Posted on 03/26/2016 8:01:15 AM PDT by central_va
An active industrial policy geared toward recovering our manufacturing capability can work and has worked before. There are many examples of this from U.S. history, championed by both sides of the aisle. In fact, tariffs effectively built the wealth of this country and have been a very valuable tool for managing growth for the better part of 200 years. We should not strive to return to a type of colonial “subject” status with respect to today’s new economic imperialists in Japan, China, Germany, the United Kingdom, the Netherlands, or Mexico.
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Modern American elites in academia, government and the media have intentionally turned their backs on history.
They see themselves as too smart, too progressive, and too sophisticated to learn anything from anyone else.
Especially from such outdated sources as the Founders or other patriots.
The problems the USA faces are the same as they have always been. The have high tech spin but the issues do not change.
Liberal social ‘studies’ are replacing history in our schools as part of effort to get population to lowest common denominator. Easy to shun achievers if their history of effects on human race are eliminated for ‘Muslim studies’.
International business spends billions on our politicians each year to ensure that the manufacturing remains in foreign hands. That will seem like pennies compared to the amount they'll spend to protect that and punish anyone who wanders off the globalist reservation.
What would be the cost? I think you could start by taking the 2012 DNC party platform and consider that the opening negotiation; the RNC will be in the globalist camp.
Can it be done? Absolutely. I think you could crash create an iPhone assembly plant and have it fully functional within 6 months. Of course that means that every high priced component of the iPhone would still be manufactured off shore.
Could you build those components here? Sure, probably with two years lead time. Only they probably wouldn't be able to start production as we'd need to import the rare earth materials to actually construct the components, and if that was considered ‘difficult’ today, in the middle of a trade war, that would be impossible.
To mine the rare earth materials we need would likely take 4 years of dedication to build that industry. That is assuming that you've gelded the EPA and every other government agency of ‘NO’ that both liberals and globalists have been paid to build to destroy American industry.
Crash the economy for likely 6 years to build an iPhone here?
It can be done, it just will take a national willpower that I really doubt we have anymore.
It’s going to take a World War, where we know we cannot rely on foreign suppliers to make it happen.
Since when does developing domestic manufacturing crash a economy? Construction, training the list goes on and on. Seems like to would put the economy on steroids.
The past does not exist for many people. Thus, mistakes mean zero. Read Orwell’s ‘1984’.
Sure, that does seem like it would be the case. Nothing happens in a vacuum however. The moment that tariffs are applied to retail goods, retail prices will go up by no less than the percentage of tariffs. If that gizmo is a dollar today, and a 25% tariff is applied, that means the gizmo costs the retailer $1.25 - whereas they might have sold it for $3.00 (or $2.00 on sale), it now is $3.75 (or $3.00 on sale.)
What happens in the real world, however, is that the factory that makes the gizmos raises their price to $1.50 because they automatically assume they'll sell less of them due to tariffs. So it will cost the importer $1.88 with the tariff.
The automatic economic assumption is that you take the amount of the tariff and you multiply it by 3 to estimate the impact of that tariff on the retail price. So a 25% tariff means at least a 75% increase in the shelf price of goods.
So it means gizmos are more expensive. How does that crash the economy? 56% of the working population of the United States are in the service or related industries, nearly 36% in retail or related industries. Estimate how many of them are laid off if consumer spending drops 10% - actually, you don't have to really estimate, we have the crash of 2008 to see exactly what happens.
How often would you replace, say, your phone if the price doubled? Once a year? Once every four years? A realistic projection would be consumer spending would pull back at least 20% to start, as both higher prices and layoffs worked their way through the economy. And as things get worse, spending decreases more.
The biggest problem is that you can't build factories faster than prices can change. Worse, strong employee unions means you can't build up enough return on investment to build more factories. Even worse, we don't mine much of the rare earth materials required for high tech industry, and importing them during a trade war (already a difficult task) would be nearly impossible.
I'm not saying it shouldn't be done - I think it should be. We have to steel ourselves for the fallout, as it will be devastating for close to a decade. Which, actually, works out, because during that decade we can teach our young people to get off their rumps and get to work.
I think that is the biggest problem; China’s industrial base feeds China’s military base. The thread of trade is all that holds the sword over our heads. A trade war with China would likely result in a shooting war in very short order, and I see little in the way we could protect Taiwan and South Korea from being swallowed up.
It would take a fundamental change in American attitudes from the current ‘me first’ viewpoint to one of ‘us first.’ All the while, you’ll have every free trader crowing about how these protectionist actions have devastated the economy and if we pull back these bad ideas, everything will go back to normal almost immediately.
The billions that foreign governments spend bribing our elected representatives would be but a trickle compared to the flood they’ll ply them with to put a stop to these ideas.
It really would take converting the American economy and mindset to a war footing to battle against such an onslaught.
And I’m not saying it shouldn’t be done. It should, as soon as possible, because every day we wait, the stronger others become. Today, we’d risk South Korea and Taiwan (and a good part of the Philippines.) Ten years from now? Most of the pacific including Australia plus likely India would have to be sacrificed.
Free Trade only works if all parties agree and play by the same rules. Which is clearly not the case.
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