Posted on 03/15/2018 7:44:21 AM PDT by reaganaut1
Dear President Trump :
It seems you are about to impose tariffs on imported steel and aluminum. You probably know that just about every economist except Peter Navarro thinks this is a terrible idea. But it’s not just us economists. Aside from the steel and aluminum industries, virtually the entire business community opposes the tariffs. The stock market took a major hit. And by the way, when did you stop using the Dow to keep score?
You tweeted that “trade wars are good, and easy to win.” Actually, trade wars are bad, and impossible to win.
Voluntary trade is a win-win proposition, as Adam Smith explained in “The Wealth of Nations.” Impeding voluntary trade is a lose-lose proposition. The key word here is “voluntary.” When foreigners rent rooms in your Washington hotel, both you and they win, right? If not, why would they stay there, and why would you accept them as guests?
Next, let’s consider your “easy to win” quip. It is likely that the U.S. can inflict more pain on its trading partners than they can inflict on us, as we rely less on trade than most countries do. Sure. But merely suffering less than your opponent seems a poor definition of “winning.” Trade wars are a pyrrhic form of competition in which even the victor is left worse off.
You say America loses whenever it runs a trade deficit with any country. But in 2017 the U.S. ran a $571 billion trade deficit with the entire world, which necessarily included deficits with dozens of individual countries. Were they all beating us—and if so, at what? The truth is that America’s huge multilateral trade deficit is made at home.
Here’s why. Nations that invest more than they save must borrow the difference from abroad.
(Excerpt) Read more at wsj.com ...
So, it’s only a war when we fight back. :-D
Good. When other coutnries are waging war on you, it best if you fight back.
Ronald Reagan: Protectionist
The Free Market
Mises.org Publish Date:
May 1, 1988 - 12:00 AM
Author 1:
Sheldon L. Richman [1]
The Free Market 6, no. 5 (May 1988)
Mark Shields, a columnist for the Washington Post, recently wrote of President Reagan’s “blind devotion to the doctrine of free trade.” If President Reagan has a devotion to free trade, it must be blind because he has been way off the mark. In fact, he has been the most protectionist president since Herbert Hoover.
Admittedly, his rhetoric has been confusing. In 1986 Reagan said, “Our trade policy rests firmly on the foundation of free and open markets. I recognize. . . the inescapable conclusion that all of history has taught: the freer the flow of world trade, the stronger the tides of human progress and peace among nations.”
But he advocated protectionism early in his 1980 campaign, saying to the U.S. auto industry: “Japan is part of the problem. This is where government can be legitimately involved. That is, to convince the Japanese in one way or another that, in their own interests, that deluge of cars must be slowed while our industry gets back on its feet...”
When he imposed a 100% tariff on selected Japanese electronic products for allegedly “dumping” computer memory chips, he said he did it “to enforce the principles of free and fair trade.” And Treasury Secretary James A. Baker has boasted about the protectionist record: Reagan “has granted more import relief to U.S. industry than any of his predecessors in more than half a century.”
It’s true that the administration has fought with protectionists in Congress, but only over who should have the power to restrict trade. As Reagan put it, “It’s better policy to allow for presidents—me or my successors—to have options for dealing with trade problems.”
Defenders of the Reagan policies will say that he has engaged in protectionism to open foreign markets. But they cannot deny that one-quarter of all imports are today restricted, a 100% increase over 1980.
Nor are foreign markets more open. The Reagan administration talks about exporting free enterprise, but in fact it has exported economic intervention to Japan, South Korea, and other nations.
When the United States imposes import quotas or pressures a foreign government to do so, a compulsory cartel must arise in the exporting country, since its government will assign the quotas among private firms and administer the system. Ronald Reagan has forced nations that export textiles, apparel, sugar, steel, and other products to cartelize these industries.
Can trade restrictions open foreign markets? The use of government power to regulate trade is more likely to produce conflict of which American consumers and exporters become the victims. It is also naive, because it ignores the political pressure to maintain existing restrictions. The United States, for example, could impose new limits on Japanese autos to force Japan to accept beef exports from Iowa. But, as syndicated columnist Stephen Chapman asks, “Does anyone believe that when Japan starts buying Iowa beef, Ford and Chrysler will stop trying to keep out Japanese cars?”
Considering our own intricate web of trade restrictions, it is sanctimonious for the U.S. government to lecture others about opening their markets. It might be in a better position to make demand~ if it first stripped our economy of those restrictions. But wouldn’t we be giving up bargaining chips? Yes. But the objective is not to negotiate; it is to enjoy the benefits of productivity and the international division of labor. The bonanza of unconditional free trade would be so great for the United States that it would set a good example for the rest of the world.
The value of free trade does not depend on open markets abroad. It is good for the nation that practices it, regardless of what others do. The purpose of an economic system is not to produce jobs or sell products abroad. Those are means. The end is satisfaction of our material wants. Free trade is good because our standard of living depends on how easily we can get the products and services we want.
One is led to ask: with free-traders like this, who needs protectionists?
The administration has thus far:
Forced Japan to accept restraints on auto exports;
Tightened considerably the quotas on imported sugar;
Negotiated to increase the restrictiveness of the Multifiber Arrangement governing trade in textiles and apparel;
Required 18 countries, including Brazil, Spain, South
Korea, Japan, Mexico, South Africa, Finland, Australia, and the European Community, to accept “voluntary restraint agreements” that reduce their steel imports to the United States;
Imposed a 45% duty on Japanese motorcycles for the benefit of Harley Davidson, which admitted that superior Japanese management was the cause of its problems;
Raised tariffs on Canadian lumber and cedar shingles;
Forced the Japanese into an agreement to control the price of computer memory chips;
Removed third-world countries on several occasions from the duty-free import program for developing nations;
Pressed Japan to force its automakers to buy more American-made parts;
Demanded that Taiwan, West Germany, Japan, and Switzerland restrain their exports of machine tools;
Accused the Japanese of dumping roller bearings on grounds so that the price did not rise to cover a fall in the value of the yen;
Accused the Japanese of dumping forklift trucks and color picture tubes;
Extended quotas on imported clothes pins;
Failed to ask Congress to end the ban on the export of Alaskan oil and timber cut from federal lands;
Redefined dumping so domestic firms can more easily charge foreign competitors with unfair trade practices;
Beefed-up the Export-Import Bank, an institution dedicated to distorting the American economy at the expense of the American people in order to artificially promote exports of eight large corporations.
The World Bank estimates that import restrictions in 1984 had the same effect as a 66% income tax surcharge on America’s poorest citizens. Less obvious is the harm to American producers, who lose exports and pay more for capital goods because of protectionism. For example, everyone, including the beleaguered American auto industry, has to pay more for steel because of the Reagan administration’s restrictions on imports. Even the steel industry is hurt because artificially high prices stimulate the search for alternative materials.
President Reagan missed a unique opportunity to begin freeing the American economy from the shackles of trade restrictions. He need not have given the American people a technical lesson in economics. He could have said that free trade requires no more justification than domestic economic freedom; indeed, it requires no more justification than the traditional American values of a humane and open society.
Citation:
Richman, Sheldon L. “Ronald Reagan: Protectionist.” The Free Market 6, no. 5 (May 1988).
Alan Binder, Obama’s economic flunky.
These people just love, love love Adam Smith when it comes to “Free Trade”.
Hey, how about the ol’ Invisible Hand? How about enlightened self interest? How about less government? How about real free enterprise?
No?
Not interested in that stuff? Just the Free Trade stuff? Is that because “free trade” is a globalist tool to weaken the US? Other countries use tariffs and trade restrictions. That’s no problem at all. No “trade war” there, right?
This push against tariffs is pathetic. President Trump is right.
The war has been going on for years. We decided to fight back.
Well listen Alan. China in particular impedes every other country’s trade. If you want to actually manufacture in their country, you are required to give up your IP rights. Tell me again how this is free and open trade?
As long as we’re going to put much needed tariffs on stuff, haw about we stop subsidizing all the ethanol, solar, wind and other lefty love children.
They never make money and are not self-supporting even on a break even basis.
I see it as, “The Art of the Deal”.
Imposing a tariff on two raw materials really just serves to pit different U.S. industries against each other.
This trade war as they call it, began and ended 40 years ago when Our Congress SOLD OUT THE AMERICAN PEOPLE, We have been Losing ever since.
Importing workers OR manufacturing overseas has several outcomes, none of which are beneficial to the American (or native) worker or imported worker but all of which are beneficial to the corporatist scumbag.
It benefits the corporatist scumbag by reducing the cost of labor, while increasing profit which is NOT passed on to shareholders BUT into the pockets of corporate scumbag officers.
It's a disadvantages workers by depressing wages and benefits. Foreign labor works for a lower wage under more dangerous conditions OR native workers work for slave wages and no benefits.
So, continue dancing to your elitist master's tune. The time may come when foreign pundits begin crossing the border and your daughters are forced into less, ahem, pleasant occupations.
> “You probably know that just about every economist except Peter Navarro thinks this is a terrible idea.”
Economics is far from a science, not near an exact science. It is more akin to reading the tea leaves, to astrology.
Economics is astrology.
Economics has predicted nine of the last five recessions.
It is the fodder of ‘salespeople’. When I see DJT pick up economic figures and statistics, I know he is trying to rally his listeners, to inspire their confidence. I do not see him lying, I see him motivating.
When I would see Obama tout economic statistics in his favor, I saw it as deceptive because his aim was not to motivate or inspire.
But with both people, I see the statistics and figures cited as flawed. Take them with a grain of salt.
President Trump is not “imposing” tariffs. President Trump is telling the other countries to match our tariffs on goods or we will match theirs.
If they correct their practices, then no foul. If they do not, then they were already conducting a trade war against the USA, and this is just recognizing the fact.
China has been in a trade war against us for years, but no one wanted to recognize that fact.
“These people just love, love love Adam Smith when it comes to Free Trade”
My thoughts exactly. When you see these socialist libtards quoting Adam Smith you can be sure that they are hiding their true motives.
How much funding is his think tank getting from the Chinese?
Just so you know who’s who:
Blinder was born to a Jewish family in Brooklyn, New York. He graduated from Syosset High School in Syosset, New York. Blinder received his undergraduate degree in economics from Princeton, graduating summa cum laude in 1967. He subsequently gained an MSc in economics from the London School of Economics (1968) and then received his doctorate in economics from the Massachusetts Institute of Technology in 1971. He was advised by Robert Solow.
In other words, another NYC piece of crap, educated in the Marxist/ Socialist “schools” of New Joysey, Massoftwoshitts and London.
We the People have been losing bigly since the 17th Amendment and 16th amendment passed....
What we are enjoying currently is the bloated Fedzilla and damaged sovereignty of America... a bitter harvest unless you can buy a politician or Party.
Bull-ony. USGov has more regulations, documentation and restrictions of USA business than any other country. This makes virtually everything Make In USA, more expensive than made elsewhere.
If business overhead due to national government overhead is so high, than tarrifs must level the playing field, in national trade, clearly.
Matter of fact, the proper tarrif can be calculated, for each business (most likely manufacturing). Determine the government overhead upon each business, in each nation. Subtract the native overhead from the foreign overhead. This difference is the tarrif needed to equalize trade. Duh.
Protecting the industrys that provide raw and/or processed materials for our weapon systems is good. PERIOD!
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