Posted on 03/30/2016 9:25:38 AM PDT by Pelham
When President Reagan imposed a 100 percent tariff on selected Japanese electronics in 1987, he and the press gave the impression that this was an act of desperation. Pictured was a long-forbearing president whose patience was exhausted by the recalcitrant and conniving Japanese. After trying for years to elicit some fairness out of them, went the story, the usually good-natured president had finally had enough.
When newspapers and television networks announced the tariffs, the media reminded the public that such restraints were imposed by a staunch free trader. The less-than-subtle message was that if "Free Trader" Ronald Reagan thought the tariff necessary, then Japan surely deserved it. After more than seven years in office, Ronald Reagan is still widely regarded as a devoted free trader. A typical reference is that of Mark Shields, a Washington Post columnist, to Reagan's "blind devotion to the doctrine of free trade."(1)
If President Reagan has a devotion to free trade, it surely must be blind, because he has been off the mark most of the time. Only short memories and a refusal to believe one's own eyes would account for the view that President Reagan is a free trader. Calling oneself a free trader is not the same thing as being a free trader. Nor does a free- trade position mean that the president, but not Congress, should have the power to impose trade sanctions. Instead, a president deserves the title of free trader only if his efforts demonstrate an attempt to remove trade barriers at home and prevent the imposition of new ones.
By this standard, the Reagan administration has failed to promote free trade. Ronald Reagan by his actions has become the most protectionist president since Herbert Hoover, the heavyweight champion of protectionists.
The Reagan Rhetoric: Supporting Free Trade
Is Ronald Reagan..
(Excerpt) Read more at cato.org ...
Interesting concept
Free Trade or Tariffs ping
Left out was that FDR in his first term had tariffs as well.
There can no true Free Trade will of these groups that pretend they promote such. I say we get out of the WTO, G8, and NAFTA to start with.
I’m a Trump supporter but from what I’ve read, Cato is right and you are right for posting this.
Tariffs and protectionism are not only exercises in futility but typical examples of how a country shoots itself in the foot.
Tariffs and protectionism do not address the underlying causes of business and industry fleeing the U.S. Tariffs and protectionism are examples of the futility of more government layered on problems government created in the first place.
People need to follow what’s right regardless of who does or doesn’t follow what’s right, whether it’s Reagan, Trump or anyone else.
conservatism is in a crisis right now....
there’s an old saying that generals are always prepared to fight the last war will too many conservatives seem to be prepared to fight the last war
Reagan first and foremost was Pro America ...his conservatism serviced the American people’s interest it adapted and changed its priorities as different circumstances arose
too many conservatives are “Maginot Line” types following Doctrine that’s outdated
in the eighties the greatest threat to this country was the Soviet Union
right now the greatest threat country is the erosion of its sovereignty and actually bordering on disappearing from earth ...its being flooded by illegal immigration and fake free trade then reality is not free at all but sucking the lifeblood out of us
to save this country I’m not going to regurgitate a stock Maginot Line conservative Doctrine blindly
Says more about Cato than anything.
Look Reagan made Americans proud to be Americans again. Reagan showed strength through adversity! Regan never backed down.
That’s what Reagan was mainly about and that is what Trump is about.
Go Trump Go!
Unfortunately, "free trade" has become almost a religion in some sections of the conservative movement and the Republican Party, to the point where they value free trade purity more than the national interest.
The root cause of losing our businesses is the FEDERAL GOVERNMENT. The federal government has created an unfriendly business environment in the U.S. with boneheaded policies like
- minimum wage - artificially high labor costs are killers of jobs and send companies elsewhere
- taxes
- regulations
- federal protection of unions
Again, the issue is the unfriendly American business environment and weak American competitiveness caused by the skyrocketing costs of doing business due to GOVERNMENT INTERFERENCE like taxes, minimum wage, regulation, and unions. When those things are addressed, business will WANT to return/stay because of cost benefits.
Let the voluntary cooperation of the market economy free of government interference work. Don’t layer more government interference upon that which is the root cause to begin with.
So much for the myth that Smoot-Hawley and Hoover's "protectionism" was what caused the Great Depression.
The Fordney-McCumber Tariff of 1922 wasn’t much different than Smoot-Hawley, 1930.
Those who wish to attribute the Great Depression to Smoot-Hawley need to explain why Fordney-McCumber was followed by the Roaring 20s rather than a depression.
The cause of the Great Depression was the collapse of the American banking system over the years 1930-33. One third of American banks failed and one third of the American money supply simply vanished as fractional reserve banking went into reverse.
This is all covered in Milton Friedman and Anna Schwartz “The Great Contraction”. The banking collapse was due to series of blunders by the Federal Reserve combined with the absence of FDIC, Federal Deposit Insurance.
http://papers.nber.org/books/frie65-1
Well said.
You OCCASIONALLY have to fight a trade war. whether you want to or not.
If the arabs are forcing the oil price low to drive us oil companies out of business then you better fight back.
Because if they success then oil price will go back higher than they ever were.
In Reagans case, they Japanese were deliberately undecurtting us electronics companies and trying (and pretty much succeedng) in driving us electronics companies out of business
The reason US prices were so high, though, was because of UNIONS
What these “Free Trade” idiots believe is that lowest price is fair trade. Well, it isn’t. We require various regulations and standards foreigners do not require. Why should an American business be required to have such regulations and then compete with slave nations??
Free trade, as a intellectual exercise, is - like socialism - a nice notion.
However, pure socialism is not possible, due to human nature, and the people in charge will always seek their own best advantage.
Free trade is another similar notion. It is impossible to trade fairly “freely”, when your trading partner has such a vast gulf between you and them in worker pay, working conditions, and monetary worth.
It is not free trade worthy when say... Mexico can produce and sell something here for $1.00, when it costs us $5.00 to produce it - due to their lower wages and working conditions.
I agreed on all points.
“Tariffs and protectionism are not only exercises in futility but typical examples of how a country shoots itself in the foot.”
Tariffs make foreign goods more expensive, which hurts consumers. When all is considered, trade is reciprocal. If we buy less, others will buy (or borrow) less from us. Imports go down, but so too exports.
Other countries enact tariffs or other protectionist measures. They are not helping their citizens by keeping out foreign (including US) goods that their citizens would have bought.
They are doing something stupid that harms everyone. Should we retaliate by doing something stupid that hurts everyone? No.
“Tariffs and protectionism do not address the underlying causes of business and industry fleeing the U.S.”
Very good point. They are a big distraction.
Here are some other places to look. Are union wages/benefits too high when there are many who are unemployed? How much do we gain from job-killing environmentalism? Does our Federal tax system work against American workers? What are trade impacts of Federal deficits? I’ve been thinking about this last question ever since Walter Williams mentioned it.
The Japanese and Chinese are major purchasers of US government bonds. I guess we pay a pretty good interest rate. One could argue that the reason they have to sell us so many goods is that they must in order to buy our debt! A more solid (yet abstract) statement is that the exchange rate value of the dollar is as high as it is because foreigners want to buy our debt. If government controlled spending and did not borrow, the value of the dollar would fall. A 20% fall in the value of the dollar would have the same impact on imports and exports as a 20% tariff.
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