Posted on 03/07/2002 11:27:12 PM PST by JohnHuang2
BRAVO FOR BUSH!!!
[.....................crickets.........................]
The result was one of the biggest man-made economic disasters in history, a worldwide Great Depression which came after the Roaring Twenties of ludicrously inflated stock prices on Wall Street. By 1932, the jobless rate in some US cities was put at 50 per cent of the workforce. This Hoover-inspired economic catastrophe led directly to the election of Franklin Roosevelt in November 1932.
Perhaps in the cynical calculations of the White House they have recognised that the moves on steel tariffs may simply provoke a series of skirmishes at the World Trade Organisation, the international referee on such matters. If the WTO says the steel tariffs should not stand, then Mr Bush can claim he tried to protect Big Steel but those terrible foreigners would not let him.
you put all that on Hoover's tariff?
Expect them to ramp up their lobby operations on K Street (which employs mostly former Fed.gov. officials) to overturn this through WTO.
BushSr also threatened and in some cases used these weapons.
It is a (Barf Alert!) CATO INSTITUTE / HERITAGE FOUNDATION MYTH that somehow Reagan and BushSr were categorically doctrinaire free traders down the line. Not true. The both of them had a streak of "fair trade" in them; and it is history that they acted when they saw patent trading injustice.
Oh, by the way, the US taking the hardline on Japan through 301 and Title VI cracked open the market, getting no less than 15 US contractors into the market. Up until that point it was meaningless hours and hours of negotiations with Japan's Foreign Ministry and Construction Ministry with delays, shill games, intransigence and basically a 'screw you' from Japan. They woke up and took action once Uncle Sam matched his fair trade rhetoric with executive action.
I have somewhat revised my opinion of Bush II; first on his response to international terrorism and now his response to trading inequities.
However, it is also obvious that Pat is simply giving Bush an "attaboy" for a first-step rather than addressing what needs to be done further.
Bush's action's are a step in the right direction, but still inadequate due to inconsistancy.
The optimal solution is a relatively low, across-the-board revenue tariff of 10-20% on ALL imported goods from ALL foreign countries.
"Targeted" tariffs have the disadvantage of providing loopholes and, as others will be quick to point out, the potential to hurt other domestic industries.
A prime example is our failed embargo on the importation of Cuban goods. Cuban sugar has been routinely imported to the U.S. through the back door: Canada. Cuban sugar is shipped to Canada where it is dissolved in molasass. "Canadian" molasass is then legally imported to the U.S. where the sugar is easily refined back out. The leftover molasass is then exported back to Canada where the cycle is repeated. Large sugar-users (such as candy makers) are also closing their domestic factories and moving to Canada where they can legally use Cuban sugar, then import it as candy to the U.S.
An across-the-board revenue tariff of 10-20% would circumvent this type of abuse. Additionally, the revenue could be used to offset a major reduction or elimination of the corporate income tax, providing domestic producers a more "level playing field". (A Proposal to Abolish the Corporate Income Tax)
From a historical perspective, a revenue tariff of 10-20% is NOT excessive:
Boo Pat Boo!!!!
i don't think it is a good idea for the US to depend on others for certain critical things our country needs.
hence, i tend to agree with this tariff.
Furthermore, at the outset of the Great Depression, Imports formed only 6 percent of the GNP. With average tariffs ranging from 40 to 60 percent (sources vary), this represents an effective tax of merely 2.4 to 3.6 percent.
Even an effective tax of 2.4 to 3.6 percent is overstating the effects of the tariff. The tariff rates were already high to begin with. One source reveals that Smoot-Hawley raised rates from 26 to 50 percent; another source from 44 to 60 percent. In that case, we are talking about an effective tax increase of 1.4 percent at most.
Yet the Great Depression resulted in a 31 percent drop in GNP and 25 percent unemployment. The idea that such a small tax could cause so much economic devastation is too far-fetched to be believed.
Steel production is an industry vital to National Defense.
The "free trade" extremists typically ignore national security interests in their quest to fatten their portfolios. Such extremism has also led to willful neglect of border security on immigration issues.
Bush has FINALLY shown some independence from these extremists when national security is seriously jeopardized. However, as you note, the inconsistant application of targeted tariffs has its downside. It is neither good trade policy nor economic policy.
It would be much better for America to have a relatively lower (10-15%) flat-rate revenue tariff that is applied consistantly to all imported goods from all countries. The revenue from such a tariff could be used to offset a corresponding reduction in the corporate income tax. Such a consistant trade/tax policy would enhance our economy and jobs.
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