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 ...
Agreed. I've often argued that the U.S. should just cut import taxes and to hell w/ foreign tax collectors. The thing is that when Sr. Valdez sells me coffee he always wants to be paid in pesos, and those I can only get when I sell my goods to Valdez' neighbors.
Colombian tax hikes mean less coffee for me and that's why bilateral tax-cuts save me more money than the unilateral kind.
Yeah, what I remember is that all Bush wanted was a "new tone" and to "reach out across the aisle". All that came of it was the Dems bit his hand off.
Because the same argument used about why the US should not retaliate applies in spades to these economiess more depent on selling to the USA then the USA is on selling too them
I love the way people simply ignore fact and cling to the “Free Trade” dogma.
The customer (the USA) has other options, the seller “such as China” does not have other markets nearly as profitable. Therefore there is build in leverage on the customers side, which we refuse to use.
We can do without China much easier then they can do without our market. However, because we follow this ridiculous “Manage d Trade” policy, we never use our leverage to stop their unfair trade and currency practices.
Manged Trade is the notion we can use US Trade policy to help achieve US Foreign Policy goals. It made sense in the Cold War, it is anachronistic notion now.
We are encouraging American manufacturers to engage in employment arbitrage when we don't either seek to normalize the embedded costs of our regulations, or to eliminate the expenses those regulations add to a company's product cost. You can't reasonably expect a country with first-world sensibilities to fairly compete in a third-world manufacturing environment.
Not sure where you get this "we" stuff, last time I looked I had more jobs and more businesses than before. It's just that I'd like to do even better and I find it a lot more bother when some guys try to raise my taxes so they can feel more 'protected'
Go back and buy some mule harnesses. Your argument is equally applicable to that. Either you're really bone deep ignorant or you're pretending to be that way. Either way I haven't got time to educate you.
While we frequently disagree. Here I think you've said this really well.
The Tariff Twits live in a fantasy world. Unthinkingly, they overlook the inevitable Step 2 in any tariff regime - acquiring special advantage though political power.
15 minutes after a tariff is imposed, lobbyists seek - and always get - special treatment in the form of exemptions, delays, etc., from politicians. This further distorts price signals in the market.
I learned all I needed to know about tariffs in 1982. I was shopping for my first new truck and had decided on a Toyota. Right then, Reagan capitulated and congress imposed a $500 tariff on Jap trucks (the truck cost about $9000). THE NEXT DAY the Detroit Big 3 raised the sticker price of their competing products by $495. So, not just Jap truck buyers were harmed; EVERY truck buyer was harmed. (It’s called economics.)
Funny, the “job saving” stories appeared on all the networks, but no reporter asked me about the $500 hole in my pocket. Through political influence, I was “taxed” to support a union job and an inefficient producer was subsidized. That’s the way tariffs work - every time.
Increases in standard of living are inextricably tied to productivity gains. By distorting the market’s pricing system, we are all poorer. Some are just too stoopid to recognize it.
In the case of consumer electronics what is the other option? Or textiles. Or furniture.
...the seller “such as China” does not have other markets nearly as profitable.
Or the rest of the world either, assuming that President Trump will not direct his trade ire solely against Mexico and China.
Therefore there is build in leverage on the customers side, which we refuse to use.
And that leverage is to either tax it with a tariff, which U.S. consumers would pay, or refuse to import it, which would leave U.S. consumers without.
We can do without China much easier then they can do without our market.
Cutting off trade would have a terrible impact on both China and the U.S.
So in other words, we are going to make a bunch of guesses that are unverifiable with any data, that just happen to validate our theory.
“Not sure where you get this “we” stuff, last time I looked I had more jobs and more businesses than before. It’s just that I’d like to do even better and I find it a lot more bother when some guys try to raise my taxes so they can feel more ‘protected’”
Trump will cut your taxes...pay attention...it is a multi dimensional problem that HAS cost millions of jobs and thousands of businesses to move...if you do not understand that you have not been paying attention. Wages have been stagnant, aggregate demand is stagnant and actually shrinking slowly. Those “cheap goods” are not so cheap...
“Beyond the taxes, though are a multitude of other hidden expenses for businesses. “
You are absolutely right, it is a multi-dimensional problem. I don’t think any of the candidates do not understand this better than Trump.
But, to resolve the problem we need to attract back many of the businesses we lost...that is part of the solution to growth. And, there is no reason any other nation can compete with us in a balanced trade deal. Americans have always been able to compete until recent times where our politicians have stacked the deck against us so badly.
And how many more jobs would there be with onshore manufacturing?
You never stop with your incessant trade nonsense, do you?
I’ve already explained why your simple-minded garbage about tariffs is ridiculous nonsense.
Smoot-Hawley managed to reduce trade by about 70% in the early ‘30s. Today, with just shy of an 18 trillion GDP, do you want to whack international trade by 70%?
That would be about 1.9 trillion in US imports, over 10% of GDP.
It would happen quickly. Impose a 35% tariff on Chinese goods. Followed by immediate retaliation by the Chinese.
Followed by more US tariffs on everyone who rushed to fill the Chinese void. Followed by more retaliation by all of those countries. And back and forth and so on and so forth and on and on until someone finally came to their senses many years later. It’s called a trade war.
Which would take down another 1.6 trillion of exports.
Total damage to the economy in short order? 3.5 trillion.
20% of the entire economy.
Never mind the add-on effects of knocking 20% of the economy on its butt. Never mind the shortages and rapidly increasing prices costing people hundreds and hundreds of billions and the depression it would trigger.
For what? So that a handful of people in industries which no longer exist in the US could have jobs that you pine for at some distant future point that pay spit?
You really have no economic clue at all. Go read some Ricardo on comparative advantage and get back to us when you have a better grasp of things.
I won’t hold my breath.
I have Engineering degrees in EE and ME so what do you got?
Fixed it.
Re-writing history is what Communist do.
The problem is workers can vote. Too bad isn't it?
When the CEO of Carrier was asked to name a tax or regulatory policy that was causing the move to Mexico he could not answer the question.
Free Traitors™ like you can < expletive deleted> my < expletive deleted >.
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