Samuel Gregg: “Economic nationalism will not make America great again”
“Generally, protectionist policies are implemented in order to protect workers and industries, however, they also have the effect of throwing market incentives off balance. When a nation employing protectionist policies disincentivizes other countries from importing or exporting goods, their comparative advantage is ‘dulled’ ” - Acton
keeps affirming Ross Perot… Ignore that giant sucking sounds taking jobs away. It’s good for you to lose those jobs! People are better off unemployed and living on public assistance. It’s simple. Retrain the laid off 55 year old factory worker to “write code” as Biden said. No problem. Just keep buying that cheap Walmart junk.
….of wanting to substitute one form of protectionism for another. On one hand, you’ve got the “blunt force” instrument of tariffs, and on the other, you’ve got the blunt force instruments of diplomacy, pressuring companies/countries not to do business with Chinese firms.
Either way, it’s blunt force, and I dare suggest that tariffs are less likely to result in war and the like than the other blunt force instruments.
One way out of this conundrum is to remember what Bastiat noted about the matter in his commentaries circa 1853 or so; that there were regular, revenue tariffs out of which one got funding for ports, a navy, and the like, and there were punitive tariffs that were intended to keep foreign products out altogether. In my view, many “free traders” of today want to have those who pay the income tax subsidize the costs of keeping the sea and air lanes open by which we receive goods. Or, in other words, U.S. factory workers subsidize their competition.
And in that light, Trump’s choice of one blunt instrument over another probably reduces the chances of armed conflict while opening at least the possibility that U.S. workers won’t need to subsidize their competition as much. Thank you, Mr. President.
(end note; a revenue tariff is generally 10-15%, while a punitive tariff is 20% and up, as a rule….I personally favor a revenue tariff on all goods coming into the country coupled with a big reduction in things like the income tax)
Aspiring to be a stick in the mud.