Posted on 03/09/2016 3:43:27 AM PST by expat_panama
...when making laws or economic decisions, it is imperative that we examine not only what is seen but also what is unseen. In other words, examine the whole picture...
...A concrete example was the Bush administration’s 8% to 30% tariffs in 2002 on several types of imported steel. They were levied in an effort to protect jobs in the ailing U.S. steel industry.
Those tariffs caused the domestic price for some steel products, such as hot-rolled steel, to rise by as much as 40%....
...there is no such thing as a free lunch...
...steel-users — such as the U.S. auto industry, its suppliers, heavy construction equipment manufacturers and others — were harmed by higher steel prices.
It is estimated that the steel tariffs caused at least 4,500 job losses in no fewer than 16 states, with more than 19,000 jobs lost in California, 16,000 in Texas and about 10,000 each in Ohio, Michigan and Illinois.
In other words, industries that use steel were forced to pay higher prices...
...back in 2002, the typical hourly wage of a steelworker ranged between $15 and $20, in addition to fringe benefits — so we might be talking about an annual wage package averaging $50,000 to $55,000 — how much sense did it make for American consumers to have to pay $800,000 in higher prices, not to mention lost employment in steel-using industries, to save each job?
It would have been cheaper to tax ourselves and give each of those 1,700 steelworkers a $100,000 annual check...
...When Congress creates a special privilege for some Americans, it must of necessity come at the expense of other Americans...
...Congress ought to get out of the miracle business and leave miracle-making up to God.
(Excerpt) Read more at investors.com ...
“Wasn’t me who made that comparison, it was Milton Friedman. You may have heard of him...or not.”
I studied economics under one of his protégés...I greatly admire Dr Friedman, but he was an academic...if the Trump strategy were explained to him I am not sure he would disagree...
Absolutely, at one point a long time ago I swore to defend the Constitution and also my fellow Americans with my life. I would surly pay a few pennies on the dollar for durable goods to keep my fellow Americans working and the economy humming along. I would also like to reduce and/or eliminate income taxes and replace them with consumption based taxes, tariffs being the lynch pin of the concept. A concept which is neither controversial or new.
It appears that Trump is going to bring manufacturing back to the country by threatening manufacturers and forcing consumers to pay 45% more for goods from industries he wants to protect. I'm guessing that Trump, just like you, learned that the command economy never works out so well. But here he is touting everything about it except a five-year-plan. I don't know how you can say you understand Trump's plan when that plan is constantly changing evolving. If you don't like what Trump says, just stick around. He will, eventually, tell you what you want to hear.
More clarification, a tariff only affects the price of imported goods, America is still self sufficient in many ares of manufacturing. For example if the USA is self sufficient in "blue widgets" then the tariff would not cause the consumer to pay more for "blue widgets". The domestic producers would have an advantage with tariffs and eventually prices would stabilize at a point slightly higher than during the era of Free Trade. This difference would represent the cost of labor which is higher in the USA than Asia.
Manufactured product prices would go marginally higher with US labor but the real the question is how much higher and what are to political and social trade offs. Union labor is the highest cost, for example 8% of the retail price of a union built car covers labor, so in my estimation at most 8% higher in a closed market.
Nonsense. If our international competitors take a price increase, for any reason, we will, almost immediately, increase our prices. If Trump hits imported autos with a 45% tariff, it is lunacy to believe that domestic producers are not going to increase their prices.
BS, there is still domestic competition to stop that. One manufacturer reduces sticker price then the others follow. It is called supply and demand. Prices would stabilize as domestic manufactures regained market share. Eventually prices would be marginally higher form the slight increase in domestic labor costs. Now if the domestic manufactures "collude" to keep prices artificially high for any reason then that is crime under the anti trust act.
You just said an oil tariff will cause domestic oil to rise to match the import price, why do you feel a tariff on an imported good doesn't do the same to the equivalent domestic good?
For example if the USA is self sufficient in "blue widgets" then the tariff would not cause the consumer to pay more for "blue widgets".
Not sure what you mean by "self sufficient". If we import no "blue widgets", a blue widget tariff has no impact. If we import some, do you feel the domestic price doesn't rise?
The domestic producers would have an advantage with tariffs and eventually prices would stabilize at a point slightly higher
You're contradicting your previous claim, "a tariff only affects the price of imported goods".
As usual you are being too simplistic. You are to obtuse to discuss this subject.
I get it; our founders stupid, tariff bad, Trump bad, Unions bad, manufacturing bad.
Slaves good, deficits good, socialism good, poor quality good, and income taxes good.
Well because of you Free Trade twits we will all have to "endure" Trumps Presidency. Have fun with it.
Right. If you’re running a car company and have the opportunity to dramatically increase your margins, you are going to take it. That is, unless you want to be unemployed. Trump’s tariffs will increase the costs to consumers across the board. Then he can threaten them with price controls that I’m sure you’d support. You can never be too bold when dealing with those bastards in the private sector, right? Besides, the history of price controls has always benefited Americans and American businesses right?
You made contradicting claims. Which one was wrong?
I get it; our founders stupid, tariff bad, Trump bad, Unions bad, manufacturing bad.
I get it, it makes some prices go up....no, it makes all prices go up.
I asked him, previously, if a $10,000 tariff on imported cars would cause domestic car prices to rise, he said no, because competition.
I then showed him GM made about $900 per car profit and said I guess they'd be glad to just boost output, keeping the same profit per car. I think he ran away without responding.
We would love the government to impose a tariff on our international competitors so we could also increase our prices and earn huge bonuses from the increased profitability. We wouldn't hesitate simply because we know ALL of our domestic competitors would do the same.
Hot-rolled steel is not a “higher quality import from Europe. “
The problem you have is you get all your soundbites, all your information from those who are Trump’s detractors so you really don’t have clue what he stands for. That isn’t Trumps fault that is your own.
If you don’t have the knowledge to understand after the explanations I have offered on this thread, you simply are not able to discern the truth. I can’t help you sorry...
Our little friend from VA is incorrigibly ignorant.
Once his “arguments” are exposed as nonsense, anyone doing so instantly becomes unpatriotic or a communist or worse.
He really should join the Bernie campaign, he being so smart and happy to pay an extra “few cents on the dollar” so that some moron can keep an overpaid union job for a while.
And, of course, he’s only too happy to require that everyone else also pay through the nose. Just because he said so. Because only he knows best.
Why, he’s so smart that he knows better than the entire US economy, if only it would listen to him and his fellow central planners. Why, just wait, he’ll come up with a 5-year plan any time now.
There’s a lot of totalitarian in every protectionist when you get right down to it.
The protectionist nitwittery on FR hasn’t ever stopped in 18 years and probably never will. They loves their stupid tariffs, even though the country was already put through their wringer over 80 years ago.
It’s actually kinda funny. Our Dear Leader Jug-ears loves the utterly failed policies of the 1930s and so do the protectionists.
Maybe that's because, like Trump, you really don't understand the subject and simply repeat the nonsense he's feeding a public hungry for populist drivel. Lots of knowledgeable folks don't understand what Trump is for because he doesn't provide more detail than "we're going to win", or "we're going to negotiate better deals." That's great stuff to the average economic illiterate but doesn't offer much of a solution for those of us who realize it takes more than benevolent bromides to get where he wants to go. It's unfortunate you weren't able to clarify that for us. You're not a very good ambassador for team Trump. Again, just like Trump, you can't get bogged down in details as that would expose the "strategy" for the empty carton that it is.
Speaking of failed policies of the past, Mr. va. refuses to admit that it was protectionist republicans that caused the federal income tax to be created in the first place. He rails against the 16th Amendment clueless to the fact that Republicans agreed to it in exchange for democratic support of the Payne-Aldrich tariff. Protectionists have done so much damage already, and it appears they can't wait to do more. The anti-free trade crowd seems to have a problem with freedom.
You obviously have not looked at my previous posts on this thread where I repeatedly did explain in length...or, you have you are just unable to understand basic economic science. In either case I really don’t see the point in continuing with you. You offer nothing but the propaganda you have been brainwashed with, not one original thought, just a parrot. Well, here is your cracker...
LOL. Explain at length? No, I don’t see that but if you want to believe that you’ve done so then nothing I say will change your mind. It’s great that Trump has come up with some new ideas rather than those old ideas like free market capitalism and limited government. I’d like to know more about how Trump’s ideas are better than what we know to have worked throughout history, but you’re up to it. Maybe Trump at some point in this campaign will eschew the feel good platitudes and provide some real details. In the meantime, thanks for nothing.
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