It is very entertaining to read about the debate on tariffs. Few that I have read seem to really understand the situation. They appear to suffer from taking Econ 101 in our colleges. Here are my views.
I have seen no one who looks at all the alternatives or who uses the concept of the "free body diagram" principle. Most sound like the liberals who use "out layers" or claim that the idea is not "perfect". When most claim that tariffs are bad, they site some group who are hurt by the tariff. In a large country like the USA that has a complex economy, do you really think that any decision or policy could help 100% of the population? No! Notice that I never use the expression "all" because I know that it is impossible to satisfy or help "all" of the people. Look at WWII where we freed Europe? Was that good or bad? Think of all the young American soldiers who died? That was "bad". The only war that would be "good" would be one where "zero" of our soldiers were killed and we know that would be impossible. More of our pilots have been killed in training accidents than in the wars we have fought in the past 10 years.
I asked a friend about the "primal and dual" of tariffs and he had no idea what I was talking about. A tariff is a "primal" action that has as its purpose to reduce the amount of products imported into the USA. It does this by making imported products more expensive. Now, what is a "dual"? A "dual" is an action that comes at the same problem from the opposite direction. If we want to make imported products more expensive so that our citizens don't buy them, why don't we just ask our citizens to not buy imported products? If they were to do that, their neighbor might be able to get a job making the product. By buying the cheaper imported product at the expense of one's neighbor is just a way of "gaming" the system or cheating. Aren't we all in this economic system together?
In the case of putting a duty on products from China, we know that China will come back with a duty on our corn. That will hurt farmers and they will cry to Washington DC and our politicians will cave. This is because the tariff is not "perfect" and we don't have the collective guts to realize that the tariff is still in the total interests of the USA.
If you used the logic of Econ 101, the tariff might lower the total economic production of the total economies of the China and the USA, but is that the correct objective? No! It is my position that a tariff would raise the economic production in the USA and lower the economic production in China. I look at that as being "good". How about you? In Econ 101, they don't teach about what policies are "best" for the USA. They focus on what they claim is the "big picture". What we need are professors in our colleges and universities who teach about what is good for the USA for a change.
Farmers will be hurt by tariffs, but the hurt would be less had we not given them "candy" by mandating the use of ethanol. Due to this bad policy, farmers were encouraged to grow more corn and pay more for their land. The increase in the price of farm land may have looked good in the short term, but it is clearly bad in the long term, I read that farmers were hard hit after WWI because they had a "one time" demand for their products in Europe. After the farmers in Europe recovered, they did not need farm products form the USA. Those are the facts of life and the USA farmers should have been honest about the cause and thus the cure.
Tariffs are not perfect, but what is? What alternative is? If you don't have better idea, stop complaining!
I have seen no one who looks at all the alternatives or who uses the concept of the "free body diagram" principle. Most sound like the liberals who use "out layers" or claim that the idea is not "perfect". When most claim that tariffs are bad, they site some group who are hurt by the tariff. In a large country like the USA that has a complex economy, do you really think that any decision or policy could help 100% of the population? No! Notice that I never use the expression "all" because I know that it is impossible to satisfy or help "all" of the people. Look at WWII where we freed Europe? Was that good or bad? Think of all the young American soldiers who died? That was "bad". The only war that would be "good" would be one where "zero" of our soldiers were killed and we know that would be impossible. More of our pilots have been killed in training accidents than in the wars we have fought in the past 10 years.
I asked a friend about the "primal and dual" of tariffs and he had no idea what I was talking about. A tariff is a "primal" action that has as its purpose to reduce the amount of products imported into the USA. It does this by making imported products more expensive. Now, what is a "dual"? A "dual" is an action that comes at the same problem from the opposite direction. If we want to make imported products more expensive so that our citizens don't buy them, why don't we just ask our citizens to not buy imported products? If they were to do that, their neighbor might be able to get a job making the product. By buying the cheaper imported product at the expense of one's neighbor is just a way of "gaming" the system or cheating. Aren't we all in this economic system together?
In the case of putting a duty on products from China, we know that China will come back with a duty on our corn. That will hurt farmers and they will cry to Washington DC and our politicians will cave. This is because the tariff is not "perfect" and we don't have the collective guts to realize that the tariff is still in the total interests of the USA.
If you used the logic of Econ 101, the tariff might lower the total economic production of the total economies of the China and the USA, but is that the correct objective? No! It is my position that a tariff would raise the economic production in the USA and lower the economic production in China. I look at that as being "good". How about you? In Econ 101, they don't teach about what policies are "best" for the USA. They focus on what they claim is the "big picture". What we need are professors in our colleges and universities who teach about what is good for the USA for a change.
Farmers will be hurt by tariffs, but the hurt would be less had we not given them "candy" by mandating the use of ethanol. Due to this bad policy, farmers were encouraged to grow more corn and pay more for their land. The increase in the price of farm land may have looked good in the short term, but it is clearly bad in the long term, I read that farmers were hard hit after WWI because they had a "one time" demand for their products in Europe. After the farmers in Europe recovered, they did not need farm products form the USA. Those are the facts of life and the USA farmers should have been honest about the cause and thus the cure.
Tariffs are not perfect, but what is? What alternative is? If you don't have better idea, stop complaining!
