Ugh. By "absolutely protective" I didn't mean solely protective or exclusively protective. I meant "absolutely, they were protective."
Tariffs have been around for a long time. Many, if not most, countries have them today, including the United States. This vilification of them is silly sophistry.
Uncle Milty on protectionism (this has been linked before):
@Tom C: "Yes, the US strategy to choke the Soviet Union economy during the arms race. It both: (1) was successful, and (2) benefited the United States."
Except that we did trade w/ the Soviets during the cold war. We bought a ton of grain from them:
One thing to note is that Trump has maintained that he will dump the tariffs if Canada & Mexico renegotiate NAFTA... which suggests it's just an opening gambit (i.e. he's willing to tank the U.S. economy knowing it'll bring down the rest of north america forcing our biggest trade partners to the table).
And he's clearly got enough of an unhinged reputation that it might work (who knows).
Also worth noting, Europe intends to put sanctions on Harleys (made in Wisconsin), and bourbon (made in Kentucky).
Except that we did trade w/ the Soviets during the cold war.
That really wasn't the question. The question was: Can anyone cite an example of an "intentionally malign strategy of a foreign government" to undermine another nation's industrial base? Although, in this case the US undermined USSR's economic base, actually, by overheating the arms industry.
I'm not too concerned about the increase in steel prices.
I'll just increase my prices to cover my costs.
Then increase them again for the extra I'll be paying for the hard goods I buy.
It's worth it to have a viable basic steel and aluminum infrastructure in place.
Trump is a negotiator. This is the initial position. You take an initial position well past where you want the eventual result. That gives you room to negotiate. Already NAFTA revision has been mentioned... probably the real goal.
Yes, vilification of tariffs in general is silly sophistry. Revenue tariffs can serve as an efficient source of revenue for government. On the other hand, the conclusion that protectionism, and a policy of protective tariffs, amounts to self-defeating folly is sound economics.
I suppose one could argue that the Reagan defense buildup was an "industrial policy" but I think that's stretching the concept. Reagan's idea was to bankrupt the Soviets with an arms race they couldn't win. Reagan didn't otherwise intend to direct US industry toward specific goals. Defense policy, yes. Industrial policy, not so much.
And, yes, perhaps Trump is merely pretending to be a bloviating idiot. On the whole, his actions have been turned out a whole lot better than his pronouncements.
Any form of interference in the free market is bad, but tariffs and subsidies are absolutely necessary in the capitalist economic system, to protect those who need to sell nature's assets to survive. In a barter economy these actions are totally destructive of the entire economy. The growing population made the barter economy fail under its own weight and was exacerbated by the industrial revolution without a corresponding decrease or even a status quo in the population. When mercantilism took over those who owned nature's assets had a monopoly that was broken up by the so called Trust Busters (Teddy Roosevelt among them). This resulted in corporate executives stealing the now diluted ownership profits with captive boards of directors. No one in a corporation adds anything to its product that warrants a salary in the millions. Actions of government, particularly the tax laws have not diminished this advantage.
Following the drought of the early 1930s the government gave labor unions the ability to steal through collective bargain and its power to extort higher wages and benefits and the banks protection from any loss. For a time the jobs were protected by tariffs but destroyed our export markets which is where we find ourselves today. Still we keep producing more consumers and inviting more to come to our country. Very few jobs pay enough to support a family of four if we are to continue the existence of the human race and far fewer jobs are being created than there are person being born that will need them, if only to survive as an individual. Yet, we subsidize out of wedlock females and their progeny whose only hope of survival is the dole. If you doubt this, just look at the welfare rolls and numbers of homeless flocking to our cities to beg and they are growing, not stagnating or reducing. It is an inherent characteristic of the capitalist economic model but when the government that imposes it is overthrown, the next just implements the same system, having known no other. If we don't change the model we will, at a date that can actually be calculated quite accurately be fighting each other over food and vanish as did the dinosaurs before us. Before that time we have a solution that I have laid out in my book The Real Economy. If we don't act before, the flood of refugees from the south will have taken that choice away from us.
Another new point! Advance the discussion!
And while you're at it...consume some currency. Light a fire with $20 bills.
Here's a different take on steel production from Terence Corcoran, who happens to be a Canadian:
The world is awash in excess steel capacity and the global market is being flooded with surplus production. Nobody wants to act alone. China claims to be working to reduce its capacity. The EU has warned Trump not to raise tariffs — after it raised duties on steel from Brazil, Iran, Russia and the Ukraine.
What Trump may have done, to the horror of free-trade purists but for the benefit of all, is raise the global steel crisis from its mired position within the EU/OECD/G20 machinery and brought it to the attention of the outside world.
Heh. Once again, Trump's actions reveal the stable genius his pronouncements belie.
Tariff laws are the purview of the Congress and the Congress cannot delegate this power to the Executive. It is why we have the protection of the separation of powers in the first place. If the Congress passes a law that gives the President the power to change it, it is unconstitutional. However, since neither the Congress, the President or the Supreme Court pay any attention to limits imposed by the Constitution, what can one do. You can have high wages and low prices if the things you are buying are made outside the country. Similarly you can have your cake and eat it too. Both statements are true until you run out of high paying jobs and run out of flour. We have already run of jobs that provide an income for the nuclear family so necessary for the survival of the race and we will soon run out of flour.
One can never have too much flour in the pantry. Even if it's white flour, which is granted superior status in the grand cross section of flours, simple because of its color.
What we need in this world is flour justice.
@Tomc: "That really wasn't the question. The question was: Can anyone cite an example of an "intentionally malign strategy of a foreign government" to undermine another nation's industrial base? Although, in this case the US undermined USSR's economic base, actually, by overheating the arms industry."
Ah, sorry, I thought you were talking about trade.
I recall when Trump was elected that several Eastern billionaires said they would be investing in America. I have yet to hear about any of them actually doing so. The reason is that they made the promise with a caveat and that is that if they invested Trump would have to up the tariffs on similar overseas producers so the investor would enjoy a monopoly.
Does anyone believe that if we put a tariff on light consumer goods such as television sets, appliances and the like that manufacturing of these items would return?
Free trade was destroyed when the economic system of barter collapsed under the weight of overpopulation where people had to work for someone else to earn a living in a new economic system called mercantilism where wealth was measured in money as opposed to the skillful use of one's time. The industrial revolution has made a return next to impossible and is the root cause of the unequal distribution of wealth, now totally controlled by banks and administered by the government they employ.
They need someone to replace Gary Cohn; anyone have any ideas for an economic savant?
I don't know his or her name but I do know what the qualifications must be.
1. Popular enough to win an election where the platform is to redistribute wealth evenly through a system similar to barter where everyone gets enough and those who work get more by working for those who do not.
As you can imagine, even Jesus Christ would have a fat chance running on that platform.
Memo to the local savant; Gary Cohn's position is not an elective one.
But you knew that, right?
Check the book!