Donald Trump

The Folly of 'Buy American and Hire American'

Trump remains completely clueless on trade.

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Donald Trump
Ron Sachs/CNP / Polaris/Newscom

Now that the campaign is over, Donald Trump is no longer willing to fake it. Last year, he insisted, "I love free trade. But I want to make great deals." In his inaugural address, he dropped the masquerade.

"We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs," he said. "Protection will lead to great prosperity and strength." His formula is simple: "Buy American and hire American." In his vision of the future, we may export but we will never import.

Trump is never more certain than when he is completely clueless. The truth is that protection against foreign trade leads away from prosperity and strength. A country that deprives itself of foreign goods is doing to itself what an enemy might try to do in wartime—cut it off from outside commerce. It is volunteering to impoverish itself.

Countries don't "ravage" us when they make "our" products; they help us. At the risk of belaboring the obvious, the essence of trade—foreign or domestic—is that it makes both buyer and seller better off. Otherwise, they wouldn't bother.

But preventing such mutually agreeable transactions is Trump's dream. Already he has announced he will renegotiate NAFTA and walked away from the Trans-Pacific Partnership, a 12-nation deal that Barack Obama signed but Congress had yet to approve.

Trump may promise "great deals," but he is likely to get—and would probably be content with—no deals. What foreign government will rush to sign an agreement stipulating that our companies will only "buy American and hire American"?

His belief that international commerce is bad for Americans and protection is good for us is not a theory but an ancient superstition. One of the most irrefutable insights of economics is that if a country can buy something abroad for less than the cost of making it at home, it's better off buying it. That transaction allows citizens to consume more for each dollar spent. It makes them richer.

The United States could grow all its fresh fruits and vegetables rather than buy some from Mexico—just as Mexico could grow all the corn and soybeans it needs rather than purchase from us. But the costs would be higher on either side. Open trade allows people in each country to eat more and better.

It also allows each economy to produce more. Trump fantasizes that American companies and workers would be better off without foreign competition. But the steel that goes into American cars and the lumber that goes into American houses would be more expensive if it all had to be produced within our borders. In industries deprived of imported supplies, prices would rise, sales would decline and employment would shrink.

The U.S. auto industry has plants in Mexico that make cars sold in the U.S., to the horror of the new president. But if he guts NAFTA, those jobs won't all move here.

A study by the Center for Automotive Research in Ann Arbor, Michigan, said that American firms that ship car parts to Mexico could lose out to suppliers in other countries. Overall, scrapping the accord and setting high tariffs would destroy 31,000 jobs in the U.S. automotive sector.

Trump defends his protectionism by asserting that "every decision on trade" should "be made to benefit American workers and American families." But free trade does exactly that. It's the classic example of a policy that benefits the many while harming the few.

Only about 14,000 Americans are employed making footwear. About 324 million Americans, on the other hand, wear shoes. Putting up barriers to foreign-made shoes would injure far more American workers and families than it would help.

It would also be a drain on the economy. When Obama slapped heavy tariffs on Chinese tires, the Peterson Institute for International Economics found, he saved no more than 1,200 jobs—at an annual cost to consumers of $900,000 per job.

Spending nearly a million dollars to save a job that typically pays $41,000 a year is not a recipe for prosperity. It's the equivalent of selling $20 bills for a dollar apiece. Trump's dream of "buy American and hire American" would work exactly the same way.

Trump, of course, is a business magnate whose companies have sold products made everywhere from China to Honduras. In this case, wisdom lies in following his example, not his advice.

© Copyright 2017 by Creators Syndicate Inc.

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  1. Jesus Christ this stuff is killing me having to listen to it over and over. I hate how all these articles LITERALLY make it sound like a BAD thing that ANYTHING be made in the USA. It’s so disgusting. The phrasing always has tones of intentional anti-Americanism in it. Should Red Wing Shoes shut down their US factory that makes some of the finest boots in the world just because they can shave a few bucks off of costs? How about Gibson stops making any guitars in the country that invented the modern electric guitar and rock and roll? Why not? It’s cheaper! Seriously. It’s like there can be no reason to make anything anywhere other than the most rock bottom cheap place. That shit doesn’t sit right with me, and I don’t ultimately think it is in the LONG TERM BEST INTERESTS of the country either.

    I “get” free trade. I understand the theory. It’s pretty obvious how it’s supposed to work. That said in the real world I think there are some obvious prerequisites for the theory playing out as it’s supposed to.

    1. Comparative advantage has to exist. It does fully in some industries, and to a certain degree in all others, depending on what you mean by being more efficient at producing something. China excels us at virtually nothing by any metric other than “yuan converted to dollars” but let’s say that counts.

    2. It assumes a free market. We don’t have anything resembling that. Foreign nations erect protectionist tariffs, while we do not. This is to our disadvantage.

    1. 3. It also assumes I guess 100% employment by everybody? Because (Bout to get all Judge Napolitano)…

      WHAT IF your country doesn’t have an advantage at anything? Or what if your country has an advantage in only a few industries far smaller than the industries at which you do have an advantage? What if your advantages are so small you run a massive deficit every single year because you produce such a small amount of your own consumption annually? What if you have millions of unemployed people because they cannot find a job because of foreign competition with slave labor? What if you then have to support all of these people via a massive welfare state? What if your country is literally burning through its accumulated life savings of decades to pay for these foreign goods? What if you had a real hard currency instead of a fiat currency such a trade deficit could not continue?

      What if it benefits certain powerful industries but is bad for the bulk of the population? What if said powerful industries bought off the politicians to intentionally sign trade agreements that were to your countries disadvantage? What if the politicians complied? What if I couldn’t go on writing like Nap anymore?

      1. If your country has no advantage at anything, nobody would trade with you.

        1. Every economic shift harms some people. The problem is that the harms are focused and obvious while the benefits are diffuse and harder to track.

          Simple example though … If we made all out smartphones here, they might cost, say $500 each. If we buy them from manufacturers in China they cost, say $300 each.

          So for our $500 we can have a phone made in the US or the same phone made in China plus a new bicycle. Which makes us better off?

          1. True. Every shift does harm people. And that’s ok for the most part… But you clearly didn’t read a lot of my “points” for why this can become bad at a certain point or how it can get too extreme.

            The thing is you’re getting caught up in theory and not reality. As I said below (or above or wherever it is) I wouldn’t give 2 shits about a small deficit. Neither would most other people. That’s why people didn’t freak out when it was smaller decades ago. We were benefiting to varying degrees and the cost was small. This was largely because we were more competitive in more areas. However it has now got to the point of being a serious problem.

            I’m not saying we shouldn’t outsource anything. I’m just saying we need to produce more as a nation right now, because we’re literally going in the hole over this with how bad it is right now. Running any budget or account in the red for too long is a recipe for disaster.

            What if the cost of that phone and bicycle is 15% unemployment? We’re pretty much at 10%+ now when you look at real figures that include people who gave up looking who would prefer to work. That’s with a “healthy” economy according to some politicians. When the next recession hits we’ll easily break through 15%+ REAL unemployment.

            What if the cost is also hundreds of billions a year in welfare? Because those are real costs we’re bearing right now. Millions of people that used to have jobs, so they’re probably not lifelong welfare cases, are on government assistance.

          2. What if the cost is losing out on making the next generation breakthroughs in manufacturing techniques? Because it is. If you’re not doing something you don’t gain expertise at it.

            I could go on.

            Bottom line is we simply are not producing enough that the world wants to cover our own consumption. We are living on credit cards so to speak. We are losing net worth to the tune of 500 billion dollars a year because of it. That is more than the entire economy grows in GDP in a year. If that were merely cut in half we’d have damn near double the growth rate we have. Wonder why GDP is rising so slowly? There’s one big fat reason.

            The only things keeping it afloat are 1. Fiat currency. And 2. They’re buying our ASSETS, not goods or services, which means they own progressively more of our country and the returns on investment that come from this. If we either had real currency, or some form of “you can’t own assets here” like China itself does, then they would cut us off tomorrow. Not suggesting we should mind you, just saying they’re not viewing this as trading cell phones for funny money… They’re in it for our real estate, buying our fortune 500 companies stocks etc. These asset transfers are not friggin’ joke. It’s not “funny” or cutesy to lose ownership of your own country and its most prized assets.

            Stretch this out decades and you have a serious fucking problem. How does this not compute?

          3. You only benefit as a nation if your people can move on to more productive employment when you outsource low wage stuff/stuff you’re not the best at. If they simply go on the dole you’re simply shifting the burden around and playing a numbers game. “But we saved $100 billion a year by importing $500 billion worth of goods!!!” And then spent another $150 billion on welfare. Great deal there. Read through what I said and really think it through. I used to be 110% in favor of free trade. Then I started looking at numbers and thinking it through beyond the 4 or 5 points typically used in the basic theory and realized it, as with many issues, is a lot more nuanced in the real world.

            Keep in mind this IS looking at it through the US vs Them lens. It is probably better for the globe to do things like we have been. But it’s not necessarily good for the countries getting the shitty end of the stick. Personally I’d rather have a black dude in Detroit off of welfare and working again than help make China a global superpower. China is surely looking at it through an Us vs Them lens too, so I don’t see why we should be so naive as to ignore that fact.

          4. Depends. Do you also have to pay a hidden $400 tax to provide for the members of the unskilled labor market in your country because most things they could conceivably do can be done better by other nations with lower standards of living and regulations, or illegal immigrants working off books (and also likely off-regulations) domestically? Because that sort of changes the calculation.

        2. Wrong. People would if your country had assets that were still objectively worth something. Like, I dunno real estate. Or stocks in global companies. A country could theoretically produce absolutely nothing by simply selling off all assets over a period of time to pay the bills. Thing with that is sooner or later you run out of assets.

          This is essentially what we’re doing. The world doesn’t want our trade goods, but they’re fine with selling us cheap shoes in exchange for owning Manhattan real estate.

          1. you fail to understand the current layout of economy and that US is nearly all services.

            http://tinyurl.com/j4gagrr

            Services is nearly 80% of the economy…we don’t need manufacturing….shit.

            1. http://tinyurl.com/hsaphnv

              due to massive improvements in efficiency we no longer need 90% of everyone farming or everyone in a damn factory. The US is nearly all services. very little economic value is in manufacturing.

              1. ” very little economic value is in manufacturing.”

                This could be the dumbest thing ever written, on top of being wrong.

                1. 20% of the work force is in manufacturing and it is still shrinking. It is a fact. There are fewer and fewer jobs in that sector year after year.

                  Dunb…nope fact.

                  1. er industrial….manufacturing is even a smaller percentage.

                2. http://tinyurl.com/oar9u8t
                  here

                  Manufacturing is only 12% of our GDP and much of that won’t ever leave because its more economical to do locally due to shipping costs.

                  1. also GDP is going up as manufacrtuing is shrink showing it is a tiny part of our economy and not a driving force in any meaningful way.

                    So yes…you need to actually read this before talking because you don’t understand this at all vek and obviously

                    1. Ugh. So that fact that our manufacturing sector is in the shitter RIGHT THIS SECOND means it is of no value now or in the future? The fact that it’s a smaller portion of our GDP means that’s inevitable? Just because it IS means it MUST BE? I fail to follow that logic.

                      Too bad you obviously don’t know the GLOBAL statistics. Globally, even with all of the increases in automation, there are MORE people working in factories than ever before, and MORE value being produced than ever before. This is predicted to continue for some years even with various automation trends factored in. Someday it will reverse and be an actual global decline, but that day isn’t for some years.

                      I guess Germany must have missed the memo too since about 24% of their GDP is from manufacturing. Poor suckers don’t realize manufacturing doesn’t matter anymore and can’t support an economy! Somebody better give them a call and tell them to close half those factories ASAP so they can only be at 12% of GDP like a “modern” economy should be.

                      The fact that WE don’t manufacture much doesn’t mean nobody is, or that nobody is working in those industries. If we didn’t have massive unemployment and people had transitioned to better higher paying jobs , as is supposed to happen in theory when ones ceases to do “low level” labor, I would be completely in favor… However that didn’t happen. Instead we’re simply running a huge trade deficit whilst supporting all of the people that used to make shit on welfare.

                    2. I am A Okay with subbing out some stuff, especially where we’re least competitive. But it’s got to an unsustainable level.

                      Fortunately natural trends are driving it back here (higher Asian wages, stagnant wages here, + better automation here), but we’re in for a rude awakening over the next couple decades if we continue to run a deficit this large. Just sayin’.

                      You can put absolutist visions of a THEORY of economics over hard math all you want, but it ain’t gonna change the outcome. We will either balance out trade naturally by improving our productivity enough (it is possible with Asian wages rising like they have), possibly forcing foreign nations to accept better trade deals that don’t artificially hobble our competitiveness, or it will be by collapse of our economy someday when the foreigners realize the days of it being wise taking our fiat currency for real material items are in the past. One way or another it will balance out in the end.

                      All I’m suggesting is a controlled burn if nothing else via forcing China and others to not disadvantage us in their markets in exchange for us not disadvantaging them in ours. Fair is fair and if they don’t like it they can find another largest market in the world to sell to… Oh wait, no they can’t. Which is why they would accept the deal.

      2. So… you don’t understand comparative advantage.

    2. I mean seriously. This is not even a debate about REAL free trade. That does not exist in this world. The facts are:

      1. We have deals with countries where we have virtually no tariffs on their shit, but they have huge ones on ours. This is dumb. So what’s wrong with making “fair” deals. I would propose “You want 0% tariffs on your goods coming in? Ok, we want 0% too going into your country. You want 30% tariffs on our goods going in to your country? That’s what we’re going to slap on your goods too. We’ll match you, so it’s your call China!” Fair is fair. I bet literally this action alone would dramatically alter the trade deficit because it is so prevalent in other countries. The USA and Europe have been suckers on this stuff because of big business. I own a business. I’m a capitalist pig, but this kind of stuff is simply stupid and ultimately unfair to workers and smaller businesses in the civilized world. It’s not “free trade,” it’s “intentionally manipulated against us” trade.

      1. So if one country shoots itself in the foot with tariffs, we should shoot ourselves in the foot also? Every dollar that goes offshore in trade comes back onshore eventually. You think not? Then the Chinese or whoever are hatefully dumping our valuable dollars in the sea?

        1. So you raise tariffs on their goods, until they lower them on yours.

          It’s called leverage, you cosmotarian halfwit. Without it, how exactly are we supposed to convince the Chinese to abandon their bad trading behavior?

          Or are you advocating the kumbaya approach to trade? Where China will somehow decide out of the goodness of their heart that the state doesn’t want the extra $$$ and does away with tariffs on US goods.

          1. What the government of China does to hurt the Chinese people is beyond our control. Why should we add to the harm by harming ourselves as well? 100% free trade from our side means we always win, regardless of what other countries do to their own people.

            Little digits meaning dollars are worthless, in and of themselves. They are only good for what you can get in exchange for them.

            When those “extra” dollars come back as investments they’re not counted as part of the formal balance of trade, not part of the trade “deficit.” Foreign investments in the US give us even more jobs and goods. But that particular little fact gets left out of all the “Oh my God” numbers. It’s not easy and intuitive to see and understand so it just gets ignored.

            1. Diane,

              You’re missing a major point. All kinds of “investment” are not necessarily equally good. A Chinese company opening a factory here would be fairly good. Ultimately profits still flow back home to China, but wages and materials costs are usually a higher amount than the net profit at the end of the day anyway. A Chinese company buying a skyscraper in NYC doesn’t do quite the same amount of “good” for the economy though. A Chinese company buying stock in Apple likewise doesn’t benefit the broader economy as much either. A lot less of the 1st type of investment is going on than the 2nd and 3rd.

              The reality is we’re trading our assets/net worth for current consumption. This is not a wise long term decision. This is country living beyond its means. That is a bad thing, just like it is when a person does it. Get it through your head.

              There are upsides and downsides to trade with low wage countries, all I’m saying is the downsides now seem to be more than the upsides at the scale things have gotten to now. Really think through if you think it is a good idea for foreign nationals to own an ever growing portion of assets in America. Think about it.

              1. vek, what you are saying here is completely anathema to libertarianism. Freer markets. End of story. Will they ever be absolutely free? No. But to the extent that they impose additional regulations in an attempt to engineer trading relationships, they are the enemy. In all of these (rather long-winded) posts of yours, you’re essentially repeating the fallacies of mercantilism, a thoroughly discredited seventeenth century economic ideology. Basically, you have resorted to making moral arguments instead of economic ones. You are saying that there is some kind of higher “good” that is lost when trade is free. But what is this higher good, how is it measured, and who gets to define it? Perhaps without realizing it, you have erected for yourself a utopian moral vision that you are trying to impose on the rest of us. Fuck your morality. What you consider to be good is not the same as what I consider to be good. And this is precisely why Adam Smith is so compelling — we all pursue our own economic interests, however narrow they might be, and a close proximity to the highest moral order naturally emerges.

                1. He also ignores (as does Chapman, but I expect Chapman to be a tard) the key datum: per-capita industrial output in the US is at an all-time high.

                2. Maybe it’s not the way YOU think we should try to bring about a more free world, but I’m not advocating for pure protectionism. I’m saying use our leverage to force them to be more so instead of it being one sided. Let us say I had 2 magic buttons.

                  1. Makes the entire world switch to totally free markets, including on trade.

                  2. What I might consider by my own reckoning to be a somewhat “fair-ish” and “well managed” system of trade along the lines of how shit works now.

                  I would choose number 1. No question about it.

                  For what it’s worth I think we’d probably have a smaller deficit, but probably still would have one, with completely free trade with the world. Why? Because most of the world disadvantages us by having protectionist tariffs themselves on us, which we do not have on them. But we still can’t compete on the low end, hence we’d probably still be a net importer. Maybe not but it’s irrelevant.

                  Either way it would be a level playing field letting the true best producers come out on top. If we extend the totally free markets in that scenario to wages and having a better currency system we would also have to adjust and lower wages most likely if we were to run a big enough deficit for too long, which means (as per usual) the free market takes care of its own problems when not interfered with. This would result in lower living standards in the US if we were not competitive, but at least it would be truly allowing the market to sort things out in the best way possible.

                3. I guess where we’re really parting ways is how to deal with the rigged system. Economics IS warfare, both historically and in the modern world. China is practicing economic warfare right now. Given that in the current system we

                  1. HAVE to have stupid trade deals signed and dumb rules governing everything no matter what we would prefer as a nation.

                  2. Are in fact the nation with more leverage than anybody else on the planet.

                  I would say it’s foolish to not demand fairer treatment and better deals than we have negotiated. We could get it! If when we were negotiating with China to open up trade relations we had said “Look, we’re only signing this agreement if you give us 100% across the board tariff free entry into your market. We will reciprocate by offering you the same to ours. If not that then how about 10% across the board if you INSIST on having something. No industry by industry horse trading, just matched across the board rate of your choosing. That’s what we’ll give you, otherwise you get nothing.”

                  To me THAT is working towards more freedom because they would have been basically forced to accept it because of our position in the world. Allowing trading partners to slap huge tariffs on us, while we do not on them has simply led to too many real world issues in this rigged system. Since WE have the leverage I see NO reason why we did not at least force them to do the above.

                4. To use a dumb analogy: Say you had 2 football teams playing. You were far and away the best team in the world by any objective standards, but the other team was pretty good too. You are also a fine and upstanding team that plays by the rules, but the other team was cheating. There was no referee for the game to save you. At the end of the game the losing team gets half of their team shot for losing. Should you:

                  1. Continue to play by the rules and hope you can still overcome their bad actions anyway.

                  2. Just outright start cheating yourself immediately.

                  3. Tell them you’d prefer to play by the rules, but if they don’t you’ll begin to cheat too, and since you’re the better team they should be aware that once you’re cheating too you’re going to fucking demolish them. So maybe it’s best they play by the rules.

                  We have been going option 1 there as a nation. If you have any morals option 2 is not the best. That’s why I would suggest option 3. You give them a chance to play nice, but if they don’t take it bring the hammer down on their asses BECAUSE YOU CAN, and you’ll win.

                  We’ve had the leverage to achieve REAL trade liberalization and have instead squandered it by not using our leverage. If the US, Europe, and Japan got together and demanded actual decent trade agreements the world would hop to overnight, because WE have the power.

                  1. You’re absolutely right. That is a dumb analogy. Football is a zero-sum game: the only way Team A can win is for Team B to lose. Trade is not a zero-sum game, since voluntary exchanges occur only when both parties believe they will be better off as a result. Plus, “cheaters” at trade are effectively punishing themselves, not giving themselves an advantage. So there’s no need for your referee.

                    1. Good call. It is a poor analogy. However that doesn’t change the fact that it’s still a BAD tactic to NOT enforce our leverage to induce REAL trade liberalization since we’re still in the power position for the time being. Just because we didn’t force their hand in the past doesn’t mean it isn’t worth doing it now? Would zero tariffs for US goods into China not be a good thing for the US economy? Would it not by classic free trade theory ALSO be beneficial for the Chinese?

                      I’ve never said that trade was a zero sum game. We DO gain advantages. We also have disadvantages. How is it so hard to conceive that when one weighs them the scale tilts one way or another?

                      I’m not saying individuals don’t feel like they’re getting the better end of the deal in every trade. I would say individuals surely do feel good, that’s why the transactions occur.

                      That said a crackhead feels like he got the better end of the deal when he buys crack from his dealer too. The dealer is happy with the transaction as well. That doesn’t mean most people looking at it objectively wouldn’t think the crackhead is being a dumbass for constantly buying crack and making his dealer rich while impoverishing himself. I think crack should be legal. I also would advise every person I ever meet in my life to not smoke it.

                    2. Freedom is the freedom to make bad choices. This is a major part of libertarian philosophy. I think we should be secure enough in our morals to admit the situations where extra personal freedom DOES have potential negative consequences either for individuals OR the collective “us” whether than be a nation state or some other group/unit of people.

                      Framing this argument is perhaps important. There is not a “national interest” in a heavy philosophical sense, so let us perhaps switch this to “higher national GDP.” Is it possible that trade can reduce the GDP of one nation compared to another when one has low barriers to entry into their market while the other protects their market?

                      I believe the math says yes when you look at numerous accepted and quantifiable economic factors.

                      The fact that one dollar recirculates 5-14 times locally (I can’t find the figure for the national re-circulation rate only local, but it must be equal to or higher than the ones I found for merely the actual locality) vs going overseas to return merely as buying a US asset (since they don’t want our goods) is a major factor. In other words 1 dollar in manufacturing income is 5-14 after it is spent and re-spent vs a one time savings for importing a product. This alone would probably tilt the GDP scales at the fringes where we are almost at cost parity with manufacturers.

                    3. Classic free trade arguments also completely ignore the possibility that unemployment exists, because when they were conceived it basically didn’t. If you couldn’t find better work and weren’t a lay about, you could always go and work the land. Nowadays that isn’t a viable fall back, nor would it be desired it it was. People simply have no employment, and this is detriment to the broader economy.

                      Factor in the welfare spending (since we DO have a welfare state this cannot just be ignored) for supporting unemployed people and this is a hidden shadow cost in the current paradigm that drags down the healthier sectors of the economy vs increased taxes levied on them to support it.

                      There are other factors, but those are the biggest.

                      I believe math and common sense says it is POSSIBLE that trade can in fact reduce GDP. So then the question becomes is this good? Is it bad? Is it bad but hey that’s the breaks because freedom trumps all?

                      The most fair statement I think if one is libertarian would be to say “Yes. It may reduce national GDP in some instances, however it also brings many advantages, and personal freedom of association and who you want to deal with is more important in the end anyway.” That would at least be a correct statement in my mind. Saying it 100% of the time increases GDP for ALL players in ALL situations no matter what non free market manipulations may be happening by some players is simply not correct.

                    4. I would not debate that importing a product at 20% of the cost of locally produced is a net benefit across the board. The positive factors generated by producing locally would likely not make up for such a cost difference. However when an import is 80-90% of the cost of local production (which many products are in this range) I believe an argument could be made mathematically that the nations GDP is improved by producing it here.

                      Any individual is making a rational self interested decision by buying the 10-20% cheaper imported product, but the nations GDP as a whole is now lower and the positive feedback loop does not take place which would indirectly benefit said player. So it is a direct benefit, but indirect cost.

                      I’m no collectivist by any normal persons standards, but most people aren’t 1/10 as principled as I am let alone any of you even more extreme purist libertarians. So when people see the math and how it plays out it makes them want to have the government step in and “fix it.”

                    5. If I were dictator I would probably decree that China and any other country that wants to trade freely with us will now have to match our tariffs… AKA they need to lower theirs since ours are already low, and if not we will raise ours on them. This is not with the intention of raising our tariffs, this is with the intention of forcing them to lower theirs! I think a lot of people are missing that point with what Trump has been saying. I think he wants lower tariffs from them a lot more than he wants to raise ours.

                      I do not believe this would create a trade war because we’re the ones in the position of power. We are the biggest market to sell into, but there are many low wage nations for us to import from. This is leverage pure and simple. I believe the outcome would be a rather rapid dropping of their tariffs on our products in short order. Anyone who didn’t would lose most of their imports to our country as we replaced the cheap shirts from China with cheap shirts from India who DID sign on to zero tariff trade with us.

                    6. Using a threat to get REAL free trade is not being anti free trade. For those that want to continue protectionism they can do so, but it will likely be to their detriment and not ours.

                      How anyone can oppose a negotiating tactic that is used in pursuit of free-er trade is beyond me. Not saying I can read Trumps mind, but IF this is what he is really after, which I think it is, then he couldn’t SAY this out loud. They have to believe he is willing to pull the trigger. And indeed if some countries don’t sign on he may have to to prove the point to get others to bow down. It’s a tactic that will work I think.

                5. It would also likely boost their economies, and ultimately the poorer nations economies too because it would allow more real market efficiencies to flourish.

                  I don’t think Cheeto Dick even ever intends to really go high tariffs for real. I think he is just showing them that “I know we’re in the power position here, sooo we’re going to fix these past mistakes.”

                  To me the situation is a lot like arms reduction. I think what we did with Russia when we reduced nuclear arms was great. It would be even better if we had applied it to traditional arms as well. Less military spending is a great thing for the world. However would you advocate that we completely abolish our military in the current world to “set an example” and then just hope everybody else followed through too? I sure as shit wouldn’t.

                  Or how about we’ll cut our army by 50% if you cut yours by 10%? Does that sound like a good strategic idea?

                6. Once again that’s our economic policy. We’ve scrapped the military in full (or at least by 50%), which has put us at a strategic disadvantage. We’d be better off to be forcing staged “reductions” in tariffs that were across the board. TPP basically gave the other countries free reign on when/where/how they could reduce a lot of the barriers to entry for us because there were no hard time limits etc on much of it. Yet many of our actions came pretty much right off. So that’s us cutting 50% while they cut 10%. It’s just not prudent in my mind, at least not when we should be able to force them to do better since access to OUR market is so valuable.

                  You can disagree if you like, but when other countries are looking at economics through a political-military lens in addition to simply commerce I think it is naive to go TOO high on strictly moral grounds when real world material results show a lot of potential downsides.

                  1. So much wrong here, where to start? The TPP would not have led to massive cuts in US tariffs, because we already have low barriers. Many of the other countries have much higher barriers to our goods, so cutting them would have made our imports far more competitive. So we weren’t giving up a lot to get a little, we were definitely winning on this one. Instead, Trump walked away. Way to screw American workers, Donny.

                    And “scrapped” the military? Hardly. We still have far and away the most powerful military on the face of the earth. Most importantly, we can project power like no one else. We can stage massive interventions halfway around the world (Not saying we should, just that we can.), while most other countries can maybe threaten their immediate neighbors. Even our NATO allies can’t do much very far from home without significant logistic support from Uncle Sugar.

                    1. There were good parts in TPP, and bad. The problem is their tariff cuts (as I have read anyway) WERE NOT REQUIRED TO ACTUALLY HAPPEN. They were fuzzy wuzzy “Hey guys please try to cut the tariffs on our stuff when you get a chance. No pressure, take your time, but just sometime get around to it, okay?”

                      Just like our emissions targets from the Paris treaty they were totally voluntary. Which is to say they don’t exist. If they were immediate and mandated that would have been better, but what I read said they were not. I didn’t read the whole thing from end to end by any means but there were a lot of other BS bits too. Maybe it would have been a minor improvement, maybe not. We’ll never know now.

                      As for the military I didn’t say we DID scrap our military. I said us having super low tariffs on other countries when they haven’t reciprocated is LIKE if we scrapped our military to set a “good example” and nobody else did. Re-read if you must.

          2. Pussy-Grabber: YUP. If everybody agrees to have a knife fight that’s cool. If one guy shows up with a gun, you’re KIND OF AN IDIOT if you don’t whip out your gun too. They’re intentionally manipulating things against our interests and to their benefit. Frankly I can’t fault them for doing this. It IS in their country’s best interests after all. However that we do not respond in kind is very foolish.

            The thing a lot of people don’t get about this particular situation is that WE have the upper hand. We’re the ones with the capacity to import a lot of goods, even if we did reduce the amount by a large margin. As far as dealing with China in particular WE ARE THE SINGULAR MARKET in the world… Their problem is there are a lot of other low cost countries to manufacture in. So if they want to go to war with us on tariffs, we’ll just start making more here, and stuff that still isn’t worth it we will begin importing stuff from India, South Korea, you name it. They’re in the weak position, not us.

            So why be a bitch when you’re the one with the power to call the shots? The only reason is because we’ve had globalists and outright Anti-American people running our country.

            1. Explain to me how a negative balance of trade harms “our” interests.

              1. prime example of how stupid he is being is China trying to manipulate rare minerals.

                It completely back fired. We used substitutes and found new sources and work arounds and who was hurt the most? China.

                there was an article about this i forget where…maybe it was reason?

              2. Seriously. “They’re giving us more stuff, and taking less of our stuff? Those bastards!”

                Economic illiterates such as vek just can’t get it through their heads that tariffs and other trade barriers do the most harm to the citizens of the countries imposing the barriers. He claims to favor the interests of Americans over the interests of foreigners, yet when the Chinese government screws its own citizens to our advantage, he wants to make them stop.

                1. As I said above, I believe it is possible for individuals to make rational economic choices that on the aggregate reduce national GDP. You can argue whether this is good or bad for individuals or for the “national interest” or whatever on philosophical grounds, but in terms of dollars and cents I believe in the highly regulated and manipulated global economy we now have it is possible.

                  I don’t think that libertarians have to make the argument that more freedom comes with zero costs in all instances. Legalizing weed may have virtually zero downsides, but what if statistics showed legal crack had pros and cons? Fewer people in jail since it’s legal, lower theft to finance the habit since it would be cheap if legal, but perhaps an increase in overdose deaths? I would say such a scenario is possible, but I would also argue it should be legal even if more people died, because freedom! One can argue for free trade even if there are downsides, and all I’m saying is people should perhaps accept that in the crony capitalist world we exist in there may well be downsides in some (but not all!) instances.

                  In a true free market I believe it would balance itself out and find equilibrium (as economics always does when left alone), but the various manipulations mask/conceal the true costs and true benefits.

        2. 2whlrider, yes the money “comes back” but HOW it comes back is very important.

          If it comes back in them buying a Boeing 747 that is pretty good. However if it comes back in the form of them buying skyscrapers previously owned by US based businesses/individuals, or buying Boeing the company itself that is bad IN THE LONG TERM. There’s nothing wrong with Chinese people buying a building here or there, or owning a US founded company here or there. But when selling off your assets is your primary way of paying your bills, you have a problem.

          We’re like a guy worth exactly 1 million dollars, but who is running in the hole every month. Maybe to the tune of 50K a year. You start out with a 500K paid off house and 500K assets in other stuff. A few paid off cars, and maybe a collection of art, whatever. You spend 50K a year more than you bring in for 10 years by selling off a car here, a painting there. Drats, you sold off everything you own but the house. Now you start taking our home equity loans. This gives you another 10 years!

          Problem is at the end of THAT 10 years you now have a net worth of ZERO, other than whatever the value of the newly acquired trinkets has been. It’s fine for a person to spend more than he makes in a month once in awhile, but if you do it every month year after year you get into hot water. A country is NO DIFFERENT. This is literally how (one way anyway) a country can become poorer than it previously was.

      2. I mean seriously. This is not even a debate about REAL free trade. That does not exist in this world.

        This. Nevermind that free-trade agreements tend to result in large bureaucracies that heavily regulate all of this supposedly free trade.

        1. So because free trade agreements are not perfect examples of free trade, we should just scrap them and double down on protectionism?

          1. I think we should scrap them and just allow people to trade freely. But I sympathize with those who want protectionism.

            1. I’d be more willing to take the protectionists seriously if they were willing to critique our free trade agreements on an individual basis instead of this indiscriminate denunciation of them all. For example, I think NAFTA has been a net benefit for the U.S. However, TPP had some arguably bad provisions, such as unjustifiably expanding certain IP protections.

    3. 2. We cannot compete with near slave labor in almost any industry. Period. Even our “fancy jobs” that we still have can and ARE being outsourced. There’s not REALLY a reason for Boeing to make shit here. They could easily train Chinese workers to do it for less, and China has plenty of technically proficient workers nowadays. Programmers are already being off shored in droves. So where does it end? Jobs are going to be getting scare thanks to AI and automation anyway, but this simply points to the “we can’t produce enough to sustain ourselves” in the market they way it is situated now. I read a paper a couple years ago now that discussed how the “service economy” (including technology) is simply insufficient to replace all of the jobs and wages we’ve lost by ignoring manufacturing etc. In short politicians say: “It’s ok we lost 10 million manufacturing jobs! We’re going to service economy!!!” Statistician says: “Ummm, ok. So 10 million jobs gone. That’s cool. But sir the industry that’s supposed to replace those jobs is only estimated to create 2 million jobs over the next decade though, so what do we do about those other 8 million people?” Politician: “Uhhhh, it’ll be fine! Don’t worry about it. HEY LOOK OVER THERE!”

      1. We can and do compete. Otherwise nobody would want to trade with us. You still ignore the simple fact that every dollar that goes offshore in trade comes back to the US in trade.

        1. Yes we do compete in some areas. IT, aerospace, biotech and so on. The problem is the areas where we do are not enough to offset the areas where we are failing. Hence massive trade deficit. Please see other response to this point. Every dollar coming back is not necessarily good if it is us selling off our accumulated assets to pay for excessive current consumption.

          You can’t sell off assets forever as eventually you run out of things to sell. Ask MC Hammer how that budgeting plan worked out for him in the early 90s. Alternatively ask Warren Buffett what happens when you SAVE AND INVEST more than you earn over a period of time. Buffett is a good example of how to manage money, MC Hammer is a good example of how NOT to handle money. China is behaving like Buffett by consuming less than they produce and investing the overage for the future, we’re behaving like MC Hammer spending more than we produce. Eventually the piper must be paid. GET IT???

      2. I’m pretty sure that the “slave labor” problem is so small as to be non-existent. And no China et al isnt paying slave labor any more than South Korea was when they were making all our clothes in sweat shops… What happens is the “slave wages” free people from subsistence farming and then they get to work fixing their country and moving on from third world status.

        You are literally complaining about the fact that some poor dirt farmer who works all day every say in the hope he can grow enough dirt to have his family not starve in the winter is now working in a factory and you aren’t. You are literally fighting the destitute for shitty jobs that will greatly improve thier living standards.

        I know it’s difficult to face change but the fact is your factory jobs are going away and they arent coming back…ever. Theyre gone and lamenting about it and demanding that the president, literally wrest food from mouths of poor children, is the worst form of welfare.

        You and the rest of america who are training only for obsolete jobs or professional protesting are going to have to learn to adapt or you’re going to starve (probabaly dragging some of us who are early career with you).

        1. Kandralla, don’t talk down to me lady. I’m a desk jockey! I own my own businesses (in the plural). I’ve never worked in a factory and never will. So it’s not ME I’m worried about. I freely acknowledge that those people overseas are better off for our outsourcing. I call it slave labor just to use a harsh term on purpose, but it damn near is by modern western standards. Call it sweat shop labor or merely “shitty working conditions” if you prefer.

          You wanna know the truth though? I’d rather have a starving Chinese child in China than a starving black child in Detroit. Full stop. I mean that literally and figuratively.

          Full Disclosure: I’m a white dude from the west coast, but I still care more about those poor bastards in Detroit and the rustbelt than somebody in China. It’s not that I don’t feel bad for some poor Chinese farmer. I’m a decent human being. I feel sorry for them. But if it’s somebody doing shitty in my country vs theirs I’m going to prefer it be theirs. All in all I want them to do great, but I think they should do it on their own without our support since it is having an adverse effect upon OUR prosperity.

          The western world and Japan (pre WWII during their initial industrialization) pulled ourselves up by own own bootstraps. We didn’t DEPEND on exporting to the rest of the world to raise our standard of living. We did it ourselves via our own investment in our own infrastructure and our own consumption of said products.

        2. We gave all these countries a HUGE boost by screwing our own people the last couple decades, and all I’m saying is we don’t have enough extra wealth anymore to be handing out indirect welfare to these countries anymore. China has already been intentionally transitioning to more domestic consumption for years now. I don’t think we need to do anything more for their economy to do fine without our going out of our way to help it. The poor countries of the world will pull themselves up just like we did if they have to, so going the whole stupid “humanitarian” route to argue this shit is stupid. How is a starving kid in Detroit less worthy than one in China anyway? You might be able to argue that they’re no MORE deserving, but certainly not that they’re LESS deserving.

          But even if we did “need to” help them to industrialize WHO CARES??? It’s not a moral imperative for me to do something that’s in the best interests of some wanker half way across the world. I’m not a bleeding heart, so I say fuck ’em. My business comes about 80% from within the US, most of the rest from Europe, Australia, and Japan. So for me it’s better for my bottom line to keep Americans in jobs and spending money on my products. When China starts respecting copyrights maybe I’ll give a shit about their middle class doing well, until them I don’t care since I’m in an IP related industry.

        3. As far as no jobs coming back here, you clearly don’t know any of the current statistics. In fact Europe and America are becoming MORE desirable in recent years because Asian wages are getting too high, and once transportation costs are factored in we’re comparable or cheaper for many products that we weren’t just a couple years ago.

          Better automation will return still more manufacturing to physically taking place here, although there will obviously be fewer jobs from that there will still be some increase. Contrary to popular belief even with all the automation that has happened in recent years there are more factory workers than EVER before in human history. It’s simply that they’re not in the USA, Europe, or Japan. So your idea that the jobs don’t exist is false. So if that is false, and much of the reason for the jobs not being here is protectionist policies on the part of China etc, then what is the rationale for it being a bad thing to make it a more level playing field so they can exist here instead???

          I don’t want hardcore 9 million percent tariffs or anything, but making things a little more fair and reasonable and fighting the fight without our good hand tired behind our back doesn’t seem like a bad proposition. If they Chinese are still able to kick our asses when it’s a fair fight then so be it! But that argument can’t be made with things the way they have been getting handled.

      3. ” We cannot compete with near slave labor in almost any industry.”

        Right, that’s why the South won the Civil War…cheap labor. They consistently outproduced the North and easily defeated the Northern armies who had to pay more for their supplies. And the institution of slave labor in the North allowed the new Confederate States of America to invade Canada and Mexico since their high labor costs bankrupted them as they lost all their jobs to the CFA and made it impossible for them to resist.

        1. Don’t be daft. Obviously automation can make up for much of this, which is why we have any manufacturing jobs left in the western world at all. But labor rates are still a huge portion of the equation in many instances. Some industries are simply hard to automate, and in those areas wages are still the primary driving factor.

          The simple reality is that if wages didn’t matter then damn near 100% of the manufacturing jobs would be in the USA, Europe, and Japan since they historically had all of the other “non wage” advantages.

          My point with that original statement was merely that we are not competitive in a very wide range of industries because our wages are too high and the current levels of automation and/or other advantages don’t make up for it. Hence we have a gigantic trade deficit. Those are statements of fact. With increased automation here and increasing wages in Asia the trend is somewhat shifting back to USA/Europe/Japan being more competitive, but in many cases low wage nations will have an advantage for a lot of years to come.

      4. “There’s not REALLY a reason for Boeing to make shit here.”

        There might be, if we lowered corporate taxes, stopped fucking around with the minimum wage, and didn’t force businesses to deal with unions.

    4. Basically they made the argument that several million manufacturing jobs could be replaced by expanding the barista market… They problem is there’s only so many barista jobs that can possibly exist, and we’ve already maxed it out, AND still have fallen millions short. People SAW this up front that the industries simply weren’t large enough shares of the economy for it to work, but it just slid by most people. It’s like saying everybody will go into the cupcake making business, but the nation just can’t consumer enough cupcakes to make the math work. That’s where we are.

      3. If we had a real currency instead of a fiat currency we WOULD NOT HAVE BEEN ABLE TO RUN THIS BIG OF A DEFICIT FOR THIS LONG. Neither could any other country with real money at any point in history. That’s why old school economists cared about trade deficits, cuz they had to send actual gold/silver abroad… And when you start to run out of cash you realize you have a problem. DUH. That’s also why Nixon axed gold conversion. Using funny money has allowed us to fudge this, but the piper must still be paid in the end…

    5. 4. We are literally trading away our accumulated savings, and our future savings/income, for cheap shit NOW that we are not actually being productive enough as a nation to deserve. We’re running up the credit card for trinkets, but foreign companies are acquiring several hundred billion dollars a year of US assets annually. Yes we get a trinket. Yes they must spend it somehow in USD. Either buy our stuff or invest here. The thing is they’re not using it to buy our goods, they’re using it to buy our assets. They’re buying our real estate. They’re buying out businesses that are still profitable/viable. They’re also reaping said returns from all these investments giving them even more USD to invest in owning our asses. If you don’t understand the difference between being a DEBTOR and an OWNER you’re an idiot. Other than tanking our currency on purpose (which would KINDA piss off the whole world, and make us poor) there’s no way out of this small fact.

      Do you want to own the house, or be the land lord? As a country we’re starting out with a paid off house, buy trading 1 percent a year of the equity to foreigners for trinkets to put in the house… Problem is eventually you don’t own the house anymore, they do. Then what do you trade for your trinkets? I guess you have no house, and no trinkets at that point. You don’t have a pot to piss in. That’s how being a debtor works. Personally I think as a country we’d be better off using Warren Buffett as a role model than MC Hammer.

      1. US exports to China:

        https:// http://www.uschina.org/ reports/us-exports/ national

        (remove spaces to make the link work and fuck this site for restricting character length.)

        go ahead. click on a state…any state. Note not only the large volume of goods and services but the huge year-over-year gains. Figure out what the Chinese want to buy and a way to get it to them and rake in the dough as Americans are figuring out better and better every year. This is what Trump wants to fuck up with his tariffs. He wants to cut Americans off from the biggest, most lucrative market on earth.

        1. Funny you should link to a site where they themselves have the text:

          Expanding market opportunities in China requires a variety of tools. China maintains an array of tariff and non-tariff barriers that prevent more American goods, agriculture products, and services from reaching Chinese customers. The United States should continue to bring legally sound, industry-supported cases to the World Trade Organization. Congress should expand the resources at the Office of the United States Trade Representative to build upon the successful track record of using the WTO to address unfair Chinese trade practices.

          So if even a website talking up trade with China is throwing that out there… Well I’ll take their word for it. I mean they are just stating the fucking obvious to anyone with common sense IMO. Imagine what those stats would look like if we’d forced them to accept low/zero tariffs on our imports to gain access to our market! A lot better I’d wager.

          And WOW we’ve increased exports to a country that’s had a growing economy! Duh. But they’ve increased their imports faster. And if you want to look at it purely from a math/pragmatic angle with zero philosophic argument in there that just reinforces the point that we’re getting a shitty end of the deal by and large. It’s complicated shit, I’m not saying otherwise. I’ve never said we don’t gain advantages in certain respects by trading with low wage nations. WE DO. But on balance I think the math says we’ve not come out so hot.

    6. Also to counter the bullshit argument before it’s mentioned, you can say that no voluntary transaction is BAD because both sides saw value in it (fair enough)… But I would argue that in many cases there is a winner and a loser there… Or at least someone winning more. A crack head buying a rock feels that the $20 is well worth the high. The drug dealer agrees that the $20 is better than him having the rock. YAY! Win win!!! Except I think we can all agree that the dealer is the real winner. The crack head got his high, but the drug dealer is getting rich off of the 100 other buyers he has who all have that same short sighted view of life. We’re the crack head.

      5. If we had a real free market economy instead of a welfare state we also would not have this situation. In a free market, with a real currency, our wages would have fallen to third world levels in many sectors. That is how the dynamics of this situation would work when we ran out of gold to ship abroad. We would naturally start producing more here because we would have no money to buy foreign goods, but likely with wages reduced until the market prices of goods were comparable-ish to the foreign made ones. Our fiat currency combined with welfare have made this natural function not happen.

    7. It’s mathematically impossible for consumers to have spent 900K more without 900K staying here in one form or another. Foreign components or foreign ownership in said tire company is the only way any of that 900K could truly “leave” the country. Inevitably some did, but I bet s BIG chunk of it stayed in the USA and was spent on components or trickled out into the broader economy in other ways. The LACK of this type of behavior in recent years is precisely why many economists have said the economic recoveries have been so anemic the last few times around. Back in the day when consumer spending went up basically 100% of that sloshed around in the US economy is one way or another. Now when half of consumer spending immediately leaves the country for foreign shores is it any wonder consumer spending doesn’t goose things the way it once did?

      This shit IS NOT as simple as a lot of “Free trade is always good!!!” people would like to think. I would argue on the GLOBAL level it might always create a net gain in prosperity, but nation states CAN and DO win and lose depending on the particulars of the situation. I’d bet my ass that if you factor in the foreign manipulation, the effects of the money being spent around creating secondary jobs, and the cuts in welfare we could have it would be a net gain by a reasonable amount for us as a country.

    8. We don’t need to go all Rambo on this shit and slap 40% tariffs on everything, but doing tariff matching to keep things fair, and encouraging manufacturing here via tax and regulatory cuts is not a bad thing. MAKING THINGS in the USA is not a dirty or lowly goal. It’s necessary to keep the economy going according to some economists. We just can’t replace 10+ million manufacturing jobs with programmers and baristas. The math just doesn’t work. Even as it becomes more automated keeping the GROSS INCOME floating around the US would still have advantages. Like a bigger tax base.

      Sooo argue that this manipulated, non free market, non free trade is always good FOR US. Try it. I am all about principles, and political/economic theory. It’s amazing stuff. But sometimes you have to sit back and realize that the world doesn’t work the way we want it to all the time. Other times it DOES, but only if everybody plays fair. With a lot of issues, this being one of them, I think free trade could work pretty good if everybody played fair. But they don’t. So should we bring a knife to gun fight? I dunno, but I’d lean towards that being a dumb idea.

    9. “Jesus Christ this stuff is killing me having to listen to it over and over. I hate how all these articles LITERALLY make it sound like a BAD thing that ANYTHING be made in the USA. It’s so disgusting.”

      You’re really missing the point. The problem isn’t making anything, the problem is trying to make *everything* here — even the things that can’t be done very efficiently here.

      “Comparative advantage has to exist. It does fully in some industries, and to a certain degree in all others, depending on what you mean by being more efficient at producing something.”

      You’re making the common, but critical mistake of confusing ‘competitive advantage’ and ‘comparative advantage’. Even a country that is inefficient at everything (and doesn’t enjoy competitive advantages in making anything at all) still has industries where it has a comparative advantage and that country will still benefit from trading with its smarter neighbors. The bottom line for a poor country like this is to focus on making those things its sucks at the least, export some of them, and use the money to buy the things it *really* sucks at making. The country will still be poor, but not as poor as it would be without trading.

      1. I understand the difference, and perhaps should have stated some things better. To correct myself, my point is that we have a competitive advantage in so few industries as to not make up for all the disadvantaged ones. Example: IT as a broad industry is one where we are strong (for now) and has helped hold up the rest of the economy, however the industries where we are not competitive are larger than IT. Hence net decline, hence all the malaise everybody sees in the economy. You can’t replace 1 million factory jobs with 50k baristas, 50K retail store clerks, 50k people in health care, and 50K in IT and think that you’re magically better off. That’s what our economy has done.

        Some of my other points speak to the fact that due to currency manipulation and unfair trade deals (higher tariffs on their end) things DO NOT FUNCTION as you say they should, and indeed as they would in a true free market. We could be the best in the world at making pencils, which would be an export for us, but the world only needs so many pencils. That’s basically us. We’ve saturated things of value that we can export at this point, and nothing new is on the horizon for tomorrow. Maybe 10 years out, but not tomorrow.

      2. So given that situation and since we’ve already saturated the IT market via “exporting” our tech knowledge (and others where we are competitive), how do we proceed given that it is not enough? The promise of the service industry doesn’t work out because we can’t consume enough of said products, and foreigners cannot either. So if the foreigners will not consume any more of our exports where we do have SOME semblance of comparative advantage, what do we do???

        We need to make more of the goods ourselves. This is what would already be happening in a true free market if we had one. Since we do not we still need to tweak the f*cked up system to at least behave in a way that deals with this issue.

        I don’t think anybody would suggest we make EVERYTHING here. I don’t even care about running a small trade deficit. If it were 50 billion a year it would pretty much be a non issue. It’s just one this huge (500 billion in 2015 total counting everything, or 763 billion if you’re looking only at manufactured items) has massive negative long term effects on the economy, and coupled with massive unemployment here, the welfare state supporting those people anyway, etc I think we NEED to produce more here. It’s only that we don’t have a free market or real currency that has enabled it to progress to this point anyway!

      3. How to do it? Modest across the board by country tariffs. Note MODEST. Maybe 10-20% tops. Right now we’re taking marginal industries and throwing them under the bus when we don’t really have to. This would mean we support industries where we’re only at a very small disadvantage, while still allowing the things where we save 80% by importing to continue coming in.

        Alternatively even just “fairer trade” via tariff matching with other countries instead of having lower rates on their imports than they do on ours seemingly would be a reasonable place to start. We’re still at a natural disadvantage in a ton of industries, but even this would be an improvement on the current situation. Given our strengths, combined with the regulatory and tax cuts that may be happening maybe this is enough. Who knows.

        I think as long as we’re not talking 50-500% tariffs on stuff it will mostly only change things on the margins, in other words areas where we DO have a comparative advantage, if not a competitive advantage overall. Fortunately a lot of industries are literally in the area of only being 10-20% cheaper than us nowadays given rising wages in Asia. If we use the tariff income to REDUCE other taxes it’s not even a net “loss” for the consumer. So unless the whole world starts playing fair and having true free markets across the board (no tariffs anywhere, no regulatory differences, no minimum wage, no welfare etc) I don’t see a better way to rejigger things in this manipulated economy.

    10. Well said sir. Open and fair trade deals is what’s needed. Sometimes our fellow Libertarians get caught up in the perfect theory of free-trade that does not exist nor has ever existed in the real world of commerce. Socialists do the same thing when they compare perfect Socialist theory to a functioning but imperfect Capitalist economy.

      1. Well thank you! I seriously cannot comprehend the people who think it’s ok for a country we deal with to have zero tariffs coming in here, and huge tariffs for our goods going in there. That is NOTHING even closely related to free or “free-er” trade as some like to say. That’s just being a sucker and a chump. We have entirely too much leverage due to being the largest economy in the world for us to be getting played like that.

        If China wants access to our market at low rates we should get the same to theirs. If they don’t think the trade off is good for them then they can fuck off. India, Vietnam, etc etc etc might be inclined to step in and accept such terms and could easily fulfill our “cheap import” category of goods if China doesn’t want to on those fair terms.

        We would have zero problems getting countries to line up with GOOD trade terms. Based off a few random spouting offs from him previously Trump MAY be pursuing something along these lines with numerous bilateral trade deals. That could be a good trade policy to go after. One on one, but pretty boilerplate agreements that open things up fairly both ways.

  2. 6. Since we DON’T have a hardcore free market economy we simply have millions of people unemployed, and on welfare. There are not enough “better” jobs that exist to allow these people to all move up the ladder, as modern free trade theory says they should. They just don’t exist. And if we’re being honest, if they did a lot of these people aren’t mentally capable of becoming programmers or engineers etc. So is it better to have them sitting on their asses collecting welfare, or to be working at so-so paying factory jobs? It’s a little known fact that the number of factory workers globally has been UP UP UP. Not down. Even with all the automation it’s still been rising at a solid clip. So it’s not a lack of jobs due to automation (yet at least) it’s just a matter of where they’re located.

    7. That figure out 900K a year for the $41,000 jobs is also missing a BIG part of that. Indirect employment. First off if consumers spent 900K extra, that money didn’t disappear. It went to either profits for the company, or additional suppliers. Usually materials costs are more than labor in most products, I’m sure it’s no different for a tire. Rubber is probably 800K of that 900K a year. I’d bet my life that figure isn’t counting the jobs at suppliers, like rubber suppliers, or the refinery workers processing the petro-chemicals, etc etc etc LET ALONE the extra waitresses and baristas who have jobs thanks to those factory workers having jobs.

  3. SC;DR

    Again, more from that guy who wrote the peace criticizing the play Hamilton!, please….

  4. In contrast to the other guy I’ll keep it short and sweet-You suck Chapman! That is all.

    1. I’m waiting for his Hillary-loving ass to write an article like “The Libertarian Case for Joseph Stalin”.

      1. Yes, of course, Joe Stalin was a Libertarian! He believed in liberty, FOR HIMSELF, as all tyrants do!!!

  5. “”””One of the most irrefutable insights of economics is that if a country can buy something abroad for less than the cost of making it at home, it’s better off buying it. “””

    This is why I don’t give any money to Reason, its better when its free

    1. One of the most irrefutable insights of economics is that if a country can buy something abroad for less than the cost of making it at home, it’s better off buying it.

      Irrefutable insights shouldn’t contain fallacies. The “country” doesn’t buy stuff, individuals or businesses do. Thus, the “country” isn’t made better off – the individuals or businesses who bought it are better off.

      Its a basic category error, not an irrefutable insight. If you want to elevate the basic issue of whether an individual application of comparative advantage makes everyone else better off, you are well out of the irrefutable micro-economic insight and into the speculative realm of macro-economics.

  6. Both Germany and China are mildly protectionist and they are doing fine. So, there’s little evidence that the highly structured trade deals (BAFTA, TPP, etc) that the US has been trending towards are better than not.

  7. “Trump remains completely clueless on trade.”

    lulz. This article highlights how clueless Chapman is on trade. Instead of a learned analysis of the cost-stacks of various trade goods, Chapman just spews theoretical nonsense about free trade. The world is far more complex than what theory holds and free trade between countries using different fiat currency has never been shown to be of clear benefit without protections in place. Heck, the Euro trade union is collapsing because of forced currency valuations to enable free trade. it is unsustainable.
    Free trade between PA and NJ…yeh, that makes sense. Same currency, little transportation costs. Free trade between US and Can….yeh, makes sense typically….similar currency valuation, little trans costs. But there are caveats, which is why NAFTA has existed. Every government uses protectionist policies in certain strategic markets/industries and both US and Can have strategic considerations for where extensive capital and infrastructure have already been spent.
    Free trade across oceans between countries using artificially valued fiat currency and different regulatory controls? Yeh, that’s complex and varies hugely by good.

    The childish “free trade” is perfect and anything less is bad is just stupid and ignorant. Grow up Chapman.

  8. “One of the most irrefutable insights of economics is that if a country can buy something abroad for less than the cost of making it at home, it’s better off buying it.”

    this is a particularly ignorant statement.
    1) it is entirely refutable from about a dozen different directions
    2) “buy something abroad for less”….so using what currency and which government’s taxes? Because that matters….a lot. If I can buy a widget for $0.90 from China, but it costs $1.00 in the US, yes that’s good for the consumer. But is it good for the US in general? That depends on the specifics. Is China dumping that good at cost to obtain market share, then will drive US producers out of business, leading to lower domestic supply and then in a couple years raise the price to $1.50 when there are no longer US producers that have the capital equipment necessary to make the widget. Because that scenario happens all the time….which is why almost every country in the world has tariffs. Which is why “free trade” agreements are drafted to prevent this sort of thing. Which TPP did a horrible job of doing.

    You are not an economic Chapman, or even that knowledgeable of trade.

    1. That’s almost a verbatim quote from Adam Smith. Very ignorant.

      “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy…What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.”

      The Wealth Of Nations, Book I, Chapter I, p. 22, para. 10.

      1. Precisely. I have no idea what all these anti-capitalists are doing on this website, but the depth of their ignorance stuns me.

      2. Ah yes. As if wisdom written in the 1700s…prior to fiat currency…prior to globalism….prior to the social welfare state…prior to centralized income tax, is irrefutable.

        This is the problem with ranting free-traders. A reliance on textbook ‘wisdom’ instead of rational assessment of reality and the best way to manage a country’s place in the global economy.

        1. This is the problem with ranting free-traders. A reliance on textbook ‘wisdom’ instead of rational assessment of reality and the best way to manage a country’s place in the global economy.

          The funny thing is, you probably have no idea how progressive you sound.

          1. You don’t seem to understand what “progressive” means.

            At what point did I propose a socialized, protectionist economic policy? All I’ve done is refute that free-trade absolutism is a na?ve premise and a sign of real-world economic illiteracy.

      3. As a micro-economic principle, its very solid.

        However, as macro-economics, that is, whether the entire country is better off if some people do this, is a very different question.

      4. The problem is that, in a modern welfare society, the bottom rungs of labor basically are essentially a sunk cost (ie, you’re paying them whether they work or not), so the actual cost of employing them is practically nil (the difference between the cost of minimum wage labor and means-tested welfare benefits, basically) for society in aggregate. However, it is not nil for employers, which is a large part of the problem.

        You talk about the cost to the nation in your analogy, but really mean the cost to the employer.

  9. ….so using what currency and which government’s taxes? Because that matters….

    No, it doesn’t. Comparative advantage is *often* driven by good (or bad) government policies. Just yesterday, I read an account by a guy who was in the process of moving his small manufacturing company from LA to Las Vegas because electric power and real-estate are much cheaper there. Why are they cheaper? Largely because of California’s energy and land-use policies.

    Is China dumping that good at cost to obtain market share, then will drive US producers out of business, leading to lower domestic supply and then in a couple years raise the price to $1.50

    Dumping claims are pretty much always BS. The ‘Drive out the competition and raise the price’ nightmare scenario never actually happens. Show me even one case where a Chinese company dumped goods for long enough to gain a monopoly and then raised the price.

    1. “Show me even one case where a Chinese company dumped goods for long enough to gain a monopoly and then raised the price.”

      Dye and pigment synthesis

      There is a long list others, but that is one that I can point to with considerable expertise.
      I find that most people who argue about “comparative advantage” are theorists who have little to no experience in global business.
      About 10 years ago, China went on a capital building spree to development domestic supply and to do so, funded factories with state dollars, dumped product on the global market at near cost, and drove all the weaker suppliers out of business across the globe in a few dozen different industries. What this did was to erase the capital investments that manufacturing requires. Factories, reactors, machines and well as the skills were lost because it wasn’t economically viable. Restarting those companies simply isn’t possible in a older traditional industries and once its gone…its gone. now, supply is leaner, allowing higher pricing on the products.

      1. And where’s the data? Where’s the chart showing the how the prices of dyes and pigments have skyrocketed following the creation of the monopoly (or price-fixing cartel)?

        Note that it simply ISN’T an illegitimate business strategy to invest a lot of capital to enter a new or existing market and lose money for a considerable period of time. In fact, for most capital-intensive industries that already have incumbents, there’s simply no other way to do it. A new entrant is generally not going to make profits until it builds a reputation and establishes itself in the market. And this has nothing to do with foreign vs domestic. Amazon, for example, lost money competing with bricks-and-mortar retailers for *years*, leading many observers to doubt whether or not it would survive or ever earn a profit. Was Amazon guilty of ‘dumping’ books? Uber is in a similar situation now. It has been killing the cab business but Uber itself has been running at a loss and burning through a big old pile of VC money. So in your view is Uber ‘dumping’ rides?

        1. Yes it is true that “dumping” in a certain sense is largely needed to enter into a market much of the time. Let us throw out the whole “to raise prices in the end” portion of that argument and stick with purely market share. China may or may not be able to help drive price increases in the market in the future (I’d say it depends on the particular industry and its future barriers to entry), but what is for sure is that they are intentionally driving out global competitors by taking losses in key “strategic” markets. Once they’ve achieved a certain market share they’re happy, and so may stop running an outright loss, but they’ve still ended up with market share and GROSS income, if not net income for the business itself.

          In the west if an industry provides 1 million jobs and turns a $100 million profit it is considered a failure (margins are way too low!) and will be shut down. In China if an industry provides 1 million jobs and loses 100 million a year it is a success. Why? Because it generated 1 million jobs that pay 5 billion a year (5K a year per head seems reasonable for China) and another several billion down stream in supplier income etc.

        2. They’re looking at things from different metrics. Metrics that are not completely invalid I might add. When it is a strategic industry (maybe steel?) especially such math is not so bad. They’re thinking beyond the direct balance sheet of the actual main business, and looking at the overall economic impact, the secondary jobs created etc.

          This kind of thinking can and does work when executed WELL in limited contexts. As with all dictatorships it depends on the competency of the people giving the orders. I’m sure China would have been more successful with a totally free market than they have been, but the truth is that as far as autocracies go China has been a somewhat well managed one. So while you’re right that any normal business in the west cannot really play at this game effectively, a massive state actor can.

          1. You’re basically undermining your own argument, again probably without realizing it. You say that China would be better off with freer markets, yet you have been making the argument ad nauseum in this comment section that we should be more protectionist like China. So, which is it?

            1. Tariffs supporting domestic manufacturing and accepting massive losses in industries you deem strategic to gain global market share are different things that serve different purposes. A broad tariff still allows a lot more/better market signals to make it through the noise and allow better capital allocation to better positioned industries. Simply declaring from on high “I want us to be the number 1 steel producer in the world in 10 years. Make it happen.” with no more thought than that can lead to some baaad capital allocation.

              As far as us vs China we’re also in completely different real world situations. They have a natural labor advantage, which is obviously still the driver in MUCH of the production that goes on in the world. Otherwise it wouldn’t have largely been sent to lower wage nations. Plus they have an endless supply of such labor. In a certain respect for them this does mean more jobs may be better than industries with the highest margins etc, which is what we focus on in the west. Keep in mind their regime is ACTUALLY concerned with the peasants LITERALLY storming the castle with their pitchforks if they don’t keep adding jobs at an insane rate. This is a real concern for them, and everybody knows it.

              I think in China having been more free across the board would have done them better. That doesn’t mean that every action their government has taken has made them worse off though.

            2. On aggregate letting the “free market” decide things works best overall. I think that is factually accurate statement, and that’s what most folks here believe. When Amazon decides to take a loss for years to drive out competition it is (since it worked) considered a brilliant business move. Yet when a government does it we decry it. But there’s no difference other than who made the decision and who employs them. It was a person making the call at the end of the day either way.

              The real difference in how governments handle situations and business (and which makes businesses generally being better at doing it) is that businesses respond to feedback better because they will go under if they don’t. Governments usually double down on mistakes. The truth however is that SOMETIMES the government fucks up and makes a good decision. Tough to admit, but it’s true.

              The funny thing is there is technically nothing stopping a government from actually paying attention and running things by responding to market signals exactly as a corporation would. After all big companies are notorious for their bureaucracies functioning poorly just like governments typically do, yet they exist and drive the markets and stay afloat.

            3. Theoretically a government could be no worse than a fortune 500 company at running business interests. In practice it never seems to work like that, hence markets are better, but that doesn’t mean there can’t be a sliding scale of competency for how well governments run things. I’m pretty sure Emperor Jack Welch could run a countries economy better than King Kanye West, ya know?

              It’s not being “not libertarian” or whatever to admit the reality that some autocracies are better executed than others. Germany vs Italy is another real world example. Both ridiculous socialist fuck fests, yet who would argue Germany doesn’t run their country better? Lower debt, better functioning government, better economy etc. It is just reality that’s it’s ALL on a scale from perfect to fucked, with nobody actually being at the perfect end of the scale.

              I don’t know everything in the world (obviously), but from much of what I’ve read on China I’ve always got the impression they have indeed learned from the autocracies of the past and created possibly the best technocracy the world has seen thus far. They have chosen many important free market aspects to allow to function, and step in and fuck with stuff in other areas. Overall I think they’ve done a lot better jobs than saaay the USSR or Maoist China did. Would a totally free market have done them better overall? I’m sure. Have SOME of the actions they’ve taken at the government level helped? Statistically speaking some of them surely must have.

    2. To expand on the “gain a monopoly” statement. That is never required. Most traditional industries are supply constrained by the amount of capital investment. If production of a widget is 1000 units/day across six different manufacturers for a demand of ~1000 units/day its a nice static industry that’s reach equilibrium with little ability to grow. One way to enter that kind of market, or grow is t o drive out the weaker supplier. Dump product at low margins for a while until the weakest can’t pay their bills anymore. They close up shop, sell off the equipment, fire the people and you’ve turned the 1000/day into 900/day production for a market that wants more. The consumer enjoys low pricing during the dumping, but then is screwed long term when it is now a sellers market with high pricing due to constrained supply. Adding the capital to increase supply is always risky in older type industries.
      Dumping is difficult to sustain for an individual company, but really easy to do for State actors.

      Opec does it with oil all the time. They are doing it right now to cripple Canadian oil sands. Guess who paid off Obama to kill Keystone.
      It has the added bonus of removing Venezuela out of the market. Saudis are going to be sitting pretty in a few years raking in the profit.

      1. The United States has more natural resources than the OPEC countries, but have been hobbled by dependency on foreign resources due to agencies that profit from foreign collusion to make an obscenely few wealthy from these restrictions on our own resources in favor of countries like Saudi Arabia.

        1. hobbled by dependency on foreign resources due to agencies that profit from foreign collusion to make an obscenely few wealthy from these restrictions on our own resources in favor of countries like Saudi Arabia.

          I doubt agencies like the EPA conspire to enrich the Saudis at our expense, although it is true that environmental restrictions drive up the cost of energy development and make foreign countries like Saudi Arabia more competitive. Even so, the fracking boom in the U.S. and continuing discovery of oilfields such as the Midland Basin in Texas ensure that we are not as dependent on foreign oil imports as you claim.

          1. “I doubt agencies like the EPA conspire to enrich the Saudis at our expense”

            I have no doubt that individuals in the government conspire with outside interests for personal gain.

            I strongly suspect that anti-coal-plant regulations were put in place for the benefit of gas producers and/or China
            I strongly suspect incandescent lightbulb restrictions were put in place for the benefit of companies like GE
            I strongly suspect the Keystone Pipeline was held up by the Obama administration for the benefit of rail companies (looking at you Buffet) and/or overseas oil interests.

            1. I don’t deny that regulatory capture is real. However, I believe those examples can be explained by the ideology of the Obama Administration and its need to build a legacy with the left rather than economic collusion. Certainly, however, those companies favor those policies for their own economic benefit. I think, in those cases, the “Baptists and bootleggers” theory holds more explanatory power.

  10. Trade restrictions are essentially taxes that consumers end up paying with the proceeds subsidizing inefficient, uncompetitive domestic manufacturers.

  11. I have been a Libertarian for many years and now find that REASON magazine appears to becoming not the voice of reason, but a wing of the socialist/Marxist left. I am disgusted with the applauding of this magazine of movements that are clearly NOT independent but fostered and funded by NWO proponents. If the Magazines contributors want to be truly libertarian they need to recognize the fascist/ Marxist roles that the democrat party has provided and stop blaming REAL conservatives for anarchy that has been fostered by the (progressive) educational system which has inculcated a government as nanny dependency for immature brained individuals.

      1. International trade is a Marxist plot.

    1. You make a good point sir. Many of the essays here at Reason.com trend far leftist.

  12. Jesus fucking Christ. Reason needs to get a handle on the comments section. Fuck free speech, this is private property. Pretty much anything would be better than this.

    1. Amen. Holy shit.

    2. Agreed, your comment needs deleted.

    3. You’re not free unless you’re free to be wrong.

      1. This. It’s one of the reasons I don’t censor any comments, even from the bad faith players like AddictionMyth and Hihn. I hope Reason preserves this policy.

        1. Does scrolling past without reading count as censorship?

          1. No. Ignoring someone’s speech does not count as censorship in my book. Precluding someone from speaking does.

            Plus, ignoring someone’s speech may demonstrate to the speaker that he needs to improve the quality of his posts. Outright blocking him does not allow for this.

          2. Nope. Freedom of speech doesn’t mean the right to an audience. If I punch you in the face and tell you to shut up, I’m violating your rights. If I simply ignore you, I’m just exercising my own.

  13. Except that your analysis has no mention of the social cost of a system which exports all of its unskilled and semi-skilled labour to sweatshops elsewhere. Unfortunately, the USA, like any other country, has a proportion of people who need some simple work to do, and in its absence, not only lose all sense of self-worth, but sometimes turn to criminal activity to get money. The cost to society as a whole of entire towns being jobless in incalculable.
    I think Trump is a douchebag. But he has a serious point when he says America needs American steel; it’s better for the health of America. And I write from a country whose entire steel industry has been destroyed by the dumping of cheap Chinese steel, the outcome of over-production but, importantly, over-production wilfully created to ensure Chinese people have jobs. Why should the same steel not save British jobs?

    1. Again, vague utopian moral arguments. Losing self-worth? Cost to society? Health of America? Says who? Give me a break. This sounds more like leftist and rightist nationalist moralizing than anything resembling libertarianism.

      1. Again, vague utopian moral arguments. Losing self-worth? Cost to society? Health of America? Says who?

        Like it or not, there’s more to society than the economy.

    2. You know, this gets to the heart of the problem, I think. In a nutshell, most of the arguments against free trade that people are making in this thread are nationalist. Nationalism is, by its very nature, opposed to libertarianism because it is fundamentally irrational. Historically, nationalism comes out of a strongly illiberal strain of western thought that places a higher priority on emotions than on reason — in other words, love of country trumps love of freedom. So, nationalists are many things, but libertarians they are not.

      1. Your ignorance is sad. You have no factual statements to make, but continue to whine about the discussions you don’t agree with.

        Free trade is not a suicide pact. It is not the only solution. Only the truly ignorant pretend that it is. The book-‘wise’ fools like Chapman and yourself who rant about ideals that have only worked in the real world in select and limited environments. Free trade is a fantastic boon between the States of the US. Common law, federal oversight, and largely homogenous culture make the US a perfect example of free trade.
        Pretending that the same theories apply to trade between the US and China….two countries with radically different common law and culture and fiat currencies that are manipulate for state benefit…is childish, at best.

        It is na?ve to state unequivocally that free trade is the only answer, when we have had no evidence at all that it works across nations of such disparity. One example in the world….just one to point to.

        Problem is, you can’t….there is none.

        1. Free trade is not a suicide pact.

          You burned that straw man good.

          Pretending that the same theories apply to trade between the US and China….two countries with radically different common law and culture and fiat currencies that are manipulate for state benefit…is childish, at best.

          You haven’t shown how these differences negatively impact trade in goods or how China’s manipulation of its currency* negatively impacts the U.S. such that retaliatory measures would be justified. For all your complaining about lack of factual statements, your post is conclusory.

          *As if the U.S. doesn’t manipulate its currency; therefore, according to your theories, every one of our trading partners would be justified in imposing tariffs and other forms of protectionist relief on the U.S.

          1. “according to your theories, every one of our trading partners would be justified in imposing tariffs and other forms of protectionist relief on the U.S.”

            Well, yeh. They do. All the time. It’s the way of the world.

            At this point in time, the global economy is not one of free trade, but rather of nationalistic interests and protectionism. It is a global economic competition and other countries, like China as a prime example, are fighting as hard as they can to ‘win’.

            Ignoring the reality of this competition, and refusing to fight for national interests, by abdicating any economic policy that isn’t unbridled “free trade” is blindingly na?ve.

      2. If libertarianism was just about anarchy (in the normal sense of absence of government/borders) you’d have a point. But as long as there is even a minimal government, they are going to define their borders and who is a citizen. I think this will automatically instill at least a mild amount of nationalism (us vs. them mentality) in the citizen’s of that nation. The trick, in my mind at least, is finding that balance between love of freedom and love of country.

        1. yes, absolutely.

          You can see that balance in bilateral relationships. The anglo-countries are a prime example. UK, US, Can, Aus, are all very different, all have love of country, but yet largely find a balance in relationships and trade. There is some protectionism, but it is mild.

          The opposite is seen in the Eurozone. Germany compared to Spain or Greece is a prime example. The force-free-trade system is collapsing on itself because the balance has not been achieved. The different nationalistic and culture viewpoint of the Germans/Greeks creates an imbalance that is proving the point that unbridled free-trade is an ideal that is very difficult to achieve in the real world. And this is between two countries of significant cultural overlap. What does that say for the viability of unbridled free trade between the West and Asia?

      3. I don’t think you really have to be a nationalist or an ideologue of any sort to be a trade skeptic. If Chinse imports put half the people in your town out of work, they aren’t going to turn to robbing the Chinese (directly or through welfare).

    3. The way to solve that is to make America more competitive, not to make foreign manufacturing less so by artificial means like tariffs. Cut regulations, drop the minimum wage and corporate income tax. Otherwise, we’re just shooting ourselves in the foot.

      1. The way to solve that is to make America more competitive, not to make foreign manufacturing less so by artificial means like tariffs.

        Isn’t the whole kerfuffle about some foreign manufacturing being made artificially competitive in the first place? Is it wrong for a nation to bargain for actual fair trade and if not, what is inherently wrong with saying “you stop artificially influencing the market or I will make it more difficult for you to sell here”?

        If you were a lemonade vendor, would you let your neighbor’s kid, who gets $20 for his costs from his mom to sell lemonade in your yard for a cheaper price than yourself? Pretty sure you’d either tell him to cough up some money or fuck himself.

        1. what is inherently wrong with saying “you stop artificially influencing the market or I will make it more difficult for you to sell here”?

          What is inherently wrong about that is that it restricts the choices of individuals and private companies.

          The problem with the lemonade analogy is that the country isn’t the private property of the federal government. It is the private property of millions of individuals and corporations, each of which has the right to decide who gets to sell what on their own property and to engage in whatever economic transactions they deem appropriate.

          1. So what you’re saying, which is in my mind the correct libertarian argument, is that EVEN IF national GDP is lowered by unfair international trade (they have more restrictions on our products going in than we do on theirs creating an unnatural imbalance) that it is the moral thing to not try to restrict trade on our end. You place the morality over what potential real world GDP gains might be made as a nation by playing hardball.

            In this instance I may not agree, but I can accept that as a reasonable position to take.

            If we were Spain or something (not much bargaining power) I’d say maybe that’s the way to go. But we’re not. We’re the USA, the largest economy in the history of the world. Just as we opened up Japan to trade with cannons in the 19th century I think in the 21st century we could open up trade with everybody by not firing a shot. The mere threat of cutting them off if they don’t match our lower tariffs would achieve this I believe. Those countries can’t afford to lose us as a customer, but we can afford to start buying from others who will play ball. I say we use our leverage to create real free-er trade instead of letting ourselves get screwed.

          2. Start with a smaller nation and actually cut them off if they don’t agree to our terms. That will set the tone for us being serious. I bet nation number two we make demands of will cave. If not is it any great loss to lose a relationship with Thailand or whatever when India, South Korea, Vietnam etc etc etc will all bow down so we don’t crater their economies too? After the first couple get cut off we will definitely get our way.

        2. Is it wrong for a nation to bargain for actual fair trade

          Yeah, it is wrong. If Japan wants to pay us to buy their cars, why should we stop them?

          If you were a lemonade vendor, would you let your neighbor’s kid, who gets $20 for his costs from his mom to sell lemonade in your yard for a cheaper price than yourself? Pretty sure you’d either tell him to cough up some money or fuck himself.

          That’s a disingenuous comparison. The government doesn’t own the country.

          1. That’s a disingenuous comparison. The government doesn’t own the country.

            Try not paying taxes on your property and you might change your mind about that…but you make a cogent point.

        3. “Nations” do not bargain. Governments do, betting with the welfare of the people under their jurisdiction.

    4. So instead of erecting barriers to trade, why not lower barriers to employment for the low-skilled, such as minimum wage requirements and occupational licensing? While I might agree that people need jobs, I don’t trust the government to figure out just what those jobs should be.

      1. Those are indeed the places to start! The truth is if we start there, we may not even need to do anything else. I’m not stuck on any particular way to achieve the goals (a stronger economy in general) but we need to do something because the current system isn’t working. I think minimum wages, taxes, and regulations are the first 3 things to deal with. After that see how things are going and if anything else is even needed. If so think about the most reasonable next steps and proceed.

        If we are doing well enough after those changes maybe we can continue to have unfair trade deals and still be doing fine, and if that’s the case I’m all for it. If we had reasonably full employment and virtually ZERO manufacturing as a nation that would be fine. It’s just that we don’t. We have millions on welfare. There’s more than one way to skin a cat and starting with the least intrusive means is obviously best.

  14. Only about 14,000 Americans are employed making footwear. About 324 million Americans, on the other hand, wear shoes. Putting up barriers to foreign-made shoes would injure far more American workers and families than it would help.

    “Shoes for Industry! Shoes for the Dead!”

    1. “Only about 14,000 Americans are employed making footwear.”

      Now

  15. The truth is that protection against foreign trade leads away from prosperity and strength. A country that deprives itself of foreign goods is doing to itself what an enemy might try to do in wartime?cut it off from outside commerce. It is volunteering to impoverish itself.

    If we embargo ourselves we’ll be rich!

    1. Build a wall around the entire country! Think of the JOBS! Those ancient Chinese were pikers!

  16. The focus shouldn’t be on increasing the costs on products from other countries but lowering them on ours. We have what is well more than the equivalent of a 20% tariff on our own goods that we produce here in the US. this should be an opportunity to take this anti-tariff sentiment and ask we choose to add the equivalent in taxes to products made here. “it just drives up costs to hurt consumers”. the

    1. burdens from regulation are more than equivalent than 20% tariff on our own goods. if i didn’t make that clear..

  17. stealing our companies and destroying our jobs

    So… “You didn’t build that”? Apparently US corporations are collectively owned now. I’m not going to say Trump is a Fascist. He’s not. But there sure are some similarities.

    1. You don’t own your company.

    2. Whoa whoa whoa, Zeb. You can’t just throw terms like “fascist” around like that. You have to save it for the people who really deserve it, like Hillary Clinton and Barack Obama. Applying it to Trump only proves you’re TDS-suffering DemOp proggie socialist cuck who hates the Real America.

      1. PA, I didn’t see your name on the Hihn Reason Fascist List, and we will decide who will uses our branding, thank you very much.

    3. Yeah, nobody has ever used collective language when referring to things in their country without being a Fascist. BTW, how’s the night life in your town?

      1. Well, good thing I said he’s not a fascist, isn’t it?. But the notion that companies are obliged to work for the collective good and not for their own economic best interests does invite the comparison.

        how’s the night life in your town?

        There’s a restaurant that sometimes has live music.

    4. “He’s climbing thru ur windows, snatchen ur people up”

    5. Both the left and right agree: businesses exist for jobs. Like how education exists for teachers.

  18. Also, Hihn really has to update his fascist list. Jiminy Christmas!

    1. ONE more stalker from the PAULISTA CULT (snickers barz)

      1. somethingsomething goobers somethingsomething bullies

    2. I need to find this thread, it sounds like a goldmine of Mikey lunacy.

  19. When did Dick Gephardt start commenting at Reason?

    Did I miss a meeting or something? Is economic protectionism something we do around here now? Good lord.

  20. We would have been way better off had we bot started tariffs and subsidies to began with. Tgat is the place we need to get even if done unilaterally. The are at least a couple legitimate issues (rent seeking not being legitimate) to deal with. First is the anti-business taxes and regulations not just at a Federal level but a S&L level as well. Hey we’ll make it suoer expensuve to do business here but take those jobs somewhere else and you can still have full access to our consumer market.

    1. I’m not saying we should let that stop us, but it needs to be addressed and until it is, it remains a major roadblock. The other issue being to short term but major impact on effected industries. Had we never had tariffs or subsidies, those industries may have never existed in the first place or would have migrated at a slower pace. But when you have them and then all of the sudden take them away, you get that giant sucking sound Perot talked about and entire towns left high and dry. Again, should not stop it, but let’s not pretend that is not what got us where we are today with protectionist attitudes. Their not nationalist, they’re pissed because their jobs are now gone and the only replacements where they live suck. Obviously they need to move but not going to keep them from being pissed

      1. That beimg said, I don’t thibk we should be moving backward. But I dont see us moving forward until these issues are addressed. The first issue is easy. Cut taxes and regs. The second issue a little harder to deal with.

  21. The U.S. auto industry has plants in Mexico that make cars sold in the U.S., to the horror of the new president. But if he guts NAFTA, those jobs won’t all move here.

    Yeah, since ALL those jobs won’t move back here then why even bother trying to get some of them back here. Who cares if governments and big corporations make deals with each other to easily move jobs across borders, that’s what Reason calls FREE TRADE!

    Detroit is now a libertarian paradise thanks to free trade.

    1. Detroit is a shithole because of trade?

      1. Well on 8 mile, every other business is a liquor store, fast food joint, or strip club so I’m not sure why they’re complaining?

      2. It has nothing to do with Detroit’s government or its union cronies, I assure you.

        1. Or General Motors and Ford producing inferior products for higher prices.

    2. Who cares if governments and big corporations make deals with each other to easily move jobs across borders . . . .

      Why do you hate private property? Who owns those companies, you or the shareholders who approve of investing capital where there are greater returns? Why are non-owning Americans owed jobs or pretty much anything else from these companies?

      Also, technology and changing market demand “kills” jobs much faster and on a more permanent basis than trade between nations. In that case, how does one determine when the U.S. has “too much” technology?

      Detroit is now a libertarian paradise thanks to free trade.

      Yep, because Detroit is the only U.S. city that engages in free trade.

      Maybe something other than free trade decimated Detroit. Maybe.

      1. “Why are non-owning Americans owed jobs or pretty much anything else from these companies?”

        They seem to have gotten the mistaken notion that a job is something that they “own” rather than a voluntary agreement between two parties that can be modified or ended by either one at will.

        1. a voluntary agreement between two parties that can be modified or ended by either one at will.

          Yes. Interestingly enough, protectionist MikeP2 above provides the U.S. common law as an example of why free trade works between the States. Of course, at common law, one must have privity of contract to be entitled to anything from it. Most of these people complaining about jobs “moving overseas” haven’t demonstrated such privity.

  22. I agree with Chapman’s premise of Free Trade, but disagree that TPP was a good deal. It had a lot of very bad carve outs for various industries (especially WRT copyright to protect Hollywood) that was bad policy. I prefer to negotiate one on one with other countries, and get the best deal we can with each nation (which also creates incentives for each country to compete with another to have the freest trade with the US). While NAFTA is a relatively good law, it still is too restrictive in some cases, and the US should definitely look at restructuring the arrangements within it that do not support freer trade between Canada, the US, and Mexico to help have a truly free trade zone in North America.

  23. The idea that the economic interests of the owners and employees of domestic manufacturing companies in restricting foreign competition at the expense of higher prices for the entire consuming public (most of whom work in service industries – not manufacturing) somehow translates into “what’s in America’s best interest” is absurd on it’s face.

    When it comes to economics, there is no such thing as THE national interest. Anyone claiming otherwise is simply engaging in rent seeking. There are merely varied and sundry competing individual interests.

    The major cause of the reduction in manufacturing employment is automation anyway – not outsourcing to other countries. We are manufacturing more stuff with less people and that’s not going to change. And that automation is spreading far beyond manufacturing and that’s not going to change either. The people yammering about jobs would do well to keep their eyes on that trend as it is far more significant than foreign imports.

    1. “When it comes to economics, there is no such thing as THE national interest”

      That is a silly and ignorant statement.

      Labor laws are in the national interest and have significant economic impact. Environmental laws are in the national interest and have significant economic impact. Maintaining manufacturing ability in key industries is of significant national interest. Yes, the USA must maintain a high level of ability/skill/competency in a variety of core industries for national security reasons. Only a fool would think a superpower should abdicate auto, plane, ship, steel, energy, food, chemical, refining, aerospace to globalism.
      National interests take the long view…not the benefit to a consumer for next year’s pricing on sneakers.

      1. “That is a silly and ignorant statement.”

        You will never be the least bit capable of proving it.

        1. Nor will you be the least bit capable of disproving it.

          1. MikeP2|1.27.17 @ 11:19AM|#
            “Nor will you be the least bit capable of disproving it.”

            This guy actually posted this!

      2. That’s pretty much the most blatantly fascist post I’ve seen in quite a while.

        1. Sadly, you do not understand what fascism is.

          1. Do you know who else didn’t understand what fascism is?

      3. You seem to have missed the point entirely.

        Declaring that there is a single “national interest” means placing supposed collective interests above the interests of the individual. Which is pretty much anathema to libertarianism.

      4. Re: MikeP2,

        That is a silly and ignorant statement.

        It’s not and it’s not.

        Labor laws are in the national interest

        Now THAT’S a silly and ignorant statement.

        National interests take the long view…not the benefit to a consumer for next year’s pricing on sneakers.

        Silly humans! So puny! How can you compare to the greatness of the Vaterland?

        1. ah yes, someone went full Godwin.

      5. He’s saying you first need to define what “the national interest” means, because a nation is made up of millions of individuals and groups that may have competing interests. Will you resort to base utilitarianism? Rousseau’s General Will? I haven’t seen any argument for a common or national interest that is not reducible to the subjective preferences of the person making the argument, but maybe you’ll be the one to crack that nut.

      6. National interests take the long view…not the benefit to a consumer for next year’s pricing on sneakers.

        You simply assume that free trade – or at least our imperfect system of free trade agreements – is not in the national interest. You also assume that free traders do not take the long view while protectionists do.

        1. “You simply assume that free trade – or at least our imperfect system of free trade agreements – is not in the national interest.”

          Not true at all. Free trade is wonderful when it is feasible. The point I’m making is that free-trade absolutism is na?ve in the current global economy.

          1. Any absolutist position is bound to fail. However, you still haven’t explained how the current system of free trade agreements has actually harmed the national interest such that the measures* you seem to support would be justified.

            *Even from reading your other comments, I’m still not sure exactly what those are.

            1. “the current system of free trade agreements”

              What free trade? Where in the world does it exist? All the complaints are about Trump proposing moving from one protectionist plan to a different protectionist plan, with morons like Chapman screaming like its the end of the world.

              NAFTA isn’t free trade. It is free trade in many things, but managed in a number of key areas.
              TPP was never free trade. It was absurd crony protectionism.

              Perhaps the biggest issue on this comment board is the lack of understanding of how much protectionism already exists around the globe. Free trade is the anomaly, not the norm.

              1. “free trade agreements

                You seem to have missed that part. And agreements like NAFTA moved us closer to the free trade ideal, although it could use some work (hence why I called the system in general “imperfect” in a different comment). Same with other bilateral trade agreements. TPP, on the other hand, did have a lot of problems with it. But your beef seems to be that these agreements are too protectionist, and therefore we need more…protectionism.

                1. Edit: strike “other” from bilateral trade agreements; NAFTA is multilateral.

                2. Point. I’m stuck in the mode of responding to people who think NAFTA = Free Trade, or that somehow everything already is “free trade” and Trump is taking that away.

                  “But your beef seems to be that these agreements are too protectionist,”

                  Yes, they are too protectionist, although I would say the biggest complaint is that they are protectionism designed to be manipulated.
                  My beef is with the irrational complaints that everything Trump is doing is the antithesis of Free Trade. It’s absurd, and based on a na?ve understanding of current global trade situation.
                  I have never said we need more protectionism, nor implied that is of benefit. All I’ve argued is that in the current global situation free trade is a pipe dream outside of a few relationships and a degree of protectionism is warranted. Some protectionism at this point in time is smart and to the benefit of the US economy and populace.
                  And really, since the vast majority of our trade is already conducted under protectionist policies, it is mindboggling that the commenters here seem to think that this is something new or different.

          2. Yes, free trade would be great if governments didn’t fuck it up. Therefore, the solution is to have our government fuck with free trade even more.

            1. What it all boils down to is a rationalization for more rent seeking.

              There is really nothing more to it than that.

            2. “Yes, free trade would be great if governments didn’t fuck it up”
              I agree completely

              “Therefore, the solution is to have our government fuck with free trade even more.”
              Silly absolutism. Free trade exists in rare little microcosisms around the world. No one has proprosed, certainly not myself, fucking with free trade where it exists and is working. The argument is against forcing unilateral free trade into situations where it is doomed to failure due the one government on the other fucking it up. TPP was one such agreement and we are all better off that it was killed. It was nowhere close to free trade, but a complex system of managed trade designed to be scammed.

              1. More silly rationalizations for rent seeking.

      7. What about the US domestic banana industry? Wouldn’t it be in the national interest for us to protect the domestic banana industry from all the cheap foreign imports? Think about the jobs we would create with greenhouses everywhere. Just because an economic sector is inefficient and uncompetitive doesn’t means it shouldn’t be protected. Why just steel and automobiles? Just think of the opportunities to protect inefficient domestic producers. And, we could pay them higher wages because they are protected.

      8. “National interests take the long view”

        The policies that you mentioned take the short view. It’s interesting that you aren’t self-aware or educated enough to realize when you’re undermining your own contentions.

        1. Not nearly as interesting as your inability to articulate a counter-point, but instead sling insults. Bravo.

    2. When it comes to economics, there is no such thing as THE national interest.

      Which makes both the argument that free trade is in the national interest and the argument that protectionism is in the national interest equally invalid, no?

      1. It isn’t that free trade is in the national interest.

        It is that free trade is the only thing that doesn’t violate the unconditional and absolute individual right to pure freedom of contract.

        1. Yes. And what could be better for the “national health” or be more moral than a nation which respects private property rights?

    3. As I said above feel free to replace “national interest” with national GDP if you like. I believe that it is possible for trade to happen that is best for any given individual, while still lowering national GDP. So then the question becomes is that good or bad? Is it good to lower GDP by say 300 billion a year since it saves individual consumers 60 billion a year (20%)? Let us not forget that as Americans we all enjoy a higher standard of living because our “collective” society is very wealthy.

      A janitor in the US lives in a house with sturdy walls, electricity, heating, running water and a big flat screen in the living room. A janitor doing the exact same thing in India does not.

      Whether we like it or not as libertarians the health of the economy overall has a direct impact on our own well being. It doesn’t matter if you are a janitor or a doctor or a lawyer, we all have a higher standard of living by virtue of living in the USA vs the same job elsewhere.

      I’m obviously not big on getting caught up in worrying about “the collective good” most of the time, but you can’t completely ignore the reality that at the very least your tax bills and standard of living ARE in fact related to the overall health of the country’s economy. Finding a balance between freedom and real world practical benefits is where it is all at. That’s the difference between an outright anarchist and a libertarian. Different people may draw their lines in the sand in different spots.

  24. Why the fuck are all you protectionist assholes above complaining that a website with the motto “Free minds and Free Markets” is publishing articles advocating the free market position?

    1. They all want to pay more for everything – and I mean everything – so that a few thousand jobs are created for lower-skilled workers.

      1. a few thousand jobs are created for lower-skilled workers.

        In theory, anyway. Fingers crossed.

    2. The yokels have decided that this place should be their safe space for some reason. They were perfectly happy when Reason was criticizing a Dem administration. Hopefully they go full-on MNG/joe and leave in a huff sooner rather than later.

      1. I don’t think the commentariat, or the yokels, have been perfectly happy with Reason at any point.

        1. Yeah, but now they just incoherently screech “PROG” and circle jerk about how much they hate Robby because he’s not a firebreathing asshole like them.

          1. To be sure, Robby could stand to not bend over so much in some of his articles.

            But damn, that hair! How could anyone hate him.

        2. I think it’s desirable to criticize the arguments Reason makes. Critical thinking entails the critique. Of course, it’s also desirable to criticize the arguments that any given commentor makes for the same reason.

          1. But just yelling PROG or TDS isn’t constructive.

            1. True. But neither is yelling YOKEL.

              Nevertheless, I believe that both the cosmo and yokel camps have a point about each other…

    3. Chapman’s article was probably linked somewhere else, cue the flood.

      It’s like how Reason’s Facebook page used to be rife with diehard Republican crazies, at least in the early Obama years, or how we got a massive spill-over of randoms when Cathy Young Gamergate articles were published.

      1. judging by the comments, linked at AmCon, apparently.

    4. Yeah that’s great in theory but we don’t have a true free market so any regulations that move us even further away from that are OK.

      1. That reminds me of a Facebook comment about Betsy DeVos, which said, and I paraphrase, “I think we should abolish the Department of Education, but if we’re going to have it, lets at least have someone competent in charge.”

        Competence, i.e., someone who will deepen the status quo. In other words, we should abolish DOE, but since we won’t, lets expand its role in education.

    5. I think many of us protectionist assholes were using our free minds to argue that the article is wrong. Some might also argue that free trade is antithetical to a classical notion of free markets.

      1. Some might also argue that free trade is antithetical to a classical notion of free markets.

        If they were retarded they could.

  25. Silly Chapman, you see China has tariffs and subsidies, which means we have to adopt Chinese-style state capitalism to compete.

    1. We have to beggar ourselves to stick it to China.

  26. The neo-mercantilists will have to learn the same hard lesson that the “living wage” advocates are learning right now in San Francisco.

    Firms and individuals do not have unlimited resources to obtain the goods and services they want. Forcing someone to pay more for the products of politically favored firms and industries means he will pay less for other things. Workers will lose their jobs, but since they do not work in politically favored industries, the neo-mercantilists don’t care about them. Eventually, due to the inefficiencies that infect politically protected firms and industries, those firms, too, go bankrupt, and the only producers left are directly supported by government largesse.

  27. The theory that government can arrange people’s lives better than they can themselves has less real-world confirmation than the theory that people left alone will arrange their lives better than the government could.

  28. Trump remains completely clueless on trade.

    And the nationalistic calls from Trumpistas are getting creepier and creepier.

  29. this is the first time in history that chapman makes more sense than the commentariat.

    holy shit this thread makes me sad. protectionists everywhere.

    http://tinyurl.com/hncowdu (it’s an aei report. sadly not porn)

  30. Got to side with Trump on this issue. Sure importers can make money by using cheaper labour forces. However in the long haul that just brings our society down to that of the slum that makes the product. It should be obvious but greedy people only see the short term advantages. Fortunately Trump understand a little more than the author this time around.

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  32. I don’t know everything in the world (obviously), but from much of what I’ve read on China I’ve always got the impression they have indeed learned from the autocracies of the past and created possibly the best technocracy the world has seen thus far, good post for discussion.
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  34. I want to argue that he, just like everyone else on the planet, sometimes speaks imprecisely. I have zero sympathy for someone who writes something imprecise. I give plenty of leeway to someone not actively considering what fraction the word “some” implies for a previous sentence.

    “said some significant fraction of Mexicans were criminals” yeah.
    “possibly intentionally implied” sure, fine.
    “claimed” no.

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