Re: Forbes: "Budget To Nowhere"

On Wed, 6 Feb 2008 12:00:06 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
news:inpjq39hj3gqfob1gkjfsdoe8nmhrlu5nl@xxxxxxxxxx
On Wed, 6 Feb 2008 05:47:20 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message


<snip>


Of course people are always going to try to get the best bang
for the buck. That's what people do, that's what I do, that's what
everybody does.

It's not what the Japanese do.



They don't?

They don't. They have a documented tendency to pay more for Japanese
goods.
Obviously, HUGE price disparities will alter that behavior, but they will
pay a bit more for domestic goods, as will most Asians, for that matter.


That's very socially conscious of the Japanese. They
don't need tariffs if they behave thus consistently. Other
nationalities don't behave that way though, and aren't
about to start. Any that did, wouldn't need tariffs to
protect their home industries, of course. The USA is not
in that situation, as evidenced by the fact that native
industry has largely disappeared. That wasn't much of
an argument you made for your case against tariffs, was it.

The point is that the entire discussion is based around self-inflicted
wounds. If Americans would check the label every now and again, we wouldn't
be having this discussion.



Yes, and the point is they don't do that. Are you going
to be like Lenin and say "This man is no good - we need
a new man!"? It didn't work for Lenin and it won't work
for us. We have to adjust society to work with people
as they are, not the other way around. If Japan is
different, good for Japan. We're not that way, so it does
no good to say the same solution has to work.



You seem to not mind the effect of tariffs, since you
don't object to the Japanese producing the same effect.
You just object to actual tariffs. That really doesn't make
sense.

First of all, tariffs restrict my freedom and yours. I value freedom of
choice.


Then you can't complain about the debt and about the
flight of industry, because we're just reaping what we sowed.




Other than that, tariffs in a global society are just another bubble-causing
gimmick. They restrict competition and supply, which enables domestic
producers to raise their prices, who then have to hire more people at higher
and higher rates (especially since we're entering a period of labor shortage
as the boomers retire), which increases cost of goods sold, forcing product
prices up, and the entire cycle continues up and up.




We didn't have a nine trillion dollar debt when we had
tariffs and when we had our own protected industries,
with our own protected people working in them.





However, think of the impact on the consumer. Since their cost of living
kicks up IN EXCESS of increased wages, they effectively have a loss of
disposable income. Since Americans simply refuse to do without, the net
effect of tariffs would be:

1) Higher product prices
2) Increased employment
3) Increased wages,

BUT

4) Increased use of credit
5) Decreased savings rates



Actually, I hear that savings rates are about the lowest
they've ever been, and irresponsible use of credit is about
the highest it's ever been, even though we have few
tariffs now. What you said doesn't match observable reality.




AND THEN, EVENTUALLY, when they are *forced* to do without because of rising
prices......

6) Demand for goods decreases (but their cost of production remains high),
7) Businesses are forced to cease operations, as they are unable to make a
profit
8) Unemployment increases

Now, all that assumes that there are no retaliatory tariffs enacted on us.
Any sort of tariff will today provoke a response from the WTO, and
retaliatory tariffs would follow. This fact will quickly offset the
positives 1 through 3 above, and accelerate the negatives 6 through 8.


How come we didn't have these problems in 1970 but we
have them now. The apparent reason is that we no longer
produce our own stuff.

The steel tariffs were imposed precipitously, after more than
30 steel companies had gone bankrupt because, without
tariffs, they couldn't compete against cheap imports. It's not
a game of SimCity, in which you can suddenly adjust pressures
and the expected industries will magically pop up on the screen.
Those companies that went out of business had taken a long
time to build, and they'll take a long time to build again. It would
have been better to impose tariffs more gradually, so that we
could still get the foreign steel while we weren't producing
enough of our own, while encouraging a rebirth of our own
steel industry that had been destroyed by lifting tariffs. Despite
the effects of the shock of suddenly re-imposing high tariffs,
though, I would have preferred keeping those tariffs if the only
political alternative was to remove them completely as was
done later. It's better to make a bad start and suffer adjustment
pains than to make no start at all. Worst of all is to make a
move precipitously and then retract it precipitously.
http://en.wikipedia.org/wiki/2002_United_States_steel_tariff




Is your non-objection to the Japanese way
based on the idea that some of them would cheat, and
therefore "free trade" would be implemented to that
extent, but only that extent? That's the only possibility
that even begins to work, but of course it doesn't stand
up to reason any better.

Retaliation is the issue. You might save a few jobs, but at great cost. This
study...

http://economics.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=economics&cdn=money&tm=4&f=00&su=p649.0.147.ip_&tt=2&bt=0&bts=0&zu=http%3A//www.mackinac.org/4107

...showed the net effect of the Bush steel tariffs, for example.



That's very convoluted. Obviously if we can import
spaghetti from Italy rather than making our own at higher
cost, that will make work for the spaghetti packagers in
America. That doesn't mean we're necessarily better off
not making our own spaghetti because it makes more
work for the native spaghetti packagers.

I'm reminded of the arguments that if the French
Aristocracy couldn't afford carriages, that would put the
carriage-makers out of work, thereby proving that it would
be very bad for the economy to eliminate the French
Aristocracy. Well, the French Aristocracy is gone,
nobody misses them, certainly nobody wants them back,
and nobody thinks today they were a good idea, despite
the dislocation of the carriage-makers after the Aristocracy
was chopped. Local effects do not determine the big
picture. The big picture determines the big picture.




There are also many situations where the price difference between domestic
and imported simply doesn't matter. I picked up some very nice casual
stemware at Wal Mart a week ago, made in the USA, a buck a glass. And
there's always a domestic car that's as good of a "deal" as an imported
one,
if you look at price only.


American believe that American cars are pretty crappy
compared to Japanese cars, whether or not one feels that's
true, so those aren't equivalent goods.

Sure they are. There's no question that the Japanese are better at making
their cars more desireable, but if you take the emotions out of it, they're
machines with four wheels designed to get you from point A to point B. Same
purpose.

As to other things,
if native stuff costs no more than imported stuff, why are
imported things being offered for sale and bought in
preference to native stuff? If they aren't, then there's no
problem of course. If they are, then why?

This sort of thing raises issues with me as well. I SUSPECT that a modern,
high tech manufacturing facility can build stuff here at competitive rates
to anywhere in the world. What I THINK has happened in some cases is that
manufacturers came out of the 60's and 70's with manufacturing facilities
that were not modern, meaning that they had to make a choice between (1)
investing 10-50M to be competitive, or (2) just buy the stuff from overseas
and slap a label on it. Now, that's not good PR to say that you simply
didn't want to invest the money in a modern facility employing Americans, so
instead you deny that it's possible to be competitive here to avoid the bad
PR.

Now, by driving the dollar down, you weaken the advantage China has over us
and make our manufactured goods more appealing pricewise, both for export
and for Wal-Mart and the other major retailers, which is probably why I
found that stemware I mentioned. If the weak dollar holds for the
foreseeable future, it should encourage more and more domestically
manufactured goods and associated employment, thus getting us the BENEFITS
of the tariffs without the drawbacks.



I have absolutely no patience whatsoever with any argument
that devaluing the dollar helps Americans. I swear it's about
the stupidest attempt at pulling the wool over people's eyes that
I've ever heard of. A person would have to be a complete
imbecile to swallow it, which helps P.T.Barnum's assessment
of the American people if Americans do swallow it.

Everything we buy from overseas is going to cost more now,
after we've already eliminated our ability to make our own stuff.
Do you think other nations are going to sell goods to us below
their cost out of charity because our dollars aren't worth much
to them anymore?

My Canadian cousins used to complain that their money
wasn't worth much when they bought stuff in the United
States. I haven't talked with them about it since the dollar
took its big slide, but I'm sure they're much happier now with
what their Canadian dollars can buy in America. If that's
true, then it can't also be true that Americans must be
happier with how much less Canadian goods their American
dollars can buy now.







Not very good arguments against tariffs here.

See above.

JG



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Relevant Pages

  • Re: Forbes: "Budget To Nowhere"
    ... They have a documented tendency to pay more for Japanese ... pay a bit more for domestic goods, as will most Asians, for that matter. ... don't need tariffs if they behave thus consistently. ... There are also many situations where the price difference between domestic ...
    (soc.retirement)
  • Re: Forbes: "Budget To Nowhere"
    ... They have a documented tendency to pay more for Japanese ... pay a bit more for domestic goods, as will most Asians, for that matter. ... don't need tariffs if they behave thus consistently. ... If Americans would check the label every now and again, ...
    (soc.retirement)
  • Re: Can Anybody Out There Fix the Banking System?
    ... The last being the most egregious attack on Americans, our economy, and our Republic. ... Globalism is the dissolution of our Sovereignty and harmonizing or eliminating our Laws to the advantage, ... Thumper supports tariffs, which IMHO, are not the answer. ... The tax code has been used for a long time to hide a multitude of sins, which is why it's as complex as it is. ...
    (soc.retirement)
  • Re: Can Anybody Out There Fix the Banking System?
    ... Globalism is a hostile attack on Americans and our, ... I think you may be stuck in a time warp when you say globalism is ... Thumper supports tariffs, which IMHO, are not the answer. ... I have suggested using the tax code. ...
    (soc.retirement)
  • Re: Do you want your tax money to pay a forklift operator $103,000.00 a year
    ... You might point out that tariffs are not a US monopoly. ... America is losing home-grown industry and good jobs to ... Americans want to work for or should want to work for. ... successfully compete. ...
    (soc.retirement)