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To: econjack
It does work. You've been reading to much propaganda from the CATO institute, which was founded with one purpose to promote free trade.

The American market is large enough to support plenty of competition which will foster innovation and drive lower prices.

The tariffs worked well for this country for over 180 years. Since we've lowered them real wages have stagnated and numerous American industries have been off shored.

In fact, if you're not off-shoring, then it's probably only a matter of time, before your competitor does and drives you out of business.

The deliberately forgotten history of free trade PDF

140 posted on 05/08/2015 10:25:43 PM PDT by DannyTN
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To: DannyTN

I’d agree with you, but then we’d both be wrong. I have a Ph.D. in economics and taught university-level graduate and undergraduate courses in econ for 30 years and have a pretty good grasp on how the system works. Tariffs and quotas do not promote economic growth. The best they can do is transfer income from one sector to another. Why do you think so many companies have off-shored their business? You don’t suppose fiscal policy could have an impact, do you? Why do you think new small and medium sized business formations are down so much? Hint: It’s not because of tariffs and quotas, but rather taxes, regulations, and programs like Obamacare.

Some industries, primarily oligopolies, do not lend themselves to “competition which will foster innovation and drive lower prices”...capital costs are simply too high. As to real wages stagnating, you need to look at specific sectors of the economy. Those that have high skill demands have had significant wage increases while those that don’t have not. This is a supply of labor versus the demand for labor issue, not a trade problem.

Your position is one of what is called “protective tariffs’ which are used to protect emerging industries in a “third world” economy. The US hardly qualifies. Fiscal policy could do far more, and much more quickly, to augment economic growth than a tariff approach ever could. Look at the fastest growing economy in the world. Virtually Communistic a few decades ago, they have cut gov’t’s share of GDP from almost 37% to 27%, and cut corporate and personal income taxes down to 15%. The economy responded quickly to make it that fastest growing economy in the world. The country: Chile.

Do yourself a favor and drop the protective tariff as a solution and look at domestic fiscal policy and federal regulations. You’ll have a lot more convincing argument.


145 posted on 05/09/2015 10:40:57 AM PDT by econjack (I'm not bossy...I just know what you should be doing.)
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