Posted on 08/25/2016 3:45:08 AM PDT by expat_panama
You work and get paid. To whom do your after-tax earnings belong? Do they all belong to you or does some portion of them belong to the neighborhood grocer whose store you patronize? Who should have first dibs on the money you've earned: you or the auto dealer who sold you the last car you bought?
In both cases the correct answer indisputably seems to be “you.” But not so fast. Typical discussions of trade policy imply that the answers are “the grocer” and “the auto dealer.”
When politicians promise to raise tariffs on imports, they are promising to penalize you for spending too little of your money on products sold by domestic suppliers. The presumption is that domestic suppliers of steel, of textiles or of tires are entitled to a portion of your income. And if you, by buying goods from foreign suppliers, refuse to turn over that portion of your income to domestic suppliers, you must pay a penalty.
Clearly, supporters of tariffs believe that certain domestic producers have a higher claim on some portion of your income than you have.
Does there exist a legitimate justification for this belief? I think not, for none of us supposes that when we patronize a merchant we thereby encumber ourselves with an obligation to continue to patronize that merchant indefinitely.
Suppose that a new supermarket — call it “Jack's” — opens up nearby. Upon your entering Jack's for the first time, the owner informs you that a condition of your shopping at his store is that you must continue, each and every week from here on in, to spend at his store an amount of money that equals the amount of money that you'll spend on your first visit to the store. Would you accept? Surely not.
While nothing in law or ethics prevents Jack from demanding those terms, you'd find it intolerably burdensome to saddle yourself with such a legal obligation.
In fact, while it would be valuable for Jack to secure such a legally enforceable promise from you, he doesn't demand it because he knows that you'd not grant it. Or Jack knows that he'd have to offer to you something remarkably valuable in return, such as his contractual commitment to always charge you prices dramatically lower than those charged by rival supermarkets.
So in reality the deal is that by shopping at Jack's supermarket, you incur no obligation to continue to do so. If Jack wants your continued patronage, he must earn it.
Eventually an even newer supermarket opens just outside of town. This one's owned by Jill. Jill's selection is better and her prices are lower than Jack's. So you start shopping at Jill's supermarket.
Unhappy with your choice, Jack successfully lobbies the city council to slap a special tax on you for every dollar's worth of groceries that you buy from Jill's. You're penalized by the state for spending your money as you choose. The implicit premise behind this special tax is that Jack has a right to a portion of your income.
There is no difference whatsoever between this special tax and a tariff on imports.
Donald J. Boudreaux is a professor of economics and Getchell Chair at George Mason University in Fairfax, Va. His column appears twice monthly.
And this guy is the department chair?
The university must have a really weak economics department.
Ah. Here I thot the question was whether we got a bad deal or whether America will be able to manufacture arms in time of war or whether the American worker has a good job. Every time we answer one question the question changes, and in the mean time the money I earned by learning a new trade gets taxed to pay for ‘protecting’ some clown that didn’t learn a new trade.
Your fellow blue collar Americans are “clowns”? Spoken like a true America-hating Democrat. I can see why you would be thrilled with the America-hating trade policies of Hillary Rotten Criminal and Government Sachs.
The choice right now is Trump or Hillary. And you are sure working hard to suppress support for Trump here. Hillary and the kenyan thank you. Birds of a feather...
Yeah but not from China or Mexico two of our biggest trade partners.
How about raising the tariffs to where they should be around 35%, and cutting personal income taxes by 35% along with the elimination of the corporate and death tax?
You would have a sudden boom in our economy, and tax revenues would sky rocket.
Testing for ZOTS.
Are you still here?
1) comfortable paying a little more to benefit your community by supporting local manufacturers and producers, who in turn hire local workers who are paid sufficiently to have a home like yours, who then purchase commodities at the local market where you shop, where the profits from the sales go back to the manufacturers and producers to expand and/on hire more workers and/or raise their pay to spend more at the local markets;
or
2) you're comfortable knowing that you saved a few bucks on the backs of subsistence workers who live in poor conditions, who are being exploited by foreign government-controlled businesses that steals technology and pollutes someone else's backyard.
I prefer to be part of a value chain that benefits my community first, and then shares the surplus with others. Sustaining our own supply and value chains is how we get to sustaining wartime manufacturing or long-term occupational stability.
-PJ
Ah, the perfect environment for cronyism. But you're against cronyism, right?
You appear to be very generous with other people's money as long as it is, allegedly, protecting jobs. Big government conservatives have a lot in common with big government liberals. It's all good until you run out of OPM.
We are trying to replace embedded elitist cronies from our government to prevent special treatment like you are alluding to.
Applying case-by-case assessments by honest Americans with no vested interests other than a want of a common improvement is not a crime nor action worthy of blanket condemnation as you intend. We don’t really have any further point of discussion frankly. I’m not a wise ass.
Arguing in favor of free people being able to freely choose the products and services that benefit them and their families without government interference is how democrats view the economy?
Little early to be hitting the bottle, eh?
[TARIFFS ARE DUMB]Tell that to the countries that impose them on our products in "free trade" agreements.
Some people are too stupid (you?) to understand the logic that the mere threat of tariffs on products from "free market" countries that impose tariffs on or even block our products will/can improve OUR export markets.
But I understand the concern from your selfish standpoint...or maybe it's really just more anti-Trump bullshit.
Arguing in favor of free people being able to freely choose the products and services that benefit them and their families without government interference is how democrats view the economy?
Little early to be hitting the bottle, eh?
It’s a veiled hit on Trump and you know it. Levin and other never Trumpers have been tantruming and smearing Trump about this endlessly for weeks/months.
And yes, expending any energy in this direction right now only benefits Hillary Rotten Criminal. OP shows no interest here in defeating Hillary. None. Therefore, I question his/her motives.
No, you're doing just the opposite.If freer trade is harming some part of the economy, who will determine the remedy? Who gets to decide the tariff and who gets to determine the quota? Who determines which companies will receive the protection? It's government bureaucrats, of course. Why do you believe when it comes to trade that government suddenly becomes reliable, capable and responsible?
You want to empower government with greater influence over the economy and to take more of my money by raising taxes. Trying to soften that salient fact by calling for case-by-case assessments is laughable. Do you also believe that placing the term 'democratic" in front of "socialism" somehow changes it? Government doesn't create fairness in case you weren't aware.
I am in favor of anything that reduces the size and influence of government. The state is not entitled to more of our money. Instead of demanding government protect us from competition, you should be arguing for lower taxes, less regulation and total reform of the tort system. That would actually yield the results we want. Instead, you demand more and bigger government. Mind-boggling.
You assume to much because you have some prefixed notion that ‘free trade’ solves all. In the ideal sense, you may be right but ‘free trade’ is NEVER that. There are always foreign governments and interests seeking to make a buck using influence and non-free tactics.
We disagree. Okay.....you aren’t going to change apparently. Neither will I. I am at least hoping we both will vote for Trump.
Back when our country was growing, the federal government was largely financed by tariffs and excise taxes. We did pretty well; but then came the income tax. Game over.
Trump is a smart guy who knows a lot about finance and economics. He says what he says to get guys like you to join the train. He's going to negotiate better trade deals, which is good, but he is never going to impose massive tariffs and start a trade war because that would be bad for the economy. Instead, he will lower regulations and taxes which will serve as a catalyst for Yuge economic growth. If he said that, though, guys like you would call him a globalist traitor. This way both sides vote for him. He's a genius.
You have a very fertile imagination. Free trade is about freedom and it is the exact opposite of protectionism. Protectionism empowers government at the expense of the individual and is a sure fire method for increasing cronyism. Free trade, however you might define it, reduces taxes and government control of the economy which makes government bureaucrats less influential resulting in less cronyism.
Free trade may not always work out like Adam Smith, Hayek or Friedman envisioned, but pursuing it is light years better than pleading to government bureaucrats for protection.
Veiled threat at Trump? That makes no sense at all since his name never came up in the comments. Funny that you call me a never Trumper when I’m foregoing work and family to walk precincts and man phone banks to get Trump elected. Not to mention the checks sent to his campaign. No, the never Trump epithet is being hurled by guys like you because you don’t have an argument to make in defense of your big government wants.
Trump is a smart guy who knows a lot about finance and economics. He says what he says to get guys like you to join the train. He’s going to negotiate better trade deals, which is good, but he is never going to impose massive tariffs and start a trade war because that would be bad for the economy. Instead, he will lower regulations and taxes which will serve as a catalyst for Yuge economic growth. If he said that, though, guys like you would call him a globalist traitor. This way both sides vote for him. He’s a genius.
Glad to hear you a volunteering for Trump. I never meant to call you a never Trumper. My comment was directed at Levin and the professional never Trumpers now campaigning for Hillary.
But the fact is there is a now sophisticated campaign to depress support for Trump among conservatives. Using issues like trade and now immigration. Don’t get sucked into those debates right now. All that matters now is beating Hillary. Suppressing the vote is how the kenyan beat 47% Romney in 2012 and they are attempting to do it again.
And you are a contrarian. I invite you to go to the US Constitution Article 1 Section 8 and read about duty and impost power (tariffs) as responsibilities of the government.
Being against crony liberal government is one thing. Being against all government is another.
Who would you rather pay, the supermarket, or the IRS?
Tariffs are taxes and unless you are in favor of higher taxes, you should be in favor of no tariffs. Tariffs don't protect anyone except those who are politically connected. The impetus for all technological innovation and progress is the profit motive and a competitive economy. Protectionist economies are not competitive or innovative. Wanting huge reductions in taxes and regulations, along with stopping the tort lawyers, doesn't make someone against all government. It makes them an advocate for conservatism.
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