Manufacturing rally draws 1,200

New Haven Register ^ | 08/02/2003 | Maria Garriga

[HiTech RedNeck]

Would trade tariffs shrink our already too BIG government? LOL.

It would be nice to get the national debt within hollering range of being paid off... ONCE MORE

[FreedomPoster]

Paging Carl Rove. Carl Rove to the white courtesy phone.

[TaxRelief]

Sixth, make it clear that any nation engaged in subsidizing their industries for export to the USA will be subject to increased tariffs.

China should receive this part of the plan really well. Right now, the major motivator keeping China from escalating hostilities with the US is their desire to preserve their largest customer. In our diplomatic relations focussing on the prevention of a new cold war, our status as a major customer is our most important negotiating card.

[TaxRelief]

It would be nice to get the national debt within hollering range of being paid off... ONCE MORE

Raising taxes is only a temporary fix to an imaginary problem.

Long term reductions of government involvement in everyday minutia is the only cure for "national debt" (do you mean debt or deficit?).

[Dane]

Here is an historical precedent showing that tariffs actually hurting an economy.

The Corn Laws

Overview. The Corn Laws were a series of statutes enacted between 1815 and 1846 which kept corn prices at a high level. This measure was intended to protect English farmers from cheap foreign imports of grain following the end of the Napoleonic Wars.

Note: in this context "corn" means grain of all kinds, not simply the vegetable corn.

Background. During the Napoleonic Wars, the British blockaded the European continent, hoping to isolate the Napoleonic Empire and bring economic hardship to the French. One result of this blockade was that goods within the British Isles were protected against competition from outside sources. Farming became extremely lucrative, and farming land was traded at very profitable rates.

When the wars ended in 1815 the first of the Corn Laws was introduced. This law stated that no foreign corn would be allowed into Britain until domestic corn reached a price of 80 shillings per quarter.

Who Benefited? The beneficiaries of the Corn Laws were the nobility and other large landholders who owned the majority of profitable farmland. Landowners had a vested interest in seeing the Corn Laws remain in force. And since the right to vote was not universal, but rather depended on land ownership, voting members of Parliament had no interest in repealing the Corn Laws.

Who suffered? The artificially high corn prices encouraged by the Corn Laws meant that the urban working class had to spend the bulk of their income on corn just to survive. Since they had no income left over for other purchases, they could not afford manufactured goods. So manufacturers suffered, and had to lay off workers. These workers had difficulty finding employment, so the economic spiral worsened for everyone involved.

Reform. The first major reform of the Corn Laws took place during the ministry of the Duke of Wellington in 1828. The price of corn was no longer fixed, but tied to a sliding scale that allowed foreign grain to be imported freely when domestic grain sold at 73 shillings per quarter or above, and at increasing tariffs the further the domestic price dropped below 73 shillings. The effect of this reform was negligible.

The Reform Act. In 1832 the right to vote was extended to a sizable portion of the merchant class through the passage of The Reform Act. The merchant classes were far more likely to look favorably on changes to the Corn Laws.

The Reformers. Several groups arose during the early and mid 1800s to fight for repeal of the Corn Laws amid other social reforms. Most prominent among these movements were the Chartists and the Anti-Corn Law League. The ACLL began in 1836 as the Anti Corn Law Association, and in 1839 adopted its more familiar name. Despite its social reform agenda, the league drew its members largely from the middle-class; merchants and manufacturers. Their aim was to loosen the restrictions on trade generally, so that they could sell more goods both at home and around the world. After constant agitation, the ACLL was successful, and in 1846 the government under Sir Robert Peel was persuaded to repeal the Corn Laws.

LINK

[TaxRelief]

Great example. Tariffs on Walmart supplied goods would indeed hurt our economy. One needs only to travel to Europe or New Zealand to see how difficult it is to not have access to inexpensive, everyday items.

[meadsjn]

Bush could win re-election in 2004 simply by pressuring Congress to:

• Tax all monies being transferred offshore for imports and offshoring of jobs.
• Close the borders to all immigration and deport illegal immigrants.
• Cut payroll taxes on individuals and businesses to the bone.
• Limit federal spending to the DOD, and eliminate all the other anti-American departments and agencies.
• Return all federal held lands to the respective states, excepting military bases.

Otherwise, Hillary will step in at the last minute and walk away with the 2004 presidency, in spite of the fact that she and Bill were responsible for setting up the dominoes for the fall.

Drastic maybe, but it beats living under communism.

[TaxRelief]

INFLATION

• Measurement of Inflation
  • Definition of Inflation
  • Calculating the Retail Price Index
  • Problems in Using the Retail Price Index
• Effects of Inflation
  • Advantages of Inflation
  • Disadvantages of Inflation
• Causes of Inflation
  • Cost-push Inflation
  • Demand-pull Inflation
• Remedies of Inflation
  • Cost-push Remedies
  • Demand-pull Remedies

---

Measurement of Inflation

Definition of Inflation

Inflation refers to the continual increase in prices. The value or purchasing power of money refers to the amount of goods or services one pound can buy. Inflation means the value of money is falling because prices keep rising.

Calculating the Retail Price Index

The retail price index (RPI) is a monthly survey carried out by the government which measures price changes. The following procedure is used:

• A basket of goods and services consumed by the average family is listed. For example, food, clothing and transport are included in the basket.
• The price of items in the basket in the base (first) year is noted.
• Each item in the basket is given a number value (weighted) to reflect its importance to the average family. For example, food has a higher weighting than transport.
• The price of goods in the basket is recorded every month compared with base year as a percentage (price relative) using the equation:
  
  Price relative = Current price/Base price x 100
  
  
• The price relative of each item is then multiplied by its weighting.
• The new RPI is found using the equation:
  
  RPI = Total weightings x Price relative/Total weightings
  
  The value of the RPI in the base year is always 100. After twelve months the price of good items in the basket may have risen by 25 per cent and that of housing by 20 per cent while the cost of transport is unchanged. Table 16.1 shows how the RPI for year two might then be calculated.
  
  The RPI = Total weightings x Price relative/Total weightings = 12 100/100 = 121
  

Table 16.1 Calculation of the retail price index

Basket	Weighting	Price relative	Weightings x price relative
Food	60	125	7500
Housing	30	120	3600
Transport	10	100	1000
Total	100		12100

The rate of inflation is the percentage change in the RPI over the last twelve months and is calculated using the equation:

Rate of inflation = (Current RPI - Last RPI)/Last RPI x 100

At the beginning of year two the rate of inflation is:

(121 - 100)/100 x 100 = 21 per cent

See the economics section of Biz/ed for a worksheet on calculating and interpreting index numbers.

Problems in Using the Retail Price Index

• Which items should be included in or excluded from the basket of goods?
• Different families have different tastes hence different weightings. How is an average family found?
• Not all regions in the country experience identical price changes.
• For a while new products ( eg mobile phones) may not be included in the index.

Effects of Inflation

Advantages of Inflation

Not everyone suffers from inflation. Some parts of society actually benefit:

• The government finds that people earn more and so pay more income tax.
• Firms are able to increase prices and profits before they pay out higher wages.
• Debtors (borrowers) gain because they have use of money now, when its purchasing power is greater.

Disadvantages of Inflation

• People on fixed incomes are unable to buy so many goods.
• Creditors (savers) lose because the loan will have reduced purchasing power when it is repaid.
• Nationally produced goods may become more expensive than foreign-made products so the balance of payments suffers.
• Industrial disputes may occur if workers are unable to secure wage increases to restore their standard of living.

Causes of Inflation

Cost-push Inflation

Cost-push Inflation occurs when a firm passes on an increase in production costs to the consumer. The inflationary effect of increased costs can be the result of:

• Increased wages, leading to
  1. a wage-price spiral, which occurs when price increases spark off a series of wage demands which lead to further price increases and so on;
  2. a wage-wage spiral, which occurs when one group of workers receive a wage increase which sparks off a series of wage demands from other workers.
• Increased import prices which can be the result of:
  1. a rise in world prices for imported raw materials;
  2. a depreciation of sterling
• Increased indirect taxation

Demand-pull Inflation

Demand-pull inflation occurs when there is 'too much money chasing too few goods' because the demand for current output exceeds supply.

The figure below shows increased demand and increased prices as consumers compete to buy up goods still available.

A major source of inflationary pressure is the government which can print money to buy goods. The monetarist view of inflation can be stated in the equation:

MV = PT

where M = the money supply,

V = the number of times each pound changes hands (the velocity of circulation),

P - the average price of goods, and

T = the number of goods bought (transactions).

Monetarists believe that the values of V and T are fixed so that any increase in M, the money supply, must raise P, the level of prices, ie be inflationary.

Remedies of Inflation

Cost-push Remedies

• Introduce a prices and incomes policy to free price and wage increases.
• Encourage an appreciation of sterling.
• Reduce indirect taxation.

Demand-pull Remedies

• Reduce government spending.
• Increase income tax to reduce consumer spending.
• Reduce peoples's ability to borrow money by increasing interest rates and tightening credit regulations.
• Control the supply of money.

Previous | Next | Contents

These pages are based on original material written by Richard Young of Wood Green School Witney. Content has been updated and diagrams added by Biz/ed.

[Constitution Day]

I smell a demoRAT trying to push a Perot type severing of the Republican party.

It's curious how all these threads have "The Bush Economy" as a keyword.
Very curious indeed.

[meadsjn]

I would like to know where in the constitution does is say the government has a right to tell a business where and how it conducts business.

And just where in the Constitution does it say that American workers will have their pay taxed at 125% (all the payroll taxes) to support a socialist government that represents the interest of foreign countries and betrays the American voters.

[LibertyAndJusticeForAll]

I'm sure you are aware of the history of protective tariffs in the first 200 years of this nation and that the Republican Party platforms historically found tariffs a good idea. Tariffs can be used very effectively, but I'm sure they can and have been misapplied or overdone.
Something along the lines of tariffs are needed to balance the huge trade deficit.
We are up against a very unlevel playing field:
http://www.freerepublic.com/focus/f-news/957418/posts

Even Lou Dobbs has changed his position on tariffs:
http://www.freerepublic.com/focus/f-news/955238/posts

[samuel_adams_us]

Dear President Bush and members of the 108th congress of the United States of America:

We the people of India would like thank you for your representation within your government without any taxation. We appreciate the free education granted to us via the tax dollars of the citizens of the United States and we also appreciate the business you provide us via those same tax dollars. We are so happy that you are willing to represent us, the people of India, without taxation all the while discontinuing your representation of the citizens of the United States, while taxing them and giving us their tax dollars. As much help as you have given us, exporting all of your jobs here, giving us billions in aid, making sure your citizens give up their jobs for us, free education, we almost think that your families are from India. As far as your displaced citizens, we know that this is simply Karma and just as we do nothing for those in our country lying in a gutter, we would never interfere with your citizens' Karma, whom we have displaced with their own tax dollars, that we would like to start a relief fund and help provide for their unemployment benefits as you continue to provide for us and ignore your own citizens. Soon I am sure it will be the United States of India as we are all proud here to have you on board. Mr. President, we are so happy you are just like your father, ignoring your own citizens and giving the rest of the world all of your money. We in kind will continue to ship mangoes to the United States to help feed the unemployed until the eventual collapse of your country.
Sincerely,


Mahatma Gupta.

[HiTech RedNeck]

Way, way before the United States even had such a thing as an income tax, it had tariffs. It would be progress to depend more on tariffs and less upon income taxes.

[samuel_adams_us]

Didn't our president just quote this the other day?

. . government of the People by the People for
the People shall not perish from the Earth.
--Abraham Lincoln

but it sounded like this:

. . government of the People of India by the People of India for the People of India shall not perish from the Earth.
--Abraham Lincoln

[YoungKentuckyConservative]

But how could we have known? This kind of treason has been unheard of in America, until now.

No excuse for an apathetic electorate. I'll tell you like I tell my Father: I hold your generation responsible for losing this country (if you are your 50s and 60s). That's when the debacle was allowed to pick-up steam. I wish I could say my generation had the knowledge, awareness and courage to take it back. But alas, that isn't going to happen. I can only prey the next generation gets their act together, but with the education system firmly in the hand of the socialist-elite and their precious little NEA, I doubt it's going to get any better. In fact, it will most likely get much worse.

Yes, I'm a very patriotic and bitter young man. ;) WHat else can one be when they've researched the facts and understand what's going on. I'm witnessing the slow emergence of a socialist-dictatorship and the eventual uruspation of our freedom. Sad! Sad! Sad!