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Study Attempts to Show Exactly How Trump’s Trade Wars Devastate the Poor

How to erase billions from the American economy.

ShippingCredit: Ruth and Dave / photo on flickrDonald Trump's populist-fueled ignorance about how world trade works makes economists tear out their own hair. He thinks trade deficits between the United States and other countries mean we're somehow getting screwed over and not the actual reality that we're buying goods that we want more cheaply. You have a trade deficit with your local grocery store, but you're not getting screwed over by them (well, maybe on that overpriced Greek yogurt).

But politicians have to take the blame, too. Trump is far from the first candidate for office in either party promising to "bring jobs back" from overseas through either incentives or punishments or some combination. Regardless, economists have been trying to break through the trade ignorance of the election cycle, without much success. For those who feel like they've stagnated in the current economy (even if we're able to buy more and better things with the same amount of money), it's tough to buy the argument that the country is actually better off.

The analysts at the National Foundation for American Policy (NFAP), a nonpartisan, nonprofit free market-oriented think tank, released a new report with an attempt to put a price tag on how much harm Trump's proposed trade wars would cause to Americans, particularly the poor.

They are taking Trump at his word that he wants to impose tariffs on Mexico, China, and possibly even Japan in order to try to push lost jobs and manufacturing back into the United States. The first thing NFAP notes in this study is that history shows that these kind of targeted tariffs don't work to bring jobs back. In previous examples of the United States increasing duties on selected goods from selected countries, we ended up getting more imports from other countries that weren't hit with the increased costs. It was still cheaper to get the products elsewhere even when we punished specific countries.

If Trump were somehow able to make the tariffs "effective" and prevent alternative imports, report writers David G. Tuerck, Paul Bachman, and Frank Conte say the tariffs would have the impact of an $11,000 consumption tax over five years for the average American household. And it's regressive. They predict it would hit poor people the most, consuming 18 percent of the after-tax income of those in the lowest 10 percent of incomes in the United States.

If Trump were to go so far as to introduce tariffs against all countries in order to really try to force those lost jobs back into the United States, it would end up costing consumers $760 billion annually in increased prices, but the benefits to producers and to the government in tariff revenues would total only $301 billion. That leaves a "dead loss" of $459 billion. If Trump were to introduce this all-in plan, the increased costs would consume 53 percent of the after-tax income of the poorest 10 percent. If we move up to the middle levels of incomes, it would still consume an additional 13 percent of after-tax incomes.

The report is not blind to the economic realities that have helped Trump's arguments. It is aware that yes, some American workers have been pushed out of careers due to trade, and these are typically low-wage workers in low-skill jobs that have been displaced by other countries able to do the work more cheaply. The report notes that these "low-wage workers … find that their already poor circumstances get even worse. These are the workers to whom Trump is appealing."

That's why the focus on how the tariffs would hurt the poorest sectors of the American economy is so important. That huge gap that the report calculates between what Americans would pay in higher prices versus the domestic benefits for manufacturers and government revenue shows that it can't simply be reversed and that things can just go back to the "way they were." Those jobs are probably not coming back, not to the extent that they once existed. Whatever the solutions may be out there to helping our poorest, least-skilled workers, Trump's trade wars won't help them any more than massive increases in the minimum wage will. The report concludes:

"In any event, it turns out that the worst thing that could happen to low-income Americans is for the Trump tariffs to work. We find that the proposed tariffs against China, Japan and Mexico would impose what amounts to 18% additional tax on the poorest 10% of U.S. households and 6% on the next poorest. The richest 10% would be the least affected American income earners. The U.S. economy would suffer a total burden in the form of a $278 billion loss in household purchasing power – akin to a general 3.9% new tax on after-tax income. On the plus side, a small portion of this burden would be redistributed to U.S. producers, who would benefit from the new tariffs. But that leaves a dead loss of $170 billion of consumer income that would simply vanish owing to the distortions in the price system created by the tariffs. And, on the negative side, it is not clear that a substantial new tax on household income would simply transfer purchasing power from consumers to beleaguered workers. Our analysis assumes that prices would rise by the amount of the tariff. Nominal wages might fall, with predictable negative effects on labor participation."

Read through the report here. Politico also made note of the study here

Photo Credit: Ruth and Dave / photo on flickr

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  • John||

    Yes. everyone knows the argument. The problem with these numbers is that it assumes there would never be any sort of market adjustment. That people would just pay the tarriffs and never adjust their behavior accordingly. That is a pretty fucking stupid assumption. Tarriffs are nothing but taxes. They like all taxes distort the market. But the market also adjusts as people adjust.

    Foreign companies would still want to sell in the US. And there would still be a demand for the goods. If there wasn't, then none of these "but consumers lose" numbers would be true. The companies would do what the Japanese did when Reagan put tariffs on; start building their products here. That would of course still over the long run cost consumers since the reason why the factories were not here in the first place is because it cheaper overseas. Whatever that cost is will be something less than the cost of the tariffs. Basically the economy would adjust and more shit would get built here but at a higher price.

    There is a case to be made against tariffs. Sadly, this study doesn't make it. It makes a retarded and disingenuous argument that anyone with any sense should see right through regardless of their view on the ultimate issue.

  • John||

    And it takes two sides to have a "war". If trade wars are so horrible, and they are, why would other country's when threatened with tarriffs not offer us something in return for no enacting them? Are Mexico Japan and China suicidal? Moreover, since they are the ones running the trade surplus, don't they have more to lose and thus even more of a reason to give some concessions if we insist on them?

  • Agammamon||

    But we have no reason to insist on them.

    Let Mexico, Japan, China do what they want - drop the trade barriers on our side. Even if they will buy *nothing* form the US, American consumers are still better off in this situation.

  • John||

    If only it were that simple. It's not. By constantly letting them screw us, we end up running a deficit and getting poorer and more in debt. You can't run a trade deficit forever.

  • Agammamon||

    Yes you can.

    We get goods and services, they get paper. Paper that is worth less every day they hold on to it.

  • sarcasmic||

    But, but, but money is wealth! They give us cheap stuff and we give them money! We're losing! We'd be better off with the money than with the stuff! I mean, those "crazy" people you hear about who live on the streets, and when they die you find they have millions in the bank, they're the smart ones! They understand that money is where it's at! They shun "stuff" in favor of money! You know what? I think I'm going to sell everything I own except a suitcase and some clothes! I'll stuff all the money into the suitcase! I can live on a park bench! But I'll be rich! Rich with all that money! Rich I tell you! I won't have a trade deficit!

  • Mr Drew||

    You are suspiciously close to conflating trade deficit and national debt.

    The idea that a trade deficit leads inevitably to national debt is conjecture (and a poor one at that).

    I don't care about trade deficits. Here in America our number one manufactured product is Wealth.

  • Shit Pyrate||

    John. Do not buy into the Old Guard Mercantilism of the Republican Party that you so abhor.
    Your economic policy should be aligned with your foreign policy.
    Letting your businesses move over seas is a good thing, as long as you let new businesses take their place domestically, according to free market principles.

  • Shit Pyrate||

    Reagan understood this.

  • See Double You||

    OT: Old man Bernie was in my town yesterday. The local rag put this photo of him above the fold. Anybody else a tad creeped out by his picture?

  • See Double You||

    I should also add that he makes that pose in every picture of him giving a speech. He's got the angry old white man look down pat, and yet lefty Millennials think he's cool. It seems even identity politics can't overcome the widespread longing for forced wealth redistribution.

  • Emmerson Biggins||

    Ya. Shit. Emperor fucking Palpatine.

    Bernie, I think you are mistaken if you really think the government should be providing cradle-to-grave care for all aspects of your lives.

    YOU WILL FIND THAT IT IS YOU WHO ARE MISTAKEN. ABOUT A GREAT MANY THINGS

  • See Double You||

    He apparently thinks rural conservatives would vote for him because they would find free college appealing. Maybe they would; conservatives seem to be fiscally liberal and socially conservative.

  • ||

    Have you ever seen Bernie and this guy at the same place at the same time?

  • Wasteland Wanderer||

    He reminds me of The Penguin in that picture....

  • John||

    I would also point out that "poor" and "consumers" are not the same thing. Are some consumers poor? Sure they are but not all. Not all consumer goods are consumed equally. Reason hipsters paying more for their smart phones or other luxury goods, while not good, wouldn't exactly devastate the poor? How much these tariffs would affect the poor versus anyone else is a question that requires a bit more thought than the study or Scott has given the issue.

  • You Sound Like a Prog (MJG)||

    You should let this team of economists know that, after skimming* a blogpost summary of their work, you have determined that they haven't put much thought into the issue.

    *being generous

  • John||

    I don't think it is a good study. If you think it is, say why. Since when is appealing to authority considered good argument?

  • You Sound Like a Prog (MJG)||

    1. You appealed to authority the other day. I'm following your lead.

    2. I lost most of my interest in the study when they said they focused only on consumer goods and did not address intermediate goods. I think the latter is much more important. From what I've read so far, it all looks standard. It's interesting and a valuable point, addressing what the damage could be if policies worked as intended. That's fair analysis. I'm more interested that you, having clearly not investigated their methodology, declared them wanting, apparently because of one sentence in their conclusion. Though, like a good John, you're switching topics; I was talking about your "they don't look at what poor people buy!" complaint, not their assumption about the effect on prices.

    Anyway, I'm going to go enjoy my Chinese and Mexican "luxury goods."

  • John||

    The assumption is that prices will rise across all forms of goods. They never examined what kinds of goods price would go up and how that would affect the poor versus the rich. Just how dependent on foreign made goods are poor people as opposed to the middle class or rich? Do we import more necessities or luxury goods?

    I didn't change the subject You just ignored my point. And fuck you for doing it. Sorry you are unable to have an honest discussion.

  • John||

    And which part of this

    Our analysis assumes that prices would rise by the amount of the tariff.

    Do you not understand? They are assuming prices would rise uniformly. And that is a very large assumption.

  • You Sound Like a Prog (MJG)||

    Actually, I'm curious... what do you think this means?

  • John||

    Because if we import goods that are ore likely bought by the rich then the effects won't hit the poor. Or if the reverse is true, it will really hit them.

  • Agammamon||

    John, why should the non-poor consumers be hurt *at all* to protect a limited class of producers?

  • John||

    Because the long term effects of structural unemployment are too bad to ignore. I used to be on the other side of this issue. The way it is supposed to work is those people get new jobs at lower wages and enjoy the benefits of cheap goods. That is not how it's working. They ar not getting new jobs at all. And that is bad and I and everyone else who assumed they would were wrong If the price of subsidized oversees goods is screwing millions of people out of their jobs and sticking them on the dole for life, I am not sure it is worth it. And I say that as someone who has always thought the opposite.

  • Agammamon||

    What evidence have you that there would *be any* long-term structural unemployment? Do you honestly think that, absent government intervention, that people couldn't find some sort of work at all?

    They're not getting new jobs at all because a) you've got 99 months of unemployment benefits - no hurry mate - and b) the way welfare is structured you have to be ready to make a fairly large jump in employment income to bridge the gap at the point where you make enough to lose your benefits.

  • Joe Blowski||

    no one gets 99 months of unemployment. that's absurd, though it would be a good idea. they get 6 months.

  • kbolino||

    It's 99 weeks, not months, which is just under 2 years. The "6 months" (= 26 weeks) is what most states require your employer to pay for. The "extension" of unemployment payments comes from

    It's a fucking terrible idea. Already at 6 months, your chances of re-entering the workforce at your previous salary are pretty slim. At 99 months, you'd be about as valuable to the average employer as someone who spent that time in jail.

  • kbolino||

    The "extension" of unemployment payments comes from the state and Federal governments' general funds.

  • sarcasmic||

    Talk about missing the point (as usual). Poor people spend a larger percentage of their money on consumer goods. Raising the price of imported consumer goods through tariffs disproportionately affects poor people. As in tariffs are regressive taxes on the poor.

    I'm sure you understand how tobacco taxes are regressive. Well, it's the same deal with taxing Chinese and Mexican imports.

  • VG Zaytsev||

    That's not actually true. Poor people spend most of their money on essentials like housing, food and clothing. The effects of higher tariffs might filter down to effect them, the latter two won't.

  • sarcasmic||

    Most clothing is imported. Lots of food is imported. What immediately comes to mind is that even up here in Maine, I see tomatoes at the grocery store that are from Mexico. Often they're cheaper than the ones grown in hothouses upstate. Homes are filled with stuff, much of which is imported. Raising tariffs on imported goods will raise the price of all of those things, and the poor will be least able to absorb it.

  • sarcasmic||

    Another thought. Most car parts are imported. Tariffs will make it more expensive to fix a car, and poor people drive older cars that need to be fixed more often.

    Making stuff more expensive doesn't help the people who have to buy the stuff.

  • Joe Blowski||

    but poor people spend all their money to survive. in this way, sales taxes tax a great amount of poor people's money, while people who only spend a part of their money are only sales taxed on that comparatively smaller part of their wealth or income.

  • Joe Blowski||

    but poor people spend all their money to survive. in this way, sales taxes tax a great amount of poor people's money, while people who only spend a part of their money are only sales taxed on that comparatively smaller part of their wealth or income.

  • kbolino||

    But poor people also consume goods and services provided (under our current system) by the government like roads, schools, utilities, etc. The fact that they spend the vast majority of their income on survival (a definition which makes for very few genuinely poor individuals in this country) doesn't necessarily have any bearing on the tax calculus.

  • Emmerson Biggins||

    Thanks for a non-culture war based criticism of Trump. I appreciate it.

  • Cloudbuster||

    You have a trade deficit with your local grocery store, but you're not getting screwed over by them (well, maybe on that overpriced Greek yogurt).

    It seems like I've heard this analogy a couple times recently. I wonder who started it? The problem isn't necessarily that it's wrong, but that the parallels in the situation are so tenuous that you can't really use it beyond the sound bite.

    Analogies are supposed to simplify complex topics, but this one goes way too far, because there are dimensions to international trade that simply aren't represented by my relationship with my grocery store.

    It's not cheap goods that screws me over. It's issues related to the production of those cheap goods, and monetary policy.

    I don't want to try to extend this analogy very much -- as I said, it's very in-apt -- but imagine if the grocery store implemented tariffs and a currency exchange rate unfavorable to me, so I could buy groceries cheaply, but when I tried to wholesale the apples from my orchard to the grocery store, to make money to buy my groceries, I was priced out of the market. And they routinely raided my orchard (intellectual property, drug patents, etc.) with impunity.

  • John||

    The problem with that analogy is that your local grocery store isn't the only transaction you make. You run a trade deficit with the store. But you also run a surplus with your employer. If the surplus you run with your employer doesn't cover the deficit you run with your grocery store and landlord and other places, you go broke.

    In an old school gold based currency, trade deficits would not be an issue. They would not last, Eventually we would run out of money to buy things, have a recession and the deficit would turn into a surplus and everything would balance out. We don't do that anymore. We have fiat currencies and we can print and borrow for a very long time.,

    As a result, trade deficits are a problem because they never solve themselves. Those deficits are no different than the budget deficit. We are just printing money and borrowing to pay for them. And that if it continues long enough will not end well.

  • Brochettaward||

    Your analogy (and John's) collectivizes and views trade as if it actually takes place between countries where as in reality in it is taking place between individual parties that agree the trade is mutually beneficial.

    In an old school gold based currency, trade deficits would not be an issue.

    This is why Japan is now the world's greatest econom...oh, wait.

  • John||

    Japan doesn't have a gold standard. And Japan for years ran a trade surplus and ended paying an enormous price for it as it warped their economy and caused it to over invest in export industries at the cost of its domestic consumers.

    For claiming to love the free market, you guys sure don't know much about how it works.

  • Brochettaward||

    Your argument was that a trade deficit siphoned off dollars and was only manageable because of fiat currencies. In your argument, we'd run out of money. You didn't say Japan could only maintain a surplus because of a fiat currency. So you made up a new argument on the fly. Japan has the dollars. Why would they go broke?

    What happened to the dollars the Japanese had? Where did they ultimately end up?

  • John||

    In your argument, we'd run out of money.

    No. My argument says we haven't because we have printed it and borrowed it. My argument is that won't go on forever and at some point we are going to face an enormous reckoning if we don't do something to bring trade back more in balance.

  • Brochettaward||

    Holy shit. Same thing you tried above. You focus in on one sentence devoid of context as if I just didn't understand your brilliance. No, the point is taken. Our fiat currency allows us to maintain a trade deficit.

    What the fuck does Japan's fiat currency have to do with a big surplus? Your argument doesn't apply to Japan in that scenario, but you applied it to Japan regardless in your response. So how about you honestly answer the questions raised?

  • John||

    Their fiat currency is what allowed them to run a surplus for so long and also warp their economy to emphasize exports over domestic consumption. If they had not had a fiat currency, they could not have doen that.

    I can't teach you macro economics, especially if you don't want to learn, which you don't seem to be interested in doing. You have not understood a single thing I have said and I don't know how to put it in any simpler terms than I have.

  • Brochettaward||

    You didn't make that argument. You have at no point in time explained how a fiat currency enables a country to run a surplus. You argued a fiat currency allows for a deficit which is itself questionable. But nowhere did you touch on surpluses. You are taking a mercantilist position. Why the hell does Japan need a fiat currency to maintain a surplus when it is gaining in dollars? If those dollars were backed by gold, all the better.

    You have no point.

  • paranoid android||

    Holy shit. Same thing you tried above. You focus in on one sentence devoid of context as if I just didn't understand your brilliance.

    If it's any consolation, you shouldn't take it personally, as this is the only way he knows how to communicate with people.

  • Cloudbuster||

    As I said, the grocery store analogy is inapt, and encourages collectivizing. I'm happy to get away from that.

    Free trade between mutually consenting individuals is the goal. But be wary of things peddled by governments as "free trade" agreements. Government is notorious for slapping names on things that mean pretty much the opposite of what they do. If government is inserting itself in the process, with treaties and deals, you can pretty much assure that the result will not be "free" anything. But, by any definition, the trade we have with China as the status quo is *not* free trade, so no use pretending that Trump's promises to bring China to the negotiating table disrupting some mythical free trade arrangement. He hasn't even promised tariffs. He's threatened to use them as a negotiating tool, which is a completely legitimate strategy, in my opinion.

  • Wizard with a Woodchipper||

    Related Study: HSBC: Protectionism is costing the world nearly $500 billion and 9 million jobs a year

    http://www.businessinsider.com.....ade-2016-5

  • Wizard with a Woodchipper||

    So, can someone point to positive evidence that protectionism actually creates wealth?

  • Hugh Akston||

    Protectionism isn't about creating wealth. It's about protecting squeaky wheels in the status quo from the forces of creative destruction.

  • Wizard with a Woodchipper||

    bingo.

  • John||

    Then how did the US create so much wealth in the late 19th Century while having an economy that was extremely protectionist?

    And please show your work in your answer.

  • Wizard with a Woodchipper||

    Please provide a citation for your notion that an "extremely protectionist" U.S. economy in the 19th century actually created wealth.

  • Hugh Akston||

    Feeding the dog table scraps only encourages it to jump up and shit in your lap.

  • John||

    You seem awfully quiet Hugh. Does actual knowledge as opposed to your profound ignorance scare you?

  • John||

    After the Civil War, the United States maintained high tariffs to protect domestic manufacturers from foreign competition. Tariff advocates claimed that high import duties helped to expand industrial employment and keep wages high, while also aiding farmers by creating a steady demand in the home market for the food and raw materials that they produced. Tariff critics charged that those import duties raised the cost of living for consumers and harmed agricultural producers by effectively taxing their exports, thus redistributing income from consumers and farmers to big businesses in the North.

  • John||

    One approach to examining the magnitude of protection given to import-competing producers and the costs imposed on export-oriented producers is to focus on changes in the domestic prices of traded goods relative to non-traded goods.(9) Because the tariff also increased the prices of non-traded goods, the degree of protection was much less than indicated by nominal rates of protection; my results suggest that the 30 percent average tariff on imports yielded just a 15 percent implicit subsidy to import-competing producers while effectively taxing exporters at a rate of 11 percent. The paper also indicates that the tariff policy redistributed large amounts of income (about 9 percent of GDP) across groups, although the impact on consumers was roughly neutral because they devoted a sizeable share of their expenditures to exportable goods. These findings may explain why import-competing producers pressed for even greater protection in the face of already high tariffs and why consumers (as voters) did not strongly oppose the policy.

    http://www.nber.org/reporter/summer06/irwin.html

  • John||

    Did you idiots ever take history? Do you know anything? Seriously., High profoundly ignorant, but I didn't think even you guys were this stupid.

  • Wizard with a Woodchipper||

    The following is a paragraph extracted from the link you provided. The author asks and then answers the question I posed to you. Notice, John, what he actually concludes.

    "Were high import tariffs somehow related to the strong U.S. economic growth during the late nineteenth century? One paper investigates the multiple channels by which tariffs could have promoted growth during this period.(12) I found that 1) late nineteenth century growth hinged more on population expansion and capital accumulation than on productivity growth; 2) tariffs may have discouraged capital accumulation by raising the price of imported capital goods; and 3) productivity growth was most rapid in non-traded sectors (such as utilities and services) whose performance was not directly related to the tariff.(13)"

  • John||

    I didn't say it was because of the tariffs I said it was with them. That puts lie to the claim that tariffs will destroy your economy.

    And I thought everyone knew the us was protectionist in the 19th century.

  • Agammamon||

    Its not enough to show that tariffs will not destroy an economy - if we're going to use them then you need to show that there's a benefit to the *consumer* to do so.

    Not just a benefit to a selected class of producer.

  • John||

    Sure it is. At least here. The harms of tariffs are way overblown. That is my point.

  • Agammamon||

    But there are still harms - so what are the benefits? So far I see no benefits at all.

  • Wizard with a Woodchipper||

    "I didn't say it was because of the tariffs I said it was with them."

    Here's what I asked and what you were answering with your block quotes:

    "Please provide a citation for your notion that an "extremely protectionist" U.S. economy in the 19th century actually created wealth."

    Now you're just moving the goal post.

  • VG Zaytsev||

    Countries that run trade surpluses accumulate capital - that is a universal historic truth that is mostly ignored by all sides in debates like this.

  • Pay up, Palin's Buttplug!||

    Yeah, there was a massive depression in the 19th century and along with several panics.

    The high tariffs benefited certain groups while hurt others.

    Just like US sugar policy — it benefits US sugar producers who sell sugar at twice the world market price. It hurts US sugar users, like candy-makers who moved to Canada to pay world market prices for sugar, and home consumers who must suffer the high prices. It benefits corn producers who sell HFCS at an artificially competitive price.

  • John||

    Sure there were. Tariffs don't get you out of the business cycle. Depressions happen. They just don't last unless FDR is President

  • Wizard with a Woodchipper||

    ...which were exacerbated by the Smoot-Hawley Tariff Act, pushed by a Republican president Herbert Hoover, who like Trump was a businessman and promoted centralized government and protectionism.

    http://capitalism.org/free-tra.....ariff-act/

    "As other countries placed tariffs on American exports in retaliation, these tariffs actually led to the reduction of American exports and thus jobs:

    'U.S. imports from Europe declined from a 1929 high of $1334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2341 million in 1929 to $784 million in 1932. Overall, world trade declined by 66% between 1929 and 1934. [US Dept of State]

    "With the reduction of American exports came also the destruction of American jobs, as unemployment levels which were 6.3% (June 1930) jumped to 11.6% a few months later (November 1930). As farmers were unable to pay back their loans to banks, their loan defaults led to increasing bank crashes, particularly in the West and Mid-West.

  • John||

    See the research done at UCLa that says the economy would have recovered and it was the new deal that prevented it from doing so. Yes smoot hawley contributed to the initial down turn but the economy would have adjusted and recovered had FDR not showed up.

  • Joe Blowski||

    is that why the recovery started with the implementation of the new deal? and with the new deal, the economy grew at a faster pace than it collapsed after 1929? and that the 'roosevelt' recession of 1937 happened as a result of sharply curtailing spending as a response to the size of the economy reaching its pre-depression levels? and that the US economy grew faster than any world economy after 1933, bringing the world out of the depression, just as it dragged the world into the depression? oh, wait--amity shales wrote about that anecdote about that guy in the '30s who opposed the jew deal.

  • kbolino||

    If you subtract out government spending, then the economy did not recover to its pre-1929 levels until after WW2.

  • Joe Blowski||

    well, it was in the early twentieth century that the US emerged as the most powerful economy in the world, it was also a time, especially after 1896, with protective tariffs at their high point., not suggesting that one was responsible for the other, but those two patterns were definitely happening at the same time.

  • kbolino||

    The tariffs were not onerous at the time because the U.S. was rapidly industrializing. We were literally out-producing the cost of the tariffs. That is not going to happen again, not the least because modern taxes, regulations, and welfare payments make it nearly impossible.

  • Bubba Jones||

    Vast natural resources

  • John||

    WE still have vast natural resources. And lots of countries have those.

    Try again.

  • Agammamon||

    How about 'despite' not 'because of'.

  • Pay up, Palin's Buttplug!||

    Don't forget the part about using the surplus money to build up a military to invade countries for their wealth and resources.

  • See Double You||

    It awards economic rent to favored producers.

  • John||

    Sure. The positive effect is that you protect your markets and keep money from leaving your economy. If you run a trade surplus you producing more than you are consuming and accumulating wealth. Japan built their entire economy doing ti. The US built its economy in the late 19th Century with protectionism.

    There certainly are downsides and risks to it. If you do it to the extreme, you fuck your consumers so badly that you never develop a internal; market and you end up too dependent on exports. If you do it too much or on things that your economy can't produce or isn't very good at replacing, you can create cripple your competitiveness.

  • See Double You||

    The positive effect is that you protect your markets

    From what?

    If you run a trade surplus you producing more than you are consuming and accumulating wealth.

    The reverse would be that if you are consuming more than you are producing you are losing wealth, which is not true.

    If the U.S. trade deficit is such a bad thing, something that could be done instead of unleashing the old protectionist tools would be to undo decades of government policy - both monetary and fiscal - that has favored credit over saving.

  • John||

    The reverse would be that if you are consuming more than you are producing you are losing wealth, which is not true.

    That is true. National accounts have to balance out. Your trade deficit or surplus in goods always equals your inflow of capital or vice versa. When your economy buys more than it produces, it is necessarily borrowing the difference in the form of foreign investment, which is a fancy term for lending.

  • sarcasmic||

    There are no "national accounts." Does your neighbors' spending habits affect your bank account? Didn't think so.

  • sarcasmic||

    Capital is not money. If you give people money and they give you stuff, are you poorer? Would you be better off if you sold are your stuff and walked around with a suitcase full of cash?

  • sarcasmic||

    this was suppose to be a reply to VG Zaytsev|5.12.16 @ 8:49PM

  • VG Zaytsev||

    The difference can come from depleting your capital,stock, which is the case with the us.

  • Joe Blowski||

    exports are not the bulk of the american economy. the domestic economy drives the overall economy. plus the strong dollar makes exports expensive for outsiders and imports cheaper for americans.

  • VG Zaytsev||

    The history of the US in the 19th century. Postwar Japan and China over the last three decades.

  • Adans smith||

    Don't worry about a trade war.Once the whole grid runs on 'renewable power' and all foods have to be locally sourced due to the lack of heavy transport 'trade' will mean buying from your neighbors garden.

  • Brochettaward||

    We'd be so self-sufficient!

  • Adans smith||

    And Trump ,who has his ties made in China,is an ass,raising prices mean nothing to him,and Bernie and Hillary are on the anti trade wagon too.

  • AlmightyJB||

    Talking bass and 3x canary yellow stretch pants hardest hit.

  • mfckr||

    Can we at least stop calling it free trade?

  • Hugh Akston||

    What would you prefer to call it?

  • John||

    International cronyism? Or how about unilateral ass fucking?

    Those are two ideas. The greatest free trade agreement of the last 40 years was the creation of the EU. How did that work out for freedom?

  • Brochettaward||

    The EU is bad for freedom, but not because of free trade. It confuses the point.

    I do question calling thousand page long trade agreements free.

  • John||

    No. The point is that these "free trade agreements" come with all of this baggage that overall makes them bad for freedom.

  • Calidissident||

    The EU is a (limited) political union that includes a free trade agreement. Equating that with any and every free trade agreement is stupid.

  • John||

    And the TPP and NAFTA and GATT are the same in that they create supra national bureaucracies that do all kinds of nasty things against freedom.

  • Calidissident||

    None of those things are the same as the EU. Not even remotely close either.

  • John||

    None of them are as bad as the EU. But that doesn't they are good.

  • See Double You||

    I somewhat agree with you that many so-called free trade deals are far from real free trade. But the solution shouldn't be more economic protectionism.

  • John||

    Unless you make new agreements, your choices are live with them or walk away.

  • mfckr||

    Or one could just have actual free trade.

    1000+ page agreements aren't necessary for any two parities to exchange goods w/ one another.

  • Brochettaward||

    You mistake cause for effect. The EU wasn't about free trade. It was just a corollary of it.

    Meanwhile, you claim to want greater freedom while supporting or shrugging off a trade war. There is nothing about high tariffs that furthers freedom. You would restrict the arrangements that businesses can make across borders. Whose freedom is furthered? If businesses don't like dealing with China's protectionism, they can decide not to do business with the Chinese.

    This is sophistry. Plain and simple. Trade agreements are bad for freedom, but tariffs are somehow not. Your argument on one side is that it involves government and its stipulations so it isn't advancing freedom. On the other you want more government intervention.

  • John||

    You are the one committing sophistry. I never said trade agreements are bad for freedom. I said the trade agreements we are making are bad for freedom because they are not just trade agreements. They are agreements about trade that restrict our freedom in ways much worse than the benefits the trade aspects increase it.

  • Brochettaward||

    Uh, no. I acknowledged why you consider them bad for freedom:
    "Your argument on one side is that it involves government and its stipulations so it isn't advancing freedom"

    You still didn't explain how tariffs are then good for freedom in any way. Not having trade agreements like NAFTA or the TPP is one thing. You cannot simultaneously argue that they are bad for freedom, though, and then turn around and argue/be ok with tariffs. Because regardless of economic impact, they are most definitely not advancing freedom in anyway.

  • John||

    I didn't say tariffs were good for freedom. I said they were not necessarily bad or catastrophic for the economy. If your only value is increasing freedom, then yes, tariffs are bad. I never said otherwise.

  • Brochettaward||

    Oh. But trade agreements are bad for freedom. How? You don't really get specific. They just are. I'd like to see your magical abacus where you calculate the net cost of freedom gained versus freedom lost since you throw this argument around every time you don't like a policy (gay marriage). At least there you can talk numbers as gays are a minority.

    Meanwhile, now you want to claim you don't really support tariffs. You're just saying maybe they aren't all that bad if we exclude freedom from the equation. I mean, you haven't actually shown they are good for the economy, either. And you in no way see this as engaging in sophistry. How about you own your bullshit arguments?

  • John||

    But trade agreements are bad for freedom. How?

    Free trade agreements are not bad for freedom in the abstract. The free trade agreements that we sign are bad for freedom because they are not just free trade agreements. They also come with all sorts of other things that restrict freedom.

    I have said that like four times. Why do you keep ignoring it?

  • Brochettaward||

    Yea, we all get your point, John. I was asking for specific 'other things' that restrict freedom. Not more willful density. I was also asking how one adds up net freedoms gained versus net freedoms lost. That is merely your own individual preference to begin with. Not an actual fact.

    You want to continue to pretend your point is being misconstrued to avoid having to actually defend your position.

  • sarcasmic||

    The free trade agreements that we sign are bad for freedom because they are not just free trade agreements. They also come with all sorts of other things that restrict freedom.

    True. These agreements pick winners and losers by carving out exceptions for cronies while leaving the less politically connected in the lurch. Better to just, I dunno, allow people to trade with each other. Nations don't trade. People do. Any argument against free trade between Americans and Chinese is an argument against trade between Californians and Mainers. If you see the absurdity of restricting trade between states, then you are theoretically capable of seeing the absurdity of restricting trade between countries.

    Theoretically.

  • Bill Dalasio||

    John you really are being a disingenuous turd here. I can see where people have called you Red Tony.

    The trade agreements we have are less optimal for freedom than genuine free trade.

    Ergo we should go to a regime where people have to pay the government for the privilege of buying something from a foreigner.

  • mfckr||

    What would you prefer to call it?

    Trying to think of a more concise name. Neo-mercantilism initially sprung to mind, but that wouldn't be right.

    Basically, what we nominally refer to as a 'free trade' treaty = a govt-brokered transnational agreement w/ complex inter-regulatory harmonizing rules, plus various perks & protections for connected cronies.

    This briefly explains the actual situation: https://is.gd/kPIgOW

  • Hugh Akston||

    I agree that free trade agreements are not that thing, but the lower tariffs and easier border movement are at least a step in the right direction of free-er trade. There's definitely some cronyist poop mixed in with the pineapple juice with all of them, but being a libertarian means accepting marginal wins where you can get them.

  • mfckr||

    True.

    Unfortunately, free trade gets blamed for negative side effects of govt-managed trade, often leading to appeals for protectionism.

  • John||

    Tell us more about how the US wasn't protectionist in the late 19th century Hugh.

  • Agammamon||

    They're a step in the right direction the same way that gay marriage is a step in the direction of getting the state out of it entirely.

  • John||

    I don't see how you can say they are a step in any right direction

  • Diane Reynolds (Paul.)||

    He thinks trade deficits between the United States and other countries mean we're somehow getting screwed over and not the actual reality that we're buying goods that we want more cheaply.

    Can you really blame them? I mean, conservative enclaves such as NPR have been giving the hairy-eyeball to "the trade deficit" for years-- hell, as far back as a brother can remember.

  • Diane Reynolds (Paul.)||

    Well, it's a troubling indicator of some possible turbulence ahead, you might say. As you mentioned, this trade gap is a lot wider than many experts were anticipating, and some economists are already saying today that it might cause them to rethink their estimates of the country's economic growth in the first quarter of the year, and to have to adjust them downward, although it's still a bitter way to know just how much of an overall effect that this is going to have.

    There is something of a silver lining to this gray cloud today.

    2006: http://www.npr.org/templates/s.....Id=5254023

    Growing Skepticism Of Free Trade

    These members reflect a growing skepticism in the general public about whether free trade agreements really are good for the U.S. economy.

    It is true that our exports will increase. The problem is our imports from Korea are going to increase a lot more.
    Lori Wallach, Public Citizen

    "I've seen first hand the negative effects that trade agreements have had on our manufacturing sector and this one is estimated to displace 159,000 jobs and increase our trade deficit with Korea by $16.7 billion," says Rep. Mark Critz, a Democrat from Pennsylvania.
  • Brochettaward||

    There are so many economic narratives from the Bush years the left completely swept under the rug for Obama. Burger flipping jobs was always my favorite. Every damn month those cunts were harping on trade deficits, though, it seemed like. Or at least with every quarterly report.

  • Diane Reynolds (Paul.)||

    Oh yes. In the early 2000s they had an entire trade deficit segment where they're report how much the numbers had bloomed, then they'd collectively wring hands about it.

  • John||

    Where does that money to buy those things come from? We are printing and borrowing it. The accounts have to balance.

  • kbolino||

    The accounts have to balance.

    Not as long as the Federal Reserve exists. Its entire purpose is to unbalance the accounts in ways that would be illegal for private entities.

  • RBS||

  • straffinrun||

    She didn't mean for it to happen, so...

  • Diane Reynolds (Paul.)||

    To say that I didn't mean for this to happen doesn't begin to express the disappointment I felt in myself when it did. I had been married (technically, I still am, because divorce is expensive and living separately is unthinkably so) for 11 years, with two school-age children together and one I brought from a previous relationship

    *face fucking palm*

  • John||

    What a fucking whore.

  • Diane Reynolds (Paul.)||

    I don't care who she sleeps with, but woman up and get a divorce. Or is it that she knows that her new Mr. "Man bun" with his messenger bag and creative gig isn't going to cover her at the lifestyle level to which she's accustomed?

  • John||

    I don't care how many men women sleep with. But when you end up having kids by multiple men and leaving a guy who is willing to raise them for some fucking manbun, you are a selfish whore. No one made her have those kids. God Fucking forbid she take their interests into account rather than her own.

  • Diane Reynolds (Paul.)||

    Oh she's definitely selfish. And she remains married purely for the money, by her own explicit admission.

  • Trouser-Pod (The blowhard)||

    I am not asking for — or expecting — absolution.

    Horseshit. You didn't make this story public for shits and giggles. You want a positive response from strangers, assuaging your bad feelings.

    I would throw out "ego-maniac" as a possibility, but you recognize shame as a product. Or, write like you do.

  • Agammamon||

    Yeah, divorce *is* expensive - if you're trying to take more than your share of the marital assets.

    Otherwise its usually around three hundred bucks.

  • Diane Reynolds (Paul.)||

    Define "your share".

  • Agammamon||

    Well, its probably not 90% of everything and the fucking dog too.

  • Diane Reynolds (Paul.)||

    After he abandoned her in a sexual desert, feeling unrequited? I think she's entitled to a little cathartic life-affirming behavior.

  • Aloysious||

    And now he lives with my husband, my children, and me.

    Why 'the husband' is putting up with this shit is beyond me.

  • Diane Reynolds (Paul.)||

    Why 'the husband' is putting up with this shit is beyond me.

    My only guess is it's a Mexican Standoff. She's afraid to divorce because she might not get to fleece him due to her current life choices, he's afraid to divorce her because he's afraid she might get to fleece him regardless of her current life choices.

  • Cloudbuster||

    And now he lives with my husband, my children, and me.

    WTF? No way I would live with the guy who was fucking my wife.

  • Cloudbuster||

    Yes, there was the darkest moment of all, which came about three weeks in: my husband came home with the specific intention of surprising us having sex during the day, and even picked the lock to fling the door open to the master bedroom. My sweet companion fled the scene, and I expected I would never see him again. Amazingly, my husband felt bad enough that he called my lover a few minutes later and apologized for freaking out, and hoped he hadn't driven him out of my life forever because he was clearly making me happy.

    Hubby is a world-class loser and Wifey is a whore. God have mercy on the kids.

  • John||

    That is the most pathetic thing I have ever heard. It would be one thing he were just a swinger who got off on other men doing his wife or he didn't want to break up his kids home and told her do it but be discreet. I wouldn't do eithe myself but at least I could understand why someone might. But let the fucker move in? And some fucking hipster dirtbag with a man bun? That makes me angry just to think about it. Snap the fuck out of it and stop making me embarrassed to be a man.

  • ant1sthenes||

    Man is obviously a DC Republican.

  • ||

    Check this high school baseball ump out:

    http://247sports.com/Article/1.....d-45305853

    Pitiful.

  • Diane Reynolds (Paul.)||

    What am I missing here, I see a video about college recruiting for football.

  • ||

    Donald Trump's trade wars? Wait, did I sleep too long? Is he president already?

  • Diane Reynolds (Paul.)||

  • ||

    Check this supporter of single payer out:

    "RageOfAchilles chateau margaux • 3 days ago

    Brilliant response. I love how overlooked single payer health care actually saves 15 billion in paperwork alone...."

    I would LOVE to hear the citation for that because Canada's single payer is intensely cost-centric putting a massive strain on costs. The system is BUT about paper work. What the fuck is this moron talking about?

    Also notice how adding $18 trillion is met with a shrug and more indignant responses:

    http://n.pr/1TIIIzM

  • ||

    Moron is the key word.

  • kbolino||

    You could save more than $15 billion "in paperwork alone" by repealing the PPACA. Regulatory red tape creates paperwork.

    The only way "single-payer" reduces paperwork is by repealing the onerous regulations that create the paperwork. If you buy into the narrative behind regulation, that basically means that "single-payer" saves money by endangering the public.

  • ||

    Sure it's already been posted, but I just got back from the office. Leftist are falling like dominoes all over the world and we can't wait to go down that road.

    Brazil Senate votes to suspend Dilma from presidency, put on trial

  • Diane Reynolds (Paul.)||

    Because we'll get it right this time.

  • straffinrun||

    Here's some good news. In 2008, my sisters supported Obama and my brothers went for McCain. I would toss this weirdo Ron Paul into FB discussions and the only thing they all would agree on is that he was nuts. By 2012, one brother had started turning. He still voted Romney, but did so only out of hatred for Obama.
    This time around, that brother is fully behind libertarian principles. He actually asked me last week, "Why doesn't everyone accept this?". I could easily have seen him going the Alt right route if he hadn't gotten some exposure to Cato, Rothbard and even Reason.
    One sibling at a time, my friends.

  • ||

    Is he going to vote for the LP candidate? I think one of the big things is that there are a lot more libertarians than that 1% of the vote would have some believe. But there is this: 'Person (L) can't win, and If I don't vote for team (red/blue) that's like a vote for the other person! And this is the most important election ever! I think it just takes a lot of resolve to finally admit that team purple is the problem and that it's ok to waste your vote. What if there's 15% of the voting public that are libertarian and every one of those people would vote LP. We would actually have a lot of control over elections and they would start listening to us. As long as the LP candidate gets 1% of the vote, we'll be ignored. That's what it's going to take, every libertarian or libertarian leaning person just saying fuck it and voting LP.

  • straffinrun||

    As we've seen on these boards, even libertarians make cases for voting the lesser of two evils. I think he'll vote LP for the first time. He's actually trying to get me to vote LP because I'm starting to fall down the AnCap hole. If he'll vote LP, I'll swallow my objections to voting at all and do so as well.

  • ||

    I'm voting LP, so I'm doing my part, again. If Rand would have got the nomination, I'd vote GOP. I mean I'm ok voting GOP when the guy is a libertarian.

  • straffinrun||

    When you here about things like "intersectionality", you realize how self defeating the One True Scotsman garbage becomes. The enemies of liberty have no problem accepting people with contradictory beliefs in their movement.

  • straffinrun||

    *hear.

  • ||

    Thanks for sharing that libertarian moment.

    Maybe Nick will write an expose.

  • straffinrun||

    Winston has a sad.

  • Trouser-Pod (The blowhard)||

    Do you ever shut the hell up?

    Check out www.rotinhellspambots.net Make Reason H&R great again!!!

  • Diane Reynolds (Paul.)||

    Should we build a firewall?

  • Agammamon||

    It just got 10 microseconds taller.

  • Pompey||

    I find it more effective to go all Old Man Yelling At Sky mode and call the spamming a liar.

  • __Warren__||

    Vote Trump for A New Start.

  • Len Bias||

    Doesn't Sanders also want to cut off trade with China and Mexico? His rhetoric is very similar to Trumps in his regard.

  • John||

    Yes he does. And he is even more against immigration than Trump. Yet reason never mentions that much less sits their pants over it like they do over Trump.

  • Grand Moff Serious Man||

    Yet reason never mentions that much less sits their pants over it like they do over Trump.

    Never?

  • Grand Moff Serious Man||

    You're absolutely right John. Reason, never, ever calls out Bernie for being an economic retard.

    They just have to pick on poor widdle Trump and his oppressed followers.

  • Diane Reynolds (Paul.)||

    Ok, name TWO articles where they call Bernie out!

  • ||

    I would have gone with 'poor widdle Twump'.

    But that's. Just. Me.

  • Grand Moff Serious Man||

    You're absolutely right John. Reason, never, ever calls out Bernie for being an economic retard.

    They just have to pick on poor widdle Trump and his oppressed followers.

  • John||

    Do you need a hug Geoff? And yes they occasionally mention trade but never that I have seen his stance on immigration.

    I am sure it hurt them to have to do it. So there is that

  • paranoid android||

    Found this in about two second of searching, but I know you won't let anything interrupt your narrative about how everyone else but you is obsessed with maintaining a false narrative.

  • kbolino||

    The difference, I would think, is that Bernie Sanders is not going to win the Democratic nomination and everyone with half a brain knew that months ago. Even without the superdelegates, Clinton is already ahead. Factor in the superdelegates, and the only way she loses the nomination is by act of God and/or DoJ.

    Of course, Reason is suffering from Trump derangement syndrome like the rest of the media, but that has nothing to do with Sanders.

  • ||

    Why is Reason posting articles about the poor?

    /dons monocle.

    Everyone knows libertarians hate the poor.

    Instead watch Gavin make fun of Neil DeGrasse-Tyson:

    https://www.youtube.com/watch?v=EsA3rZuZQo4

  • GILMORE™||

    Has anyone already noted on the profound stupidity of treating Trump rhetoric as though he's presented policy-white-papers with a 100% chance of actually being implemented?

    imagine we applied the same presumption to Hillary's comments re: Putin or Syria? or maybe her various comments on "putting coal out of business" versus "protecting coal miners"?

    Of course it would look silly then. But for some reason, treating Trumps posturing as de-facto Future-Reality is seen as responsible and mature and thoughtful rather than obtuse and insane.

  • Diane Reynolds (Paul.)||

    Has anyone already noted on the profound stupidity of treating Trump rhetoric as though he's presented policy-white-papers with a 100% chance of actually being implemented?

    You already forgot the Obama/Romney election of '12, haven't you? Remember all the insane-in-the-membrane stuff Romney was going to do in the first 100 days?

  • GILMORE™||

    Remember all the insane-in-the-membrane stuff Romney was going to do in the first 100 days?

    I forgot Romney faster than 10th grade Latin.

  • Diane Reynolds (Paul.)||

  • kbolino||

    Not to give him too much credence, but I think John (the commenter) was right about Andrew Sullivan. His politics have been completely colored by Bush backing the "Federal Marriage Amendment" in 2004.

  • Crusty Juggler||

    Russian Insider Says State-Run Doping Fueled Olympic Gold

    Grigory Rodchenkov, who ran the laboratory that handled testing for thousands of Olympians, said he developed a three-drug cocktail of banned substances that he mixed with liquor and provided to dozens of Russian athletes, helping to facilitate one of the most elaborate — and successful — doping ploys in sports history.

    Shocking!

  • Crusty Juggler||

    In a dark-of-night operation, Russian antidoping experts and members of the intelligence service surreptitiously replaced urine samples tainted by performance-enhancing drugs with clean urine collected months earlier, somehow breaking into the supposedly tamper-proof bottles that are the standard at international competitions, Dr. Rodchenkov said. For hours each night, they worked in a shadow laboratory lit by a single lamp, passing bottles of urine through a hand-size hole in the wall, to be ready for testing the next day, he said.

    What's Russian for "send it through the glory hole?"

  • Diane Reynolds (Paul.)||

    In Soviet Russia, Glory Holes You!

  • Crusty Juggler||

    Dr. Rodchenkov said that some of his athletes would at times take drugs he had not approved, making them vulnerable to discovery. “All athletes are like small children,” he said. “They’ll put anything you give them into their mouths.”

    A case in point, he said, was Elena Lashmanova, a gold medalist in racewalking at the 2012 London Games. She had tested positive for banned substances while international observers were scrutinizing his lab, and to cover up her results would have endangered the entire operation, he said.

    Racewalking?

  • Diane Reynolds (Paul.)||

    Yes, watch a video and try not to laugh. I dare you.

  • sarcasmic||

    I clicked on the comments expecting a fountain of economic ignorance from our favorite Trumpista. I wasn't disappointed.

  • WhatAboutBob||

    Here's a related article arguing that there is nothing "free" about trade based on capital flows generated from central bank liquidity.

    http://oftwominds.bmobilized.c.....&width=600

  • Geoffro||

    I don't think he's too bothered, unfortunately.

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