At this point, I think saying that our president is insane may be the nicest way of putting it. The latest way of proving this seems to be by giving a voice to people who watched Roger And Me 30 years and have never shut up about it, or the man who directed Roger And Me 30 years ago and never shut up about it, by attempting to implement protectionists in the United States. So I figured we should actually look at some of his cases and talk about why he's obviously wrong.
One of the most common cases Donnie and his supporters have made is that Canada, the country Washington D.C. is currently targeting the hardest, has incredibly high tariffs on some products. What Donald seems to ignore is that many economists consider Canada's policy to be a bad thing. For instance, when IGM asked economists from many different schools of economics if "Adding new or higher import duties on products . . . to encourage producers to make them in the US - would be a good idea" 0% of them said yes. And before anyone mentions it, this includes David Autor, who wrote The China Shock.
Caroline Hoxby, an economist from Stanford, commented that "tariffs would make the average American worse off". This is a statement that is so obvious that it shouldn't take a Stanford economist to explain that. Why do I say that? Well just look at the definition of tariffs.
Tariffs, as defined by the Merriam Webster online dictionary are "a schedule of duties imposed . . . on imported or . . . exported goods". Basically, a tax that increases the cost of goods from a certain country. Now here's the question no tariff supporter is willing to answer, who pays that tax? The answer is, obviously the consumer. And while the average virtuous middle-class liberal may go on about how "I wouldn't mind paying more", he never thinks that some people can't pay more. Those are the people who are hurt the most.
So the President is right when he says Canada has a high tariff rate. But as the old saying goes, if your friend (or in this case, someone you're trying to make an enemy) jumped off a bridge, would you?
So it's been established that protectionism hurts people, that's obvious. However, does free trade help people? The answer is also as obvious, but in this case, it's a yes.
While it's very easy to imagine that free trade only helps the big companies that ship jobs over to China, that's far from the case. What the people who support protectionism never tell you is that said "outsourcing" lowers the price of products and, as such, gives us greater purchasing power.
YouTuber Shane Killian (who I don't agree with on most issues, but has made informative and entertaining content on free trade) calculated that in 1993, one year before the implementation of NAFTA, it would have cost someone over $17,000 to have all of the features present in your average iPhone. And that's ignoring the features that he couldn't calculate because they didn't even exist in any form back in the 1990's. Don't believe me, how many times did you video call someone over the course of that entire decade? Post NAFTA, the iPhone X is so easy to get people can line up around the block, regardless of income, to buy the newest model. This is only because they use so much oversea labor.
Now, some may respond that this will cost the country a large number of jobs. This is true, but putting the economy in a vacuum like this is never a good idea. The fact is, the elimination of these jobs from the United States economy has been nothing but a positive for the average worker for all the reasons listed above. The fact is, the economy will adjust. In fact, it already has adjusted. At least, that's what the Trumpers keep telling me. After all, more jobs left this country in Trump's first year than Obama's last. So the prices of products only go up but that doesn't matter because it will create jobs the economy doesn't need.
So now there's only one thing that the president and his supporters have left to rely on, the old idea of the trade deficit. This is one his supporters, including many this blog has already covered, have left to rely on. For this, all you really need to do is understand what the "trade deficit" is to understand why this doesn't make any sense.
A trade deficit, as defined by Investopedia, is "an economic measure of international trade in which a country's imports exceeds its exports". Basically, a trade deficit is when a country buys more from another country than it gives out. However, what the anti-free trade crowd never tell you is that this number is 100% meaningless.
Let me show you what I mean. Did you know you have a trade deficit with any store you go to? You give them money, but they never give you any money. Do you care? Of course not, they gave you what you bought.
What I'm getting at is, the trade deficit is also a pretty silly argument.
All of this makes one thing perfectly clear, the United States needs free trade to survive and continue to be prosperous.
One of the most common cases Donnie and his supporters have made is that Canada, the country Washington D.C. is currently targeting the hardest, has incredibly high tariffs on some products. What Donald seems to ignore is that many economists consider Canada's policy to be a bad thing. For instance, when IGM asked economists from many different schools of economics if "Adding new or higher import duties on products . . . to encourage producers to make them in the US - would be a good idea" 0% of them said yes. And before anyone mentions it, this includes David Autor, who wrote The China Shock.
Caroline Hoxby, an economist from Stanford, commented that "tariffs would make the average American worse off". This is a statement that is so obvious that it shouldn't take a Stanford economist to explain that. Why do I say that? Well just look at the definition of tariffs.
Tariffs, as defined by the Merriam Webster online dictionary are "a schedule of duties imposed . . . on imported or . . . exported goods". Basically, a tax that increases the cost of goods from a certain country. Now here's the question no tariff supporter is willing to answer, who pays that tax? The answer is, obviously the consumer. And while the average virtuous middle-class liberal may go on about how "I wouldn't mind paying more", he never thinks that some people can't pay more. Those are the people who are hurt the most.
So the President is right when he says Canada has a high tariff rate. But as the old saying goes, if your friend (or in this case, someone you're trying to make an enemy) jumped off a bridge, would you?
So it's been established that protectionism hurts people, that's obvious. However, does free trade help people? The answer is also as obvious, but in this case, it's a yes.
While it's very easy to imagine that free trade only helps the big companies that ship jobs over to China, that's far from the case. What the people who support protectionism never tell you is that said "outsourcing" lowers the price of products and, as such, gives us greater purchasing power.
YouTuber Shane Killian (who I don't agree with on most issues, but has made informative and entertaining content on free trade) calculated that in 1993, one year before the implementation of NAFTA, it would have cost someone over $17,000 to have all of the features present in your average iPhone. And that's ignoring the features that he couldn't calculate because they didn't even exist in any form back in the 1990's. Don't believe me, how many times did you video call someone over the course of that entire decade? Post NAFTA, the iPhone X is so easy to get people can line up around the block, regardless of income, to buy the newest model. This is only because they use so much oversea labor.
Now, some may respond that this will cost the country a large number of jobs. This is true, but putting the economy in a vacuum like this is never a good idea. The fact is, the elimination of these jobs from the United States economy has been nothing but a positive for the average worker for all the reasons listed above. The fact is, the economy will adjust. In fact, it already has adjusted. At least, that's what the Trumpers keep telling me. After all, more jobs left this country in Trump's first year than Obama's last. So the prices of products only go up but that doesn't matter because it will create jobs the economy doesn't need.
So now there's only one thing that the president and his supporters have left to rely on, the old idea of the trade deficit. This is one his supporters, including many this blog has already covered, have left to rely on. For this, all you really need to do is understand what the "trade deficit" is to understand why this doesn't make any sense.
A trade deficit, as defined by Investopedia, is "an economic measure of international trade in which a country's imports exceeds its exports". Basically, a trade deficit is when a country buys more from another country than it gives out. However, what the anti-free trade crowd never tell you is that this number is 100% meaningless.
Let me show you what I mean. Did you know you have a trade deficit with any store you go to? You give them money, but they never give you any money. Do you care? Of course not, they gave you what you bought.
What I'm getting at is, the trade deficit is also a pretty silly argument.
All of this makes one thing perfectly clear, the United States needs free trade to survive and continue to be prosperous.
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