fairly’
A lot of the Trump fans I talk to think tariffs are good thing because they punish a country that isn’t treating us fairly.
So I think Trump fans would admit to agreeing with your thesis statement if it were modified as follows.
Or they might if you weren’t guilty of criticizing Trump and therefor wrong about absolutely everything. /snark
I haven’t read all the comments so I apologize if this point has already been made.
Time123 (ae9d89) — 5/7/2019 @ 11:22 am27. Dave (1bb933) — 5/7/2019 @ 10:56 am
Or even a cartel, like OPEC, eventually, unless it’s helped along by regulation, as with prescription medicines. *
———
* where imports are actually prohibited, and Congress declined to change the law.
The closest we came to a monopoly, with Beijing tightening the screws, was with rare earth metals, which also have only a limited number of places that they can come from. They maybe tried to tighten the noose too early. (it was only environmental and other regulations, and possibly fear of lawsuits, and the fact that China was selling them more cheaply that caused China to get such an overwhelming share of the market.)
Now maybe what also helped spur resistance was that most people thought that Beijing was interested in something more than money.
https://io9.gizmodo.com/how-chinas-rare-earth-weapon-went-from-boom-to-bust-1653638596
https://www.theverge.com/2018/4/17/17246444/rare-earth-metals-discovery-japan-china-monopoly
And with OPEC the only separate producers were governments. Even so, the cartel is not really working.
Sammy Finkelman (ec94de) — 5/7/2019 @ 11:32 amIt should be pointed out that Ronald Reagan, the modern champion of global free trade, imposed tariffs on imported cars in order to get them to open manufacturing plants in the United States. And they did so, lickety-split. Reagan did NOT demand they be UAW jobs, however.
Kevin M (21ca15) — 5/7/2019 @ 11:33 amAnd a global market makes monopoly pricing by any producer literally impossible.
Speak to Intel, which had a global monopoly from the mid-90’s (when they crushed AMD) until just recently. Now they will have to crush AMD all over again. Should take about 5 years.
Kevin M (21ca15) — 5/7/2019 @ 11:35 amIt’s not a new book. I borrowed the book “Naked Money” by the same author, Charles Whelan, and that book was published in 2016 and lists “Naked Economics” as one of his earlier books. Also “Naked Statistics.” Those are numbers 2 ad 1 out of five. I thought already about getting one or more of his earlier books.
I suopose you mean, new to you.
Sammy Finkelman (ec94de) — 5/7/2019 @ 11:39 amKevin M @35. There are elements of intellectual property here.
Sammy Finkelman (ec94de) — 5/7/2019 @ 11:43 amKevin M @ 29. Lawrene Lessig has written that he made a mistake in making a purely legal argument.
http://www.abajournal.com/magazine/article/the_education_of_larry_lessig
Maybe he missed a few good legal arguments too.
It looks like Congress is not disposed to increase copyright length again, so works started falling again into the oublic domain on January 1, 2019.
https://www.smithsonianmag.com/arts-culture/first-time-20-years-copyrighted-works-enter-public-domain-180971016/
Sammy Finkelman (ec94de) — 5/7/2019 @ 11:55 amWhen did free market market economists ever care about consumers, except as sheep to be fleeced down to bare skin? It’s all supply side, with game theory tacit collusion in the place of competition, planned obsolescence, and marketing gimmickry for every last penny on the credit card.
nk (9651fb) — 5/7/2019 @ 12:50 pmDave (19)
And therefore all tariffs are bad? As I said, if there is no room to drop prices it’s a tax on consumers, but not everything is like that. And even then it can have a long-term gain. Not everything is like your cherry-picked example.
Reagan did the same thing with cars, and right when he did it you could make the same sneer. But today most “foreign” cars are manufactured in the USA. What do you suppose the cost of those tariffs is now, averaged over 30 years and hundreds of thousands of jobs?
If you want to argue that Trump is an idiot, then do so — I won’t debate it — but don’t conflate policy with personalities.
Kevin M (21ca15) — 5/7/2019 @ 12:51 pmThere are elements of intellectual property here.
Well, when Intel crushed AMD in the 90’s AMD had a cross-licensing deal with Intel that Intel deeply regretted.
So what Intel’s boss (Craig Barrett) did was go to Asia, just before AMD released a new product line, and offer sweetheart deals to all of AMD’s partners (motherboard makers, chipset vendors, computer vendors, etc) to pull out of the product launch and cancel their AMD lines. Which they did and AMD’s sales collapsed at a time they had just invested in a new fab. They sued Intel and settled, a decade later, but the damage was done.
Kevin M (21ca15) — 5/7/2019 @ 12:57 pmLincicome’s shoe example is particularly risible. What American shoe workers? What Smoot-Hawley? What American-made shoes can you buy? What I see is Nike selling Chinese-made sneakers for $100.00 a pair, that people used to buy for $1.00 each (yes, each) at the Woolworth’s.
nk (9651fb) — 5/7/2019 @ 12:58 pmSammy, Lessig made a 1st Amendment argument primarily, arguing that the “Sonny Bono” copyright extension infringed on speech rights, but it was also true that any copyright infringed on speech rights. He did this because he thought that the conservatives would never side with him, so he tailored his arguments for Breyer, RGB, etc. This at a time when contract and property rights were big with the Scalia wing.
The Act was a Taking from the public domain and/or a breach of the implied contract regarding when things would enter the public domain in exchange for the limited monopoly.
Still is.
Kevin M (21ca15) — 5/7/2019 @ 1:04 pmI meant “new” as in: “I bought it two days ago.”
Although the edition I’m reading is new (published in 2019, and it makes reference to Trump’s rhetoric and policies).
Dave (1bb933) — 5/7/2019 @ 1:10 pmSmoot-Hawley was at a time when nearly all foreign trade was raw materials, metals and grains. Maybe some manufactured clothing (oddly coming from the first world to the third). Different times, different situations. It gets a lot of blame, but the change in foreign trade was of little import to the Depression.
The problem in the 20s and 30s was economic dislocation, particularly on the farms. The automobile, telephone and electric power doomed every animal-based industry and threatened all their support industries. What was “local” changed as drastically as it had in the 1800s with the railroads. Information could travel easily, and a large farm with trucks could sell for cheaper than a small farm without. This really wasn’t sorted out until the reindustrialization of WW2.
Kevin M (21ca15) — 5/7/2019 @ 1:12 pmI think you need to read that again. Williamson is one of the few conservatives out there who has read Mises and still fully commits to free trade and more power to him.
Patterico (908489) — 5/7/2019 @ 1:15 pm@39. Yep.
At least Henry Ford was savvy enough to know to pay his workers enough in wages to afford to purchase the very product they were assembling.
DCSCA (797bc0) — 5/7/2019 @ 1:16 pmAll I know is this. When we first moved down here in the summer of 1968, the Rio Grande Valley was the agricultural center of the United States and the citrus capital of the world. Perhaps some of you remember TexSun orange juice. It was the No. 1 best selling brand, and it came from here. Or maybe some of you have enjoyed a ruby red grapefruit. It came from here. I knew the farmer who grew it, and he used to ship a crate to the White House every month.
Christmas Eve, 1983, I will never forget that night. An arctic blast blew in from the north, temperatures dropped to 16 degrees. Woke up the next morning, and everything was covered in inches of ice. To give you an idea of how severe the freezing was, an appliance store downtown had a large sign on top of a 300 foot steel pole, so that it could be seen from the highway–the ice was so thick and heavy that the pole bent and the sign crashed through the roof of the store, and all the appliances inside froze.
Temperatures didn’t rise above the thirties for weeks, and all the crops died. This was the arctic blast that wreaked havoc throughout the Midwest corridor and ruined many a farm, but it hit South Texas particularly hard. It’s one thing to replant say a corn or wheat field; a farm like that can return to profitability in a year or two. To replant a citrus orchard takes at least a decade.
There were 44,000 foreclosures within three months, and thousands upon thousands to follow in the months to come. Banks failed, businesses closed, it was a complete economic disaster due to a freak weather event. It was what led to the formation of corporate farms–private equity firms swept in and bought large tracts of land from distressed farmers on the verge of bankruptcy.
Economic growth and development didn’t return to the Rio Grande Valley for over a decade. Most of the foreclosed farms and orchards were fallow, until NAFTA transformed the region from an agricultural to a trade center of the country. It was incredible to watch, really. Over fifteen years, suddenly there was all this new construction–subdivisions with new homes, an entire upgrade of the highway system, businesses and restaurants sprouting up everywhere–new homes, new jobs, everyone making money.
That was the result of trade. It benefits all parties involved. As a libertarian, I believe in free people living freely in a free market, with an open exchange of ideas, goods and services. But as a learned realist, I know that utopia is nowhere and dystopia is everywhere.
Trump is an absolute fool on trade, because he doesn’t believe in it. His idea of a deal is what benefits him, to hell with the trade partner. He’ll screw the other guy every time, as long as he gets to pretend to be winner. The long list of lawsuits against his business practices proves that.
Tariffs are not paid by foreign companies. They are paid by American consumers. All this talk of a strong economy is a lie. Stock market prices are the result of buybacks, not real money from investors. The employment rate is due to gig workers–part-time and self-employed workers who are counted as “employed.” It’s all an illusion. The reality is that businesses and consumers are paying higher prices, in materials and supplies–they are being taxed to produce and live!
Trade wars close off markets to American exporters, particularly in agriculture. Farm foreclosures are at the highest outside of a freak weather event. Home building is at the lowest in decades. This is a strong economy? With spiraling deficits and debilitating debt.
Trump is a total fraud.
Gawain's Ghost (b25cd1) — 5/7/2019 @ 1:18 pmKevin M, you have spent several comments refuting something you seem to think I said, but that I never did: that only Trump superfans support tariffs.
Patterico (908489) — 5/7/2019 @ 1:18 pmPaul, thanks for pointing out the typo/brain flatulence.
Patterico (908489) — 5/7/2019 @ 1:20 pmI wish we made our own plastic pieces of junk. eff the chicoms and everyone doing business with them. I try never to buy Chinese schiff.
mg (8cbc69) — 5/7/2019 @ 1:41 pm41. The intellectual property factor limited the number of competitors.
What you’re telling me about Intel pulling the rug out from AMD however isn’t something based on intellectual prroperty.
It sounds like a conspiracy in restraint of trade – AMD could have have found other manufacturers but that would have taken time, and this was a product with a limited lifespan.
Sammy Finkelman (102c75) — 5/7/2019 @ 1:46 pmHere’s what’s going on with new drugs:
https://www.newser.com/story/274867/new-drug-could-cure-horrible-disease-now-brace-yourself.html
I think we need something besides patents – maybe offering orizes or buying out the patent.
And then there’s new antibitics. Expensive to get through the drug regulatory process, and then nobody wants to use them. Something is very very broken here. It wasn’t broken in 1960.
And that’s all before and WITHOUT “Medicare for all” better described as “Medicaid for All”
Sammy Finkelman (102c75) — 5/7/2019 @ 1:50 pmVery few shoes are now made in the United States. Those made in China, like most goods made in China are designed to withstand shipping but not a lot of normal use.
There probably has to be a whole secret government run institute working on this and chiding and oputting pressure on manufacturers if they make something that doesn’t need to be replaced. It is in the interest of an individual manufacturer to do so, but not of the country as a whole if China is pursuing a mercantilist policy.
But they’re getting out of cheap goods, mainly because they are running out of workers, (adn there isa lot of age discrimination in China) and some Chinese companies are now relocating their factories to Cambodia.
Sammy Finkelman (102c75) — 5/7/2019 @ 1:57 pmBoudreaux uses this analogy
A circular argument, starting with the premise that tariffs are only destructive (“if we were throwing boulders into our harbors”) and proving that tariffs are a bad idea.
Question: What lever would you use to get an intransigent trading partner to the table? Admiral Perry’s method?
Kevin M (21ca15) — 5/7/2019 @ 2:08 pmGawain’s Ghost (b25cd1) — 5/7/2019 @ 1:18 pm
Probably climate change but they don’t realize that yet.
The increase in the level of water vapor in the atmosphere (about 5% since 1900 or so) creates more variability in climate, and that’s the important effect. Not the slight increase in average temperature, but the increase in the standard deviation of weather, both as to temperature and as to precipitation.
There’s nothing much anybody can do about it, except prepare, and certainly not by indirect means, and nobody even understands it.
Sammy Finkelman (102c75) — 5/7/2019 @ 2:08 pmI wear two different shoe sizes, so I buy two pairs of the same shoe. My last two pairs, differing only in size — one said “Made in China” and the other “Made in Vietnam”.
nk (9651fb) — 5/7/2019 @ 2:11 pmKevin M, you have spent several comments refuting something you seem to think I said, but that I never did: that only Trump superfans support tariffs.
So, if I said:
Dolts: “Trump is an immoral person.”
You would not take offense because you are not a dolt?
Casting an opinion I might have, into the mouths of people I don’t much like, seems pejorative towards the opinion, if not all holders of the opinion.
Kevin M (21ca15) — 5/7/2019 @ 2:11 pm““Mao staged Ping-Pong diplomacy to break the ice in 1971, and President Nixon supported him in his standoff against the Soviet Union. Deng Xiaoping went all-out to woo the United States, and President Jimmy Carter switched recognition of China from Taipei to Beijing in 1979. During the 1980s, the C.C.P. leaders Hu Yaobang and Zhao Ziyang invited Milton Friedman and other American economists to visit and provide advice; after that, American capitaland technology started flowing into China. In 1997, Jiang Zemin made an eight-day visit to the United States — at one point, while in Williamsburg, Va., putting on a three-cornered colonial hat. Bill Clinton then gave China a strong push to enter the World Trade Organization in 2001.
The Hu Jintao years, 2003–13, saw China’s most tactful exploitation of American openness (and naïveté). Cheap Chinese imports created runaway bilateral trade deficits for the United States. The Confucius Institutes, a network of language schools cum influence agencies, began to take root in American universities and high schools. (Today, there are more than 100 throughout the United States.) Chinese venture capitalists flooded Silicon Valley with money raised in American financial markets — then quietly siphoned off cutting-edge American expertise and injected it into China’s own high-tech hub.
But Mr. Xi has been aggressively hard-line. Under him, anti-American rhetorichas spread in official media. The Chinese government has been explicit about wanting to challenge the United States’s military presence in Asia. It has made aggressive moves toward Taiwan and in the South China Sea. It has sent Chinese battleships through American waters off the coast of Alaska. (It claimed to only be exercising the internationally recognized right of “innocent passage,” but the move clearly was a show of force.)
State authorities in Beijing try to co-opt members of China’s vast diaspora, hoping to develop a network that will facilitate political infiltration into other countries and high-tech transfers out of them. To this end, they resort to both overt schemes, like the Thousand Talents Plan, an official headhunting program, and covert tactics overseen by the C.C.P.’s influence machine, the United Front.
These efforts have set off alarms among some Americans. In 2017 and 2018, two groups of blue-ribbon scholars and ex-officials from previous United States administrations advocated a fundamental change in America’s view of China. Their members were moderates and mostly well-disposed toward China. Yet some of their recommendations dovetailed with the views of the Trump administration hawks who consider China to be America’s number-one enemy and security threat. Mr. Xi, apparently oblivious to this sea change, was caught unprepared when Mr. Trump hit China with a tariff war.
The dispute is having a knock-on effect elsewhere in Asia, Australia and New Zealand, and Europe. After a summit in Brussels last month, China agreed to grant European Union countries “improved” market access, stop the forced transfer of technology and discuss the possibility of curtailing state subsidies to Chinese companies, which, other governments say, gives them an unfair competitive advantage. Although these concessions were presented in the mild, mutual-promise language of a joint statement, they were a clear setback for China and will blunt its global ambitions.
Why is all of this happening under Mr. Xi? History suggests an answer…”
https://www.nytimes.com/2019/05/07/opinion/xi-trump-trade-war-china-leadership.html
Colonel Haiku (2601c0) — 5/7/2019 @ 2:30 pmYeah, Dave busted me on that, too. Mea culpa.
Paul Montagu (7968e9) — 5/7/2019 @ 2:33 pmAt the end of 2017 I discovered that BA Mason stopped manufacturing my shoe size in the style I wanted. I couldn’t my size and I was afraid they were discontining everything so I ordered what wasn”t quite right. But later I found another size that fit – up one size and down one width. It seems like maybe they are not discontinuing the whole thing but just cut back on sizes. Before that I found periods of time when something had to be back ordered so I had another pair left over from 2016.
Anytime you order something new by mail you risk getting several things that don’t fit or are not to your liking till you find what you want.
Chinese manufacturing spoiled the slacks I used to buy (Botany 500) They kept on making different defects (now the stiching from the pockets comes undone so there’s a whole, then the buckle comes off. Blair finally discontinued it.
And I don’t think Blair understood what was the real cause of the decline in sales. There had not been any trouble for years – then maybe the planned obsolescence people got involved and gave secret orders to the company in China with the idea of increasing exports. It has to be the government.
Sammy Finkelman (102c75) — 5/7/2019 @ 2:35 pmLessig’s own account of why he lost the case:
http://www.legalaffairs.org/issues/March-April-2004/story_lessig_marapr04.msp
I think though, this has reached such publicity that Congress will not be (quietly) bought again – the lobbyists were ratcheting Europe and the United States, extending it here and then using that as an argument to extend it there, because works copyrighted by one plae didn’t get the extension on the other unless there was reciprocity.
Sammy Finkelman (102c75) — 5/7/2019 @ 2:49 pm@ rcocean, who wrote:
What’s the dictionary definition of “tariff”? The dictionary — every dictionary — says it’s a “tax on imports or exports.”
Who pays it? In the case of an import, it’s the importer of record. Just like shipping, it’s an expense incurred by that importer, and unless he wants to go out of business by absorbing expenses that go unrecouped, he’s going to pass the expense, dollar for dollar, along to the consumers he sells to as part of the purchase price.
Now it’s proven.
I encourage you to learn the definition of basic terms before you start commenting about them on the internet, lest you leave this sort of evidence of your lack of knowledge of basic terms for public view.
Beldar (fa637a) — 5/7/2019 @ 2:51 pmSomebody must finally take a stand on the theft of intellectual property, the forced transfer of technology and other areas that disadvantage America. If China is not playing by the rules, is ignoring morals and ethics or is not operating within the parameters of agreements in good faith, what must we do?
Colonel Haiku (2601c0) — 5/7/2019 @ 2:54 pm“I don’t know, but tariffs or a trade war are not the answer” is no solution.
Colonel Haiku (2601c0) — 5/7/2019 @ 2:55 pm59.
His answer is that Xi is seeking global dominance – which would go with his attempt to become an absolute dictator without term limits (as had been the practice since Deng Xiaoping, also known as Teng Hsiao Ping.)
I think that, Xi is actually dooming the Communist Party/military rule, because he will have no successor, and now there seems to be signs he is having health problems at an unusually early age for a Chinese leader. (they all seem to have a diet or something that can let them live even to 100 – Madame Chiang Kai Shek because of her close family ties to the Chinese leadership, also lived to an extraordinary old age. Even people on the outs, like Li Rui, who died at the age of 101 on February 16, Beijing time, have this extended lifespan. John D. Rockfeller Sr (1839-1937) probably followed a primitive version of this diet from the time he was in his 60s. The key is not really calorie restriction, and not even intermittent fasting, but low calorie days or long periods withot meals.)
But Xi seems to be having Hillary Clinton type problems.
https://www.wsj.com/articles/xis-unsteady-steps-revive-worries-over-lack-of-succession-plan-in-china-11556011802
https://www.mechon-mamre.org/p/pt/pt2637.htm
https://www.mechon-mamre.org/p/pt/pt1040.htm
Of course, there might be some help from some doctors, I don’t know. Xi may be terrifying people at high rank in China.
Sammy Finkelman (102c75) — 5/7/2019 @ 3:19 pmbeldar @63.
I think what rcocean and Kevin M and others are discussing is what is called the incidence of taxation.
https://en.wikipedia.org/wiki/Tax_incidence
Sammy Finkelman (102c75) — 5/7/2019 @ 3:24 pmTrump has argued that tariffs are paid by the country from where the tariffed goods come from, and in that way Mexico will pay for the wall. But that’s just Trump trying to argue his way out of a hole. He didn’t even do the math,.
Sammy Finkelman (102c75) — 5/7/2019 @ 3:26 pmKevin M has argued that when a seller is already charging a windfall price for him, but that price is as high as he can go and is limited by domestic competition with higher costs, the tariff is paid by the seller.
I guess that could be split between the importer and the foreogn manufacturer but it is not paid by the consumer
Sammy Finkelman (102c75) — 5/7/2019 @ 3:31 pmYou free traders LOST! Tariffs GOOD! Free traders BAD! Your destruction of the american workers is over! Free trade is treason to this country republican base is now populist. Michigan, pennsylvania and wisconsin says go to hell free traders!
lany (bb4b89) — 5/7/2019 @ 3:35 pmSammy – A couple years ago 65% of all New Balance shoes were made in the U.S.A.
mg (8cbc69) — 5/7/2019 @ 3:35 pmDon’t know what it is now.
Even without someone else selling the same shoddy goods at all, there is still a break point where consumers will choose to do without rather than pay the price.
For those who pay the price until they can’t pay no more, the money will go into U.S. government coffers and not PLA* coffers, so it’s not all bad.
If there is a competitor who is not subject to the tariffs, that’s even more less bad.
*Officially, the People’s Liberation Army owns around 50% of Chinese manufacturing. It used to own almost all of it.
nk (9651fb) — 5/7/2019 @ 3:42 pmso what is the cost of the loss of manufacturing, to working class African americans, latinos and whites, is that a possible reason why social tensions have become so explosive, where is the reciprocity, with our trading partners, don’t ask biden his son had the Chinese state avionics company buy into a major parts supplier,
narciso (d1f714) — 5/7/2019 @ 3:45 pmThere appears to be fairly broad support for the president’s position on this… at least with China… this one tariff issue, given all China’s abuses that have brought us to the current situation.
Colonel Haiku (2601c0) — 5/7/2019 @ 4:00 pmHow about a chopsticks only tariff?
mg (8cbc69) — 5/7/2019 @ 4:09 pmMSG, mg…
Colonel Haiku (2601c0) — 5/7/2019 @ 4:24 pmThe general theory is correct. High standing tariff barriers are a terrible idea. All they do is allow domestic manufacturers to get lazy. Free trade, where the best of one country is exchanged for the best of another, is the best possible regime.
One-sided trade, where one country gets cheap goods while being unable to sell in the other market is beneficial for a time, until dependence results. I could just as easily say that receiving welfare and giving back no work is a better deal for the recipient than exchanging work for pay. But the same sort of dependence results. As we see now with domestic companies complaining that their access to cheap parts from China is blocked. Cold turkey sucks.
Trump is trying to force a change in how China does business overseas, the only peaceful way possible. China has trouble retaliating as they don’t BUY enough and what they do buy, they have to buy.
Kevin M (21ca15) — 5/7/2019 @ 4:43 pmTotally! If you ignore everything else I said in this post and the one I linked. Which you did. As I predicted.
Patterico (716a38) — 5/7/2019 @ 5:09 pmIf people are going to ignore the arguments I already made, i am going to ignore those people. Only people who demonstrate they actually paid attention to what I have already said, and try to grapple with it, deserve a substantive response.
Patterico (716a38) — 5/7/2019 @ 5:11 pm“Tariffic:” —
https://www.nytimes.com/2019/05/07/us/trump-tax-figures.html
Reaaaaaaaaaaaaaaaaaaganoics!
DCSCA (797bc0) — 5/7/2019 @ 5:12 pmI think I demonstrated that I read your post. Any response?
Time123 (d54166) — 5/7/2019 @ 5:17 pmKevin M, if you can correctly state why you think I believe the analogy is apt, and then mount an argument against it, I will answer your question. I doubt you can get past step 1. That would require you to demonstrate you have understood my arguments, and you don’t appear to be interested in them. You just want to state your opinion while disregarding my post. Not playing that game.
Patterico (716a38) — 5/7/2019 @ 5:17 pmTime123,
Later. Headed into a meeting.
Patterico (716a38) — 5/7/2019 @ 5:18 pm“The Art of The Steal” 1985-1990: per NYT– Trump lost more money than nearly any other American taxpayer.
‘Roll out those, lazy, hazy, crazy days of Reaaagan….’ – apologies to Nat King Cole
DCSCA (797bc0) — 5/7/2019 @ 5:24 pmWe can probably survive a trade war with China, though certain industries will take a hit and people will probably spend a little more on cheap Indonesian junk instead of cheap Chinese junk. Can we survive not having a trade ware with China? IDK. Bill Clinton was way way too hasty, IMO, in opening our markets to China. I don’t know if he was naive, or just didn’t realize how quickly a billion people under government enforcement could build infrastructure, or what, but he seems to have underestimated that speed a which China was able to overwhelm our industries with their cheaply produced items but do tarriffs solve that problem? I don’t know. Or does it even matter? Again, IDK. A lot of our industrial jobs were lost to automation, so even if industry came back to the US, the decent paying jobs wouldn’t necessarily.
Nic (896fdf) — 5/7/2019 @ 6:09 pmYet another imaginary contradiction. Patterico, there wouldn’t be a contradiction in those two statements even if the same person said both of them, and you didn’t give us an example of anyone who did.
David Gudeman (fd21bc) — 5/7/2019 @ 6:21 pmTotally! If you ignore everything else I said in this post and the one I linked. Which you did. As I predicted.
It is impossible to respond to the entire post, which has a number of moving parts, let alone ALSO encompass the things you linked (rather than the excerpts you chose). In that part, I was responding to Boudreaux’s analogy which assumes his argument: that tariffs are destructive only, or even mainly, to those imposing them.
This is NOT TRUE in many cases. Only in cases where the seller’s price is constrained by cost (cars, washing machines, other goods with many vendors) is this mostly true.
If you put a $50 duty on iPhones, the price afterwards would not change, any more than it would change if China put a $50 tax on it, because there is about $400 raw profit to work with and Samsung is right there with their phones to compete.
Most products in the marketplace sell for what they sell for due to external factors. Nabisco has many different crackers, costing different amounts to make, yet they all sell for the same price in the same size boxes. Sometimes they go on sale, and Nabisco still makes money. They just cannot price them too much higher than the store brands.
A general high tariff policy is a bad idea. This is easy to prove. But the idea that individual tariffs are always bad is a religious belief that is not supported by history, economics or logic.
Kevin M (21ca15) — 5/7/2019 @ 7:31 pmAs for the analogy (I assume we are talking about Boudreaux’s) he suggests that [since tariffs are like self-mutilation] we should not mutilate ourselves while demanding that our adversaries stop mutilating themselves. Stated like that it, of course, makes no sense to do so. I simply object to the implied assumption that this is what we are doing when we impose tariffs in a trade war. The premise does not hold and the rest falls.
I specifically separate this case from protectionist high tariffs imposed as a matter of course, which are indeed self-destruction, and protectionist tariffs imposed for so-called national security reasons, since most of the time it’s for cronies or ward-healing.
What Trump (or, I hope someone with some wit) is doing is not protectionism, it’s dealing with a bad actor in international trade in a way that does not involve guns.
Kevin M (21ca15) — 5/7/2019 @ 7:45 pmYay!
Uh-oh.
K. Doesn’t sound like you take this any more seriously than I do.
Yeah, so, like I said, the post isn’t really about any particular negotiation. I believe, and I have included in this post and the linked post several reasons (ignored by Kevin M because hey who can respond to everything?) to support my position, that tariffs imposed by the U.S. (for the most part) hurt the U.S. and tariffs imposed by China (for the most part) hurt China. But maybe China is as ignorant about these facts as Trump and many people who support him. If this ends up with fewer tariffs all around, that’s a good thing — unless you support tariffs for their own sake, which seems to be the contradictory position of many who support the game theory, um, theory.
Who inspires more respect than the fool Donald J. Trump? Again, I assume you’re not taking this seriously.
OK, this is (again) based on a fundamental misunderstanding of who is hurt by tariffs, but that is clearly a huge mental block for a lot of people, and it seems that little I say can change this.
Actually, they punish US for the most part — which I took great pains to explain, using facts ignored by the likes of Kevin M. Again: the reigning assumption is our tariffs hurt China and China’s hurt us. That is the very argument and assumption I am opposing, and I laid out and linked an awful lot of evidence to back it up — evidence that people not only seem to ignore, but that doesn’t even allow them to correctly articulate what my argument is.
So: our tariffs don’t hurt China. They hurt us. Free trade helps us. I don’t know how much more plainly I can say it.
Patterico (115b1f) — 5/7/2019 @ 7:50 pmWhat I am asking is for you to show the slightest hint of understanding as to why Boudreaux and I believe it’s self-mutilation. It’s not enough to state that we do, and then insultingly dismiss the argument with a wave of the hand by calling it akin to a religious belief. You have to show that you understand (not agree, but understand) why we think this. If you can’t be bothered, then let’s end the discussion.
Patterico (115b1f) — 5/7/2019 @ 7:52 pmAnd don’t tell me that there’s no way to know why we think that. I spent an awfully long time explaining it.
Patterico (115b1f) — 5/7/2019 @ 7:53 pmI am convinced by your naked assertion, unaccompanied by evidence or logical argumentation, that the statements are not in contradiction. Thank you so much for your exceedingly valuable contributions to the discussion here, as always!
Patterico (115b1f) — 5/7/2019 @ 7:54 pmThe free market, unhampered by government, is bad because you can get dependent on its benefits, as shown by the current example in which government has hampered the market and taken some of those benefits away.
Got it!
Patterico (115b1f) — 5/7/2019 @ 7:56 pmSee if you can guess why I would say your analogy doesn’t fit. The problems with it are so glaring that I feel annoyed at the notion that I should have to explain them.
Patterico (115b1f) — 5/7/2019 @ 7:58 pmalmost half of U.S. imports are intermediate products purchased by American manufacturers to make globally competitive finished goods
All this does is show how dependent we have become on low-priced products from China. In an earlier age, the supply chain for a product was mostly domestic. Bit by bit, each little widget started being made in China, subassemblies started being made in China, and soon enough even things finished in the USA were composed of parts made in China and the entire manufacturing infrastructure in the US had disappeared.
This is dependence plain and simple. And it isn’t an accident — this has been the Chinese plan all along. I’m not sure how much of this can be changed; it will depend on the Chinese and what WE are willing to settle for. I would rather Ted Cruz was doing this negotiation instead. To those who feel that Cruz would never utilize tariffs to get China to the table, I think you’re wrong. Sadly, we may never know.
Back in the 80’s, when Japan was eating our lunch in car sales, Reagan imposed duties. Not to protect GM and Ford, but to get Japan to build cars here. It worked, in part because Reagan didn’t hire many fools. To their credit they told the UAW to GFT and Reagan had no problem with that either.
Kevin M (21ca15) — 5/7/2019 @ 7:59 pmSo: our tariffs don’t hurt China. They hurt us. Free trade helps us. I don’t know how much more plainly I can say it.
They hurt both us and China.
Kishnevi (410e69) — 5/7/2019 @ 8:00 pmThey hurt us for the reasons you state. They hurt China because they cause fewer purchases of Chinese goods
Colonel Haiku, please end the long copy-pastas. Give us a link and no more than 2-3 paragraphs in the future please. Comments that violate this rule will be summarily deleted.
Patterico (115b1f) — 5/7/2019 @ 8:02 pmDo me a favor. Pick the 5 things closest to you that plug into the wall or run on batteries. Examine each for the label saying where it was made and report back. I’m serious.
Patterico (115b1f) — 5/7/2019 @ 8:04 pmWhat I am asking is for you to show the slightest hint of understanding as to why Boudreaux and I believe it’s self-mutilation
Because you believe it is a tax on our people, that all the costs of American tariffs are paid by Americans. Possibly also because you believe that tariffs allow US producers to remain lax — that would be the “unfair competition” claim. You’ve said these things more than once, so if there is something more subtle than that, let me know.
By the way, please do acknowledge that I am not referring to steel tariffs (which are terrible for the reasons you state) or other pure protectionist tariffs. I am ONLY objecting to two things: 1) The idea that all tariffs harm Americans (they don’t all) and 2) that there is no role for tariffs in changing trade behaviors.
Kevin M (21ca15) — 5/7/2019 @ 8:05 pmplease end the long copy-pastas. Give us a link and no more than 2-3 paragraphs in the future please. Comments that violate this rule will be summarily deleted.
Thank you. I would also prefer that some value be added as well.
Kevin M (21ca15) — 5/7/2019 @ 8:06 pmIs it not a tax on our people? Are the costs not paid by American consumers? I know the dolt Trump thinks they are paid by Chinese companies, but he’s a fucking dolt and he’s wrong. Do you disagree that we are the ones who pay?
And yes, all protectionism protects those who can’t satisfy consumer desires as efficiently as those who can. And all protectionism harms the division of labor which is at the center of the genius of the free market and the benefits it brings. Do you disagree?
I’ll acknowledge it if you say so. Why are steel tariffs different?
Which tariffs manage not to harm American consumers? Are there magical tariffs that don’t require otherwise willing American consumers to pay more than they would pay without them?
As for changing behaviors, I responded to Time123 above that if this dopey strategy is the first successful negotiation Trump ever pulls off as President, then great. It will depend on China being as ignorant about the effects of tariffs as Trump is, but maybe they are and maybe that will work, and if so then great. I said in the post this is not about any one negotiation. It’s about the fact that tariffs suck, period.
Patterico (115b1f) — 5/7/2019 @ 8:17 pmShorter. I think statement #1 is idiocy. Protectionist tariffs are harmful EVEN IF they do not cost American’s any money. They create a wall behind which domestic producers become less and less competitive.
Statement #2, in general — that
Kevin M (21ca15) — 5/7/2019 @ 8:18 pmTrump’sa tariff war with China is agoodnecessary thing, because it will enableTrumpa well-qualified trade negotiator to make aGgreatDdeal with China that will lower tariffs on both sides.If I punch you in the nose and break your nose it hurts me and it hurts you. It hurts you because your nose is broken and it hurts me because my fist has an owie.
China suffers a few owies if we impose tariffs, but mostly these taxes on ourselves, hurt ourselves.
Again: let us boldly say: “We will no longer interfere with our citizens’ decisions on how they spend their income.” If an American stands to benefit from a transaction, we will not throw a roadblock in the way because doing so hurts Americans.
Patterico (115b1f) — 5/7/2019 @ 8:20 pmUnited States. America first!
Also Trump superfans: Trump’s tariff war with China is a good thing, because it will enable Trump to make a Great Deal with China that will lower tariffs on both sides.
Is that truly the Trumpian argument? I think the Trumpist will argue that the tariff/trade war will result in a lower trade deficit with China. Not actually the same thing. And since Trumpian praxis is telelogical, seeing higher American tariffs as good in no way contradicts lower Chinese tariffs as good (or higher Chinese tariffs as bad), because both higher American and lower Chinese tariffs benefit Americans.
Kishnevi (410e69) — 5/7/2019 @ 8:22 pmI have no great argument with that. Statement #1 is indeed idiocy, as a matter of pure economics.
I might disagree with Statement #2 as well but it’s not an obvious matter of economics but a matter of how a foreign government perceives the situation. It’s not as obviously pure wrong.
I do think you can’t rationally hold both beliefs.
Patterico (115b1f) — 5/7/2019 @ 8:22 pmModeration, let me retry
Is it not a tax on our people? Are the costs not paid by American consumers? I know the dolt Trump thinks they are paid by Chinese companies, but he’s a f**king dolt and he’s wrong. Do you disagree that we are the ones who pay?
Have you not read a GD thing I’ve written? No, that is not always true. Only certain products have hard cost-based prices. To the degree that they do, yes, the above is correct. But many many products do not. If there is leeway in the price, the importer usually swallows the duty to stay competitive.
Note that I do not care, or wish to speculate, on what Trump thinks.
Kevin M (21ca15) — 5/7/2019 @ 8:24 pm” If an American stands to benefit from a transaction, we will not throw a roadblock in the way because doing so hurts Americans.
But if other Americans are hurt by that transaction?
Kishnevi (410e69) — 5/7/2019 @ 8:26 pmWhat if not throwing a roadblock in the way hurts some Americans? Or what if throwing that roadblock in the way benefits Americans?
So a) these people think a high trade deficit is bad, even though it’s not (this I already knew), and b) these people think we can have huge tariffs against China while China imposes none on us? What do they think those soybeans are doing piling up in silos in the midwest? You think they don’t understand why that’s happening? I think they do.
Patterico (115b1f) — 5/7/2019 @ 8:27 pmYou don’t have to speculate. He spills his idiocy all over Twitter, for all of us to see.
Patterico (115b1f) — 5/7/2019 @ 8:30 pmI do think you can’t rationally hold both beliefs.
Why is a tariff wall as a matter of ongoing policy the same as a temporary display of free trade’s alternative to those who use “free trade” as a mask?
Kevin M (21ca15) — 5/7/2019 @ 8:31 pmYou don’t have to speculate. He spills his idiocy all over Twitter, for all of us to see.
I’ll take your word for it. Twitter delenda est.
Kevin M (21ca15) — 5/7/2019 @ 8:32 pmSo you say. Here’s what people who have studied the question say:
Patterico (115b1f) — 5/7/2019 @ 8:32 pmSoybeans pile up in the Midwest because soybean growers haven’t the wit to figure out who China is buying from now and serve THEIR old customers. Or drop their prices in the US (assuming there are no price supports — another terrible idea from 1934).
Soybeans are the ultimate fungible product. Next we’ll hear that Texas oil is piling up because the Chinese won’t buy it.
Kevin M (21ca15) — 5/7/2019 @ 8:36 pmOK. So Chinese tariffs are no problem after all. The sellers should just sell their stuff elsewhere.
Patterico (115b1f) — 5/7/2019 @ 8:45 pmTo add a little perspective, $72.56 billion was spent on our pets in the U.S. in 2018.
Colonel Haiku (2601c0) — 5/7/2019 @ 9:10 pmInteresting Frontline PBS doc on this “China vs. America,” ‘globablists’ vs. ‘nationalists’ tariff tiff. Trump knows where he’s going with this about as much as a French cow did in 1944 wandering through a Normandy minefield.
Sleep well, America.
DCSCA (797bc0) — 5/7/2019 @ 10:18 pmMy 5 favorite power tools I use daily are made in Germany or the chech republic. In 2017 a Festool factory was open in Lebanon, Indiana.
mg (8cbc69) — 5/7/2019 @ 10:46 pmI agree its hard to find things not made in China, but if your looking for quality don’t buy it from the chicoms. Nixon should have started rebuilding Mexico instead of doing business with the commies.
Maybe it’s because there’s a new generation of commenters, but these tariff arguments were made and dispensed with when Milton Friedman was on Channel 9, before Ross Perot had a meltdown about his daughter’s wedding, and after Pitchfork Pat lost the argument when he was in the Reform Party, and we’re only revisiting this again because we have a so-called Republican president who doesn’t have the first clue about economics. Good grief.
Paul Montagu (7968e9) — 5/7/2019 @ 11:01 pmIt’s worth remembering when asking the question “Will this policy hurt us or help us?”, who, exactly, do you mean by “us”? Do you mean American producers of x, y, and z products (population: ???), or American consumers (population: 327.2 million, as of 2018)?
Either choice, free trade or protectionism, hurts one group at the expense of the other.
It is also worth remembering the existence, actual or potential, of the third component of trade: malice.
Soothsayer (5e34cc) — 5/8/2019 @ 12:06 amConsumers will pay less with free trade. Hey free trade morons How do you pay less when your job leaves the country and your town dies. You can’t be a consumer if your job goes away and you have no money. Not everyone can be a walmart greeter. milt freedman considered american workers collateral damage. uncle milty’s rich friends put up money to add an economic nobel so they could buy him one.
lany (55123b) — 5/8/2019 @ 12:10 amPatterico, thank you for taking the time to reply.
I didn’t express my point well.
My point is that even though you’re right on the overall net benefit of free trade Trump supporters don’t care because they want to ‘show strength’ and ‘punish’ china for being ‘unfair’ to them.
The fact that this approach will make us worse off financially is a less important result.
I feel that this explains their apparent contradiction.
If this is clear to you and we just disagree i’m fine with that, i just want to make sure I’ve successfully gotten my point across. Not looking to win an argument just communicate.
Time123 (c9382b) — 5/8/2019 @ 5:04 amIn Wealth of Nations Adam Smith pointed out that free trade would have disparate impacts across a country and suggested that some of the gains be used to smooth that out.
So I guess my preferred solution would be that you move to a new town where your skills are in demand, or learn new skills to stay where you are, or a combination of the two. I’d also support public policy that provides resources to help people do this successfully.
I don’t usually make this conversation personal, but since I you called free traders ‘morons’ I have to ask, when you got dressed today, how many articles of clothing were made in the US? Was the car your drove to work both assembled and engineered in the US?
It’s very possible to buy US made clothing and drive a US engineered and manufactured vehicle. It restricts your choices on cars and costs a lot more for clothing. But that’s fine, back when all our clothing was domestically made people didn’t always wear a different shirt / pants
Time123 (c9382b) — 5/8/2019 @ 5:10 amevery day.
Learn to code.
nk (9651fb) — 5/8/2019 @ 5:13 amAdam Smith wrote during the age of empire. The looting of the New World and the Third World. The commerce from overseas that starved Yorkshire textile workers still increased the wealth of England, or say rather the part which mattered to him, the merchant class.
nk (9651fb) — 5/8/2019 @ 5:22 amToday’s merchant class calls itself multinationals and has no need of nations as other than markets. It buys low at one place in one place and sells as high as it can at another, and whether the first place is starving its workers and depleting its natural resources while the second place is being slowly bled of its accumulated wealth is irrelevant to it. It has dispensed with the concept of nationhood.
nk (9651fb) — 5/8/2019 @ 5:30 amOn the plus side, that’s probably why the Dyer family needed to emigrate to America, and we got to meet Beldar. 😉
nk (9651fb) — 5/8/2019 @ 5:42 amI like nk’s succinct answer at 125, but when Democrats and labor unions were trying to make the very point you expressed, it usually followed with one government proposal after the next, all serving to distort the free market, usually intended to benefit one specific set of businesses or another, and always at the expense of American taxpayers in the form of higher prices. And when one pig at the trough got its share of slop, other pigs would show up and demand theirs. This was the kind of K Street capitalism that Republicans used to condemn, and now it’s being embraced by this erstwhile Democrat and current president, along with his loyal followers. I say again, good grief.
Paul Montagu (7968e9) — 5/8/2019 @ 5:54 amOh, and not that I care, but really, “free trade morons”?
With a ballooning trade deficit and budget deficit I assume the president wants to transfer his expertise on how to lose $1.7 BILLION like he did.
The Conservative Curmudgeon (c118b3) — 5/8/2019 @ 6:04 amNote to Time123 and Paul
“Lany” is merely a troll who can be–indeed, I would say should be–utterly ignored.
Kishnevi (575302) — 5/8/2019 @ 6:18 amWith a ballooning trade deficit and budget deficit I assume the president wants to transfer his expertise on how to lose $1.7 BILLION like he did.
He didn’t lose it, he gained it. Paper losses, not actual out-of-pocket losses, which he then used and may still be using to reduce his real, money-in-his-short-fingered-hands, taxable, income which he reports to the IRS.
Thanks to tax laws of the rich, by the rich, for the rich.
nk (9651fb) — 5/8/2019 @ 6:25 amEveryone’s favorite illegal alien!
They say “things are tough all over,” but I didn’t realize that even Planet Remulak had fallen on hard times…
Dave (1bb933) — 5/8/2019 @ 6:26 amBeldar can explain what I meant — again, he already did once very recently — if he cares to.
nk (9651fb) — 5/8/2019 @ 6:30 amAround 1900, about 50% of Americans made their living by farming. Today it’s more like 1%.
All those lost farm jobs explain why we’re starving, and have 49% unemployment.
Dave (1bb933) — 5/8/2019 @ 6:41 amAll those lost farm jobs explain why we’re starving, and have 49% unemployment.
We don’t, but if it were not for 119 years of tariffs we would.
nk (9651fb) — 5/8/2019 @ 7:12 amThat wasn’t what I asked you but OK.
Patterico (115b1f) — 5/8/2019 @ 7:13 amMore like: Do you mean American producers of a and b products (population: ???), or American producers of c, d, e, f, g, h, i, j, k, m, n, o, p, q, and r products that are made using Chinese intermediate goods (population: ???? but a lot) ADDED TO American consumers (population: 327.2 million, as of 2018)?
Free trade “hurts” one group only in the sense that laws against robbery hurt robbers. Free trade benefits everyone who engages in it, by definition; you don’t engage in a transaction unless you believe at the moment you make it that you stand to benefit. That some regime prevents such voluntary transactions from occurring, and uses the compulsory power of the state to tell one side to the transaction that they must pay more than they would have voluntarily agreed to pay, might “benefit” either that compulsory power by taking the money, or a third party if the original seller turns to that third party — but it is nevertheless an analytical error to say that free trade “hurts” anyone, by removing the opportunities for a coercive power to impose unwanted burdens on voluntary transactions.
Patterico (115b1f) — 5/8/2019 @ 7:20 amIf you’re saying that Trump superfans don’t understand the economics and don’t care because they think they are sending a tough message, sure.
Patterico (115b1f) — 5/8/2019 @ 7:40 amIncoming daisy-cutter logic bomb…
… it’s a direct hit!
Dave (1bb933) — 5/8/2019 @ 7:44 amThis is the type of argument we often see when people (like the Colonel here) support tax increases. Hey, they’re small in the grand scheme of things!
Patterico (115b1f) — 5/8/2019 @ 7:45 amIt’s pretty easy to drop logic bombs when you keep in mind that tariffs are taxes — and that taxes, like all government interventions, have a distorting effect on a system of voluntary exchanges by preventing some of those voluntary exchnanges from occurring, or by using coercive force to change the terms such that one side (or both) benefit(s) less than it otherwise would.
Patterico (115b1f) — 5/8/2019 @ 7:48 amLet’s read what Patterico thinks is the winning strategy to combat China’s cyber intrusions, their subsidies that distort markets? How do we stop the forced transfer of America’s business technologies? How do we put an end to China’s undeniable theft of intellectual property? What’s the solution to China’s currency manipulation, and China’s flooding the West with their fentanyl?
Colonel Haiku (2601c0) — 5/8/2019 @ 7:57 am“Do me a favor. Pick the 5 things closest to you that plug into the wall or run on batteries. Examine each for the label saying where it was made and report back. I’m serious.”
Patterico (115b1f) — 5/7/2019 @ 8:04 pm
Pick the five academics, lawyers, public servants nearest you and see how much they’ve chosen to insulate themselves from global free market forces, with direct help from government coercion.
Maybe the average obsolete industrial worker has learned how government power works for some and simply want a piece of that action.
Munroe (e0f980) — 5/8/2019 @ 7:58 amWhat would Adam Smith do?
Colonel Haiku (2601c0) — 5/8/2019 @ 7:59 ami am enjoying this discussion because I am learning a lot, and I appreciate Haiku making substantive points. The points and the responses will be enlightening.
However, this is ironic coming from the commenter who seems to think everything is a BINARY CHOICE … until now.
DRJ (15874d) — 5/8/2019 @ 8:44 amMunroe proves Time123’s point that some people view this as only about fairness and, apparently, elitism.
DRJ (15874d) — 5/8/2019 @ 8:46 am“However, this is ironic coming from the commenter who seems to think everything is a BINARY CHOICE … until now.”
I have asked related questions several times ever since the subject of tariffs came up and don’t recall ever seeing a response, even after pointing that out. It’s just been tariffs are bad, Orange Man Bad.
Colonel Haiku (2601c0) — 5/8/2019 @ 8:53 amHave I been a commenter who went beyond the choice of either Trump or Clinton in Nov-‘16?
Colonel Haiku (2601c0) — 5/8/2019 @ 8:55 amThat was a binary choice.
Colonel Haiku (2601c0) — 5/8/2019 @ 8:56 amGood morning, class. This morning we will have a snap quiz. Don’t worry, it’s short. Here are the questions:
Trump lifts all tariffs on Chinese imports. Mark each of the following as likely or unlikely:
nk (9651fb) — 5/8/2019 @ 9:06 am1. Walmart’s stock price goes up.
2. Walmart’s corporate earnings go up.
3. Walmart’s executives’ salaries go up.
4. Walmart store employees’ wages go up.
5. The prices at which Chinese imports are sold to consumers at Walmart stores go down.
98, Patterico (115b1f) — 5/7/2019 @ 8:04 pm
China (portable radio, runs on batteries, originally sold as a premium, bouht on eBay
China (wireless mouse) it doesn’t plug into a wall, or tn on batteries, though
???? Dell monitor – cant find a label – USA?
??? Computer is refurbised – unknown
??? Logitech keyboard
Thailand (wmall flat screen television, bought in 2012)
China (COBY CD ROM, radio etc.
??? surge protectors
USA – probably decades old electric clock, missing the second hand. I started using it a few years ago. It had probably been in a room with other things for a decade before. I don’t know how or when I originally got it, but it is not something from my childhood. Probably came from a flea market or yard sale or something like that circa 2002.
These are nt all the nearest things. But maybe what comes to mind most.
Nikon cameras: Not Japan – either China or Indonesia. I thought at first I could say that the 3200s all were made in China and the slightly later 4100s in Indonesia but I see one 3200 was made in Indonesia. These are probably from 2004 or a little later. I can buy them on eBay for around $20 now including shipping.
Sammy Finkelman (ec94de) — 5/8/2019 @ 9:24 amOT, good news…
“A federal appeals court on Tuesday ruled that the Trump administration can for now continue returning Central American migrants to Mexico while their requests for asylum in the U.S. are adjudicated, a boost for White House efforts to tighten the southern border.
The decision by the San Francisco-based Ninth U.S. Circuit Court of Appeals is a surprise victory for the administration, which previously had been on the losing end of several immigration-related rulings by the liberal-leaning court.
The ruling stays the effect of a decision by a federal trial judge who last month blocked the policy while it is being challenged in court.”
https://www.wsj.com/amp/articles/federal-appeals-court-allows-trump-back-to-mexico-asylum-policy-to-remain-in-effect-11557275323
Colonel Haiku (2601c0) — 5/8/2019 @ 9:32 am131. nk (9651fb) — 5/8/2019 @ 6:25 am
The New York Times story argues that the losses were too big to explained by depreciation. The article also says something I did not know. That while when his 1995 state tax return main pages were sent to the New York Times, it was speculated that he could have not owed any taxes for up to 18 years, they later learned he did report income.
This time they got transcripts from someone who had ;egal access to it. In other words that also excludes an IRS employee because mst of them would not be able to access it legally and besids they IRS wouldn’t have it anymore, and neither did the Chinese hack it, the New York Times would like you to know. It’s probably from an old accountant or a bank or other lender.
It is only for the ten years up to 1995. Maybe his taxes look better after that.
Sammy Finkelman (ec94de) — 5/8/2019 @ 9:45 am123. Time123 (c9382b) — 5/8/2019 @ 5:10 am
And then what’s going to happen to the legislators who represent those areas after the next census?
Sammy Finkelman (ec94de) — 5/8/2019 @ 9:49 amNo, politicians are in favor of bringing jobs to people, not people to jobs. Unless they;’re new people moving into their districts if they won’t affect the way people vote. Black politicians don’t like (mostly) white people moving into their districts. They don’t like any new residents. If they are not citisens, then it’s OK because they make it less necessary for their districts to add new territory but don’t vote.
Sammy Finkelman (ec94de) — 5/8/2019 @ 9:55 amThat one’s about fairness. It’s not fair that the ‘elites’ are insulated from this and the ‘non-elites’ aren’t.
Time123 (b87ded) — 5/8/2019 @ 9:58 am100% agree. Plus people often don’t want to move. It takes work and often involves a loss of social capital.
Time123 (b87ded) — 5/8/2019 @ 9:59 amRight, but picking the least bad doesn’t mean it was a GOOD pick.
You seem to actively like Trump and support his policies. That’s different from voting to keep Hillary out of office.
Time123 (b87ded) — 5/8/2019 @ 10:01 am@138, that’s close enough to what I’m saying. I think a lot of them understand the economics, but feel there are other concerns that also need to be addressed.
Like some may feel that rule of law is more important in the immigration debate the the overall economic impact to the country even if more immigration is a net gain to our economy.
Time123 (b87ded) — 5/8/2019 @ 10:03 am“You seem to actively like Trump and support his policies. That’s different from voting to keep Hillary out of office.”
On the whole, I have been pleased with what has been accomplished, yes… especially judges, the economy and foreign policy.
Colonel Haiku (2601c0) — 5/8/2019 @ 10:08 am@ Patterico, #137:
This passage needs to be modified a bit, because I see an (unintentional) equivocation between free trade as a national economic policy, and a free trade — an uncoerced transaction between two or more parties with an eye toward mutual benefit. “A free trade” is always beneficial to all groups involved, assuming that they know what will benefit them. But “free trade” does not benefit all parties involved on a net basis. If it did, protectionism would never be able to find a foothold.
You know Bastiat, Patterico, and I’m sure you’ve read Hazlitt’s book-length examination of the broken window fallacy in its many forms, so I won’t insult you by recapping it. The thing is, though (and we forget this at our peril) that the reason the fallacy exists is because there is an obvious harm right in front of people. You can raise support for tariffs by pointing to THIS family business, employing 500 people and serving customers for over a century on Main Street, U.S.A., that will go belly-up if it continues to be undercut by cheaper foreign producers. You can raise support for rent-control laws by pointing to THIS 93-year-old woman — widow of a Silver-Star-winning WWII veteran, career public-school teacher, mother of five — who stands to lose her apartment of decades due to rising rent prices. People see the example, they feel outraged at the injustice…and they demand that somebody do something.
Now you and I know, and we could both make the case well, that the indirect and hidden cost of these efforts to “do something” almost always outweighs the open and direct cost we pay when we let market forces do their work. The tariff that saves the business costs us three to four times more money per year than it would have cost us simply to give a grant that would have paid everyone’s salaries. The rent-control law that saves the widow’s home squeezes a thousand landlords across the city, thus simultaneously ensuring less money for maintenance and ghettoizing the poor and lower-middle class who now can’t afford to move OUT of their residences.
But while it may be for the best to let market forces work, that doesn’t mean it’s universally good for everyone. Some people will suffer from free trade, and we look bad when we don’t acknowledge that will happen as a necessary evil.
Demosthenes (17f107) — 5/8/2019 @ 10:19 amTime123, I know you were pointing out the fairness factor and not elitism. I added the last part based on Munroe’s comment but I did not mean to imply you feel that way.
DRJ (15874d) — 5/8/2019 @ 10:35 amIt just so happens that today in our neck of the woods the teachers have staged a walkout to demand pension — err, education — funding. Nothing says “insulated from market forces” like a staged walkout, pensions and using taxpayers as your ATM.
So, being in the private sector and having to make arrangements for our kids today, I’m not particularly receptive to high level theorizing on free trade. Maybe tomorrow.
Munroe (c6f8fa) — 5/8/2019 @ 11:18 amBut many teachers in the walkouts of 2017 and 2018 learned to play the game and wore Trump swag in venues where it is appreciated by the key decision makers (AZ, WV, KY) and made a point to be where the cameras were rolling.
urbanleftbehind (5eecdb) — 5/8/2019 @ 11:36 amBased on three government sources and three private sector sources – all unidentified – who were briefed on the negotiations… https://www.reuters.com/article/us-usa-trade-china-backtracking-exclusiv/exclusive-china-backtracked-on-almost-all-aspects-of-u-s-trade-deal-sources-idUSKCN1SE0WJ
Colonel Haiku (2601c0) — 5/8/2019 @ 11:46 amI’m not saying that everyone always comes out ahead at all times in a market economy. I am saying that in any voluntary transaction, each side engages in the transaction because they believe at the moment they make the deal that they stand to benefit.
As it happens, on another thread, I wrote a long (and angry) comment that acknowledges what you just said: sometimes people get the short end of the stick … and then argues that (as so you well put it) “the indirect and hidden cost of these efforts to “do something” almost always outweighs the open and direct cost we pay when we let market forces do their work.” And I cite Bastiat! And I had not read your comment before I wrote it. You can read it here. Just goes to show you that we’re thinking quite alike.
Patterico (115b1f) — 5/8/2019 @ 6:02 pmSo what you perceive to be unacceptable behavior by public employees makes you more receptive to government interference with your spending decisions?
Dave (1bb933) — 5/8/2019 @ 6:07 pmProbably worth a separate post.
Patterico (115b1f) — 5/8/2019 @ 6:12 pmNo question my house has plenty of Chinese made products. Batteries, phones, appliances and more. Are things so cheap from China because of the competition amongst the large amount of factories in China?
mg (8cbc69) — 5/8/2019 @ 6:12 pmBingo!
Patterico (115b1f) — 5/8/2019 @ 6:16 pm