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re: Thomas Sowell criticizes the tariffs President Trump instituted
Posted on 4/3/25 at 7:50 pm to RohanGonzales
Posted on 4/3/25 at 7:50 pm to RohanGonzales
quote:
How can you so blatantly misinterpret a simple statement?
You missed the point (not shocking)
MAGA has adopted multiple positions/goals for tariffs that can't co-exist.
The 2 primary ones are the "bring jobs back" and "fair trade" goals. Short term could lead to "fair trade" (other countries eliminating tariffs), but cannot lead to the "bring jobs back" goal
3
Posted on 4/3/25 at 7:52 pm to Centinel
quote:
It’s a goddamn American right to have our products tariffed by other nations. The more our goods are tariffed, the more freedoms we have. Capitalism and free trade thrive on other countries slapping tariffs on our goods and services while we bend over and say “thank you sir”
Friedman covered this decades ago
quote:
The interesting question, and the question I want to explore with you today, is why is it that interference with international trade has been so widespread, despite the almost uniform condemnation of such measures by economists? Why is it that you have the professional agreement on the one side, and observe practice on the other which departs so sharply from that agreement? The political reason is fairly straightforward. The political reason is that the interests that press for protection are concentrated. The people who are harmed by protection are spread and diffused. Indeed the very language shows the political pressure. We call a tariff a protective measure. It does protect; it protects the consumer very well against one thing. It protects the consumer against low prices. And yet we call it protection.
Each of us tends to produce a single product. We tend to buy a thousand and one products. If we impose a tariff on steel, or restrict imports of steel in other ways, the people who benefit are visible and clear and available and apparent. They have a very strong interest to press for restraints in that respect. The interests of the rest of us are very diffuse. Each of us will pay a few pennies more. We don't have the same interest to oppose it.
Let me take a much more extreme case that you may think does not come under the heading of protection but yet it does. We have a program of subsidizing the merchant marine, the maritime industry. That is really protection because what' we are doing is taking measures to prevent the use of foreign ships, that is, of importing the services for transporting goods. Those measures to benefit the merchant marine through ship building subsidies, through operating subsidies and so on, involve a total expenditure each year of roughly $600 million. That amounts to about $15,000 per year for each of the 40,000 people who are affected. You may be sure that they have every incentive to spend a lot of money on lobbying, on giving contributions to political candidates, and so on to see that continued. But $600 million with a population of two-hundred million people, that's three dollars apiece for each of us. Which one of us is going to go to Washington and lobby our congressman to avoid that extra three dollars of taxes?
While, on a superficial level, it's very easy to see why we have had tariffs and other restrictive measures such as the maritime subsidies, such as the recent import quotas, because producer interest is concentrated and consumer interest is diffused, that alone is not really a fully satisfactory answer. Let me take another example of exactly the same thing. Why have we had price supports of farm products to take up a subject of special interest here where there are special interests? (We're all of us special interests; it's only the other fellow who's a special interest.) Why have we had farm price supports? You will find it very hard to find any economists who will support farm price supports. This is another case in which the consumer is simply being protected against low prices. Why do we have them? Because the agricultural interest has been concentrated and the consumer interest diffused and widespread. Because you have a relatively small group of people who regard themselves as having much at stake and therefore they are able to be more effective politically than the diffused consumer interest.
....
The basic reason I believe why economists have not been able to persuade the public is the one that I have already alluded to. It is suggested by the title of a famous essay which was written many years ago by a great economist, Wesley Mitchell. The title of his essay was "The Backward Art of Spending Money." And he asked, "Why is it that we are all of us so sophisticated about the activities in which we earn our living and tend to be so unsophisticated and backwards in the ways in which we spend our money?" And his answer was the one I have already mentioned: that each of us tends to be involved generally in only one kind of productive activity. We spend our working life, forty hours a week or sixty hours a week, whatever it may be, as a worker producing a product, as a merchant distributing a good, as a professor, well, forty hours a week teaching is a little long, but we're supposed to be putting in that much time on related ancillary activities and most of us do. On the other hand each of us buys a thousand and one things and it's perfectly understandable therefore that we devote far more attention and far more interest to the way we get our income than to the measures that affect how we spend it.
Unfortunately, this backward art of spending money leads to erroneous views in many directions and not only in the area of the tariff and of protection. For example, public discourse tends to be carried out in terms of jobs as if a great objective was to create jobs. That's not our objective at all. There's no problem about creating jobs. You can create any number of jobs by having people dig holes and fill them up again. Do we want jobs like that? No. Jobs are a price; we have to work to live, whereas if you listen to the terminology you would think that we live to work. Some of us do. There are workaholics, as there are alcoholics, and some of us do live to work. But in the main what we want are not jobs; we want productive jobs. We want jobs which will enable us to produce the goods and services we consume at a minimum expenditure of effort. In a way, the appropriate national objective is to have the fewest possible jobs, that is to say, the least amount of work for the greatest amount of product.
In the international trade area, the language is almost always about how we must export and what's really good is an industry that produces exports. If we buy from abroad and import, that's bad. But surely that's just upside down as well. What we send abroad we can't eat, we can't wear, we can't use for our houses. The goods and services we send abroad are goods and services not available to us. On the other hand, the goods and services we import provide us with TV sets we can watch, with automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. The proper objective for a nation, as Adam Smith put it, is to arrange things so we get as large a volume of imports as possible for as small a volume of exports as possible.
This carries over to the terminology we use. I have already referred to the misleading terminology of protection. But when people talk about a favorable balance of trade, what is that term taken to mean? It's taken to mean that we export more than we import. But from the point of view of our well-being that's an unfavorable balance. That means we are sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don't regard it as a favorable balance when you have to send out more goods to get less coming in. It's favorable when you can get more by sending out less.
Posted on 4/3/25 at 7:55 pm to SlowFlowPro
quote:
The 2 primary ones are the "bring jobs back" and "fair trade" goals. Short term could lead to "fair trade" (other countries eliminating tariffs), but cannot lead to the "bring jobs back" goal
Gonna be honest here, the only time I see people really jump on the bring manufacturing jobs back wagon is when our board moderates try and push the idea that America is better off not having those jobs, which is a different topic.
This post was edited on 4/3/25 at 7:56 pm
Posted on 4/3/25 at 7:58 pm to Seldom Seen
Weird.
He’s saying the same thing I was saying and many others.
If you keep them long term and people completely stop trading. That’s bad.
But I don’t think that’s going to happen.
And for this to happen, every other country would have to willingly destroy themselves too.
I just don’t think that’s the play in 2025 for any of these countries.
He’s saying the same thing I was saying and many others.
If you keep them long term and people completely stop trading. That’s bad.
But I don’t think that’s going to happen.
And for this to happen, every other country would have to willingly destroy themselves too.
I just don’t think that’s the play in 2025 for any of these countries.
This post was edited on 4/3/25 at 8:01 pm
Posted on 4/3/25 at 7:58 pm to Rip Torn
quote:
companies often move their production to other nations to avoid tariffs and reduce costs
If they're just temporary to achieve some other means why bother with that?
Posted on 4/3/25 at 8:01 pm to Seldom Seen
Sowell actually understands economics. Tariffs are bad for an economy, unless they are used for strategic leverage. It's is yet to be seen if these are permanent or not.
Posted on 4/3/25 at 8:02 pm to Azkiger
quote:
Gonna be honest here, the only time I see people really jump on the bring manufacturing jobs back wagon is when our board moderates try and push the idea that America is better off not having those jobs,
Those who promote capitalism note the inefficiency of redistributing wealth/our economy to fund these overpriced jobs. The arguments supporting tariffs for this goal are almost always the instigator of the discussion.
Posted on 4/3/25 at 8:02 pm to roadGator
Let me guess. You didn’t watch it.
This post was edited on 4/3/25 at 8:03 pm
Posted on 4/3/25 at 8:03 pm to SlowFlowPro
quote:
MAGA has adopted multiple positions/goals for tariffs that can't co-exist.
The 2 primary ones are the "bring jobs back" and "fair trade" goals. Short term could lead to "fair trade" (other countries eliminating tariffs), but cannot lead to the "bring jobs back" goal
It becomes more absurd when you consider that they're also claiming it to be a revenue tool
All 3 of those things definitely can't coexist
Posted on 4/3/25 at 8:04 pm to The Scofflaw
quote:
B-but Trump knows more than Thomas Sowell!
Thomas sowell isn’t a fricking mind reader.
Which is why he said, short term okay. Long term bad.
That’s it in a nutshell.
This post was edited on 4/3/25 at 8:06 pm
Posted on 4/3/25 at 8:05 pm to YouKnowImRight
quote:
It's is yet to be seen if these are permanent or not.
We;ve had some for 8 years.
Posted on 4/3/25 at 8:06 pm to dgnx6
quote:
Thomas sowell isn’t a fricking mind reader.
Which is why he said, short term okay. Long term bad.
That’s it in a nutshell.
You understand that some of the stated goals of the tariffs can't be achieved if it's a temporary measure right?
Posted on 4/3/25 at 8:14 pm to SlowFlowPro
He says it both ways because, just like this board, people see and hear what they want to. Whatever backs their point of view.
I still believe its a negotiating tactic. Everybody pounces on Trump for backing off of the tariffs, but what was the value before he enforces a tariff did and what is the value after for each country? All the "how did you get theres" dont really matter, as long as you get there at the end of the day.
I still believe its a negotiating tactic. Everybody pounces on Trump for backing off of the tariffs, but what was the value before he enforces a tariff did and what is the value after for each country? All the "how did you get theres" dont really matter, as long as you get there at the end of the day.
Posted on 4/3/25 at 8:16 pm to Seldom Seen
Sole institution of tariffs can be troublesome. That isn’t the intent here. The intent is leverage to get countries to quit bending over the USA.
Posted on 4/3/25 at 8:18 pm to PaperTiger
quote:
All the "how did you get theres" dont really matter, as long as you get there at the end of the day.
That entirely depends on the costs of how we got there.
Posted on 4/3/25 at 8:19 pm to CDawson
quote:
The intent is leverage to get countries to quit bending over the USA.
How are poor countries going to do this, exactly, when the "tariffs" Trump proposed are not reciprocal for tariffs levied on the US and are based in trade imbalance with the US?
Posted on 4/3/25 at 8:25 pm to SlowFlowPro
quote:
So they have nothing to do with "bringing jobs back"
Country X drops 25% tariff on American goods. American good is now competitive in country X marketplace. Company grows expanding business and increases jobs.
This isn’t hard to understand unless your purposefully being ignorant.
This post was edited on 4/3/25 at 8:29 pm
Posted on 4/3/25 at 9:04 pm to PaperTiger
quote:Luckily, only you and a few others on this board are the only ones smart enough to figure that out. Thank gawd other foreign leaders and economists will never know what hit them!
I still believe its a negotiating tactic.
Posted on 4/3/25 at 9:17 pm to Landmass
quote:
Sowell > Trump
On economics of course.
Posted on 4/3/25 at 9:19 pm to BugAC
quote:
Country X drops 25% tariff on American goods. American good is now competitive in country X marketplace. Company grows expanding business and increases jobs.
If the jobs producing the "now competitive" American good are overseas, the new jobs would be overseas, too. There's no rational reason why companies won't double down, as the tariffs don't affect labor costs.
If the jobs producing the "now competitive" American goods are domestic, then the tariffs have no effect on domestic jobs as they existed prior to the "now competitive" pricing.
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