Donald Trump Begins Inauguration Speech With a Rant Against Free Trade

[ajax]

Meh. I don't know why everyone's getting so wound up about Trump's speech. It was typical Trump -- lots of hot air flamed by his super-charged ego. Trump is a showman and his speech was a shout-out to the deplorables who voted him in.

We live in a hyper interconnected world that will never go back to the nostalgic leave-it-to-beaver-days of the 50's. I don't care how much Trump pumps his little thumbs at his chest, America will never experience the low-education, factory-job lifestyle of the post world war II era again. That's a good thing. Not sure why we want to go back to that. It was an anomaly. The rest of the world was in tattered ruins and Britain had essentially transferred a great deal of it's wealth to the United States to survive Hitler. We were the only game in town. Good point post WW2

It only took a generation, but the rest of the world rebuilt and challenged America's industrial strength. This is not a bad thing. Division of labor is a good thing. Trade is not war, but cooperation. Unencumbered by unions and labor laws, they could make things cheaper and faster. Prices came down on everything. Great for the gods of industry. Great for the Wal-Mart lovin', sweatsuit sportin' masses of the USA -- even though they complained that instead of working on the assembly line, they were now collecting unemployment or saying, "you wanna super-size that?"

So, unless the rest of the world gets shredded again in a global conflict and America is spared, I don't see any way Trump can make good on his "rant".

Or maybe that is the plan of the Pentaverate -- use the Donald to fan the fires of nationalism, spread it to the rest of the world, provoke war, and watch the world burn. Doubt it. But that is the inevitable result: "If good's don't cross borders, armies will." It's the only way you're going to get Geneva Steel back on the shores of Utah lake. Do you want Geneva Steel back?

[ajax]

Will Trump Reduce or Increase Power in Washington?
http://cafehayek.com/2017/01/42053.html" onclick="window.open(this.href);return false;

Here’s a letter to the Wall Street Journal:

In his inaugural speech, President Trump vowed that his administration will be dedicated to “transferring power from Washington, D.C. and giving it back to you, the people” (“Trump’s Populist Manifesto,” Jan. 21). Sounds great. But in that same speech he also said that “We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.”

Overlook the absurd suggestion that foreigners who peacefully offer to sell to us attractive products at low prices are akin to invading armies and terrorists intent on violent destruction and murder. Instead, recognize that Mr. Trump’s incessant promise to raise trade barriers is a promise to reduce each American’s freedom to spend his or her money as he or she chooses; it is a pledge to give to politicians and bureaucrats in the capital city more authority to override the economic decisions of ordinary families and businesses from Bangor to Bakersfield. It is, in short, a vow that his administration will be dedicated to transferring yet more power from us, the people, and giving it to Washington, D.C.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

I wish also that the WSJ‘s editors had responded a bit differently to this Trump jeremiad than they did. They wrote

U.S. companies aren’t stolen; they’re driven away by high tax rates and punitive regulation.

It’s true that U.S. companies aren’t stolen through peaceful commerce. It’s true also that high tax rates and punitive regulation render all businesses less productive and dynamic than they would otherwise be, and cause some of these businesses to go bankrupt when they are faced with intensified competition from foreign rivals. But contrary to the impression that I fear is conveyed by this otherwise excellent WSJ editorial, it’s not true that, were all businesses in the United States to have their tax and regulatory burdens greatly lightened, Americans would import less, that fewer American companies would be threatened with extinction by foreign rivals, or that American businesses would no longer find it profitable to expand their foreign operations or to relocate outside of America.

Trade patterns reflect the pattern of producers’ comparative advantages (whether these advantages be ‘natural’ or the results of business or policy choices). Raise taxes or lower them, and increase regulations or decrease them, comparative advantages will still exist (even if they differ from what they would be under alternative tax and regulatory schemes).

Judging from the pronouncements of many of the people who write to me, as well as from much of the commentary that I encounter in various outlets, there’s a widespread belief among conservatives that taxes and regulations in the U.S. put American producers in general at a great disadvantage in global markets and cause Americans to import more than we would were taxes and regulations here lighter. But this belief is mistaken. Not only, again, do those who hold this belief ignore the reality of comparative advantage, they also wrongly assume that businesses in the United States all operate under the burden of uniquely oppressive taxation and heavy regulations.

Note that my argument here is emphatically not that tax rates should not be cut and regulations not reduced. I support radical tax cuts and the abolition of nearly all government-imposed regulations. Cutting taxes and reducing regulations would increase Americans’ prosperity (and, importantly, also our freedom, regardless of the economic consequences). But cutting taxes and reducing regulations will not reduce our imports (quite the contrary, most likely) or shield American firms generally from the rigors of global competition.

[Bronco73idi]

Trump didn't win because of his 4th grade speeches, i.e. "Build the Wall". He won because of people like you.

Um, that's exactly how he won. "Build the wall", "Drain the Swamp", "Lock Her Up"

It's tapping into base emotion. It's pure political theater. And the ldsff'ers lap it up because the other team lost.

So you are saying if we were as intelligent as you we would have voted for Soros puppet???? Ignorance isn't bliss!!!! Like it was said before, binary decision!!!! You had 2 real choices unless you took action and convinced enough people to get 270 electorals for a third!!!! Problem with people like you is it's all talk!!!!!

Mitt Romney even said this to a certain degree, he talk crap about trump and then said but he is better then Hillary. Most people forget the last part. Bill is bisexual and Hillary was the mistress according to one victim of theirs. But you keep preaching preacher!!!! What ifs this what ifs that!!!!!

[Thomas]

Well, you can continue to think of us as simpletons but I prefer to think of it as being pragmatic. There really was only two people with a chance to win. And every other candidate had their flaws as well. So, I think we are better off with Trump by a mile or two. I don't think anyone thinks he is perfect or agrees with all of his policies. For me, I am not too keen on nuclear war so to escalate the conflict in Syria, like Hillary and the military machine was want to do seems against my best interest. I am not interested in having my government back Islamic radicals in a fight against a legally elected government just cause the Saudis want it and the military machine wants more blood money and war with Russia. Especially when they create the refugee crisis that has changed Europe into a war zone.

There are really a lot of reasons to prefer Trump over Hillary but some people will continue to complain because they didn't get the perfect candidate. Truth is the perfect candidate doesn't exist and the system of our government will crash. Like all republics it is devolving into a oligarchy and it there is not much that can be done about it. It was a flawed system from day one and it is only luck it has made it this long.

[Thomas]

My bad. I should have voted for more government regulation, carbon taxes to curb imaginary, man caused, global warming, higher payroll taxes, higher personal income taxes, more government debt, more useless government employees, making life harder for small business and watched the good times roll.

Please just stop and consider what Ajax is proposing. If the US military erects a naval blockade around an enemy, it is harder for imported goods to arrive in that country. Of necessity, those now scarce goods will be higher priced. War caused those higher prices. Why would we let politicians erect a "legal" blockade around us causing the prices of imported goods cost more? That would be the same effect as if some country had blockaded our ports. Don't you want to keep more of your hard-earned money in your pocket and not in the hands of another? You're poorer when you have less money.

As for your comment about more government regulation and carbon taxes, etc., I think you know very well that Ajax is not in favor of those things either. Just because Ajax (and I) criticize Trump's policies, doesn't mean we are in favor of Hillary's tyrannical ways. The creation of false dichotomies is not helpful.

So what's your point? It was a binary choice. Trump or Hillary so why complain?

That's another false dichotomy.

I think you have not perceived the true nature of our government if you actually think the presidential race had more than two possible outcomes. It was a fluke that Trump even made it. The true nature of our government is oligarchy. Once you see that the options are clear and few. The people have little input into who rules over them or the nature of the policies their leaders will implement. The system is fatally flawed.

[ajax]

I'm really uninterested in pragmatics. I come to the Freedom Forum to defend the principles of liberty, unabashed.

[David13]

As do the majority of us here, Ajax.
It's just that we all have different ways of doing that and do it to different degrees.
There is a minority here against much or all liberty. And they easily and rapidly identify themselves.
dc

[Silver]

Please just stop and consider what Ajax is proposing. If the US military erects a naval blockade around an enemy, it is harder for imported goods to arrive in that country. Of necessity, those now scarce goods will be higher priced. War caused those higher prices. Why would we let politicians erect a "legal" blockade around us causing the prices of imported goods cost more? That would be the same effect as if some country had blockaded our ports. Don't you want to keep more of your hard-earned money in your pocket and not in the hands of another? You're poorer when you have less money.

As for your comment about more government regulation and carbon taxes, etc., I think you know very well that Ajax is not in favor of those things either. Just because Ajax (and I) criticize Trump's policies, doesn't mean we are in favor of Hillary's tyrannical ways. The creation of false dichotomies is not helpful.

So what's your point? It was a binary choice. Trump or Hillary so why complain?

That's another false dichotomy.

I think you have not perceived the true nature of our government if you actually think the presidential race had more than two possible outcomes. It was a fluke that Trump even made it. The true nature of our government is oligarchy. Once you see that the options are clear and few. The people have little input into who rules over them or the nature of the policies their leaders will implement. The system is fatally flawed.

No doubt the oligarchy is in charge and the system is flawed, but not permanently so. What if T. Jefferson and P. Henry and all the others had simply given up and allowed the oppression to continue. I am optimistic for a change though there will be a struggle to achieve it.

As for the flukiness of Trump's election, I recommend reading everything you can by Brandon Smith at http://www.alt-market.com" onclick="window.open(this.href);return false; He makes a very strong argument for the elites wanting Trump all along.

[Thomas]

I'm really uninterested in pragmatics. I come to the Freedom Forum to defend the principles of liberty, unabashed.

So lets get to the core of the problem then. Representative republic. How about a direct democracy? Whining about the choices we have for president will accomplish nothing. After all, it is a the product of our system. The system is at fault

In the mean time, I will take the pragmatic choice

[ajax]

I'm really uninterested in pragmatics. I come to the Freedom Forum to defend the principles of liberty, unabashed.

So lets get to the core of the problem then. Representative republic. How about a direct democracy? Whining about the choices we have for president will accomplish nothing. After all, it is a the product of our system. The system is at fault

In the mean time, I will take the pragmatic choice

I've already addressed this with you here here and here.

[ajax]

Yes, Trump Is Unethical
http://cafehayek.com/2017/01/yes-trump- ... hical.html" onclick="window.open(this.href);return false;

Here’s a letter to a long-time Cafe Hayek reader:

Mr. Eddie Nunez

Mr. Nunez:

Thanks for your e-mail.

You say that while I might be correct that Donald Trump doesn’t understand the economics of trade, I am “out of bounds to write as though it is unethical for our new President to favor additional trade restrictions.”

I disagree for many reasons. But I’ll here offer only my chief one. Mr. Trump’s ethics tell him that he (or other state officials) have the right to restrict the ways in which I may peacefully spend my own income. But my income belongs to me; it does not belong to Trump; it does not belong to the government; it does not belong to the country or to ‘the People’; it does not belong to American corporations or to American workers. It belongs to me and to me alone. And of course what’s true for my income is true for the income of every other peaceful person. Yet Trump bellows as if it is not only appropriate, but downright noble, for him to interfere in my and others’ peaceful commercial affairs, conducted with our own incomes, for the sole reason that some of those affairs are with non-Americans. Such interference is unethical.

You likely doubt me, so let me ask: If your next-door neighbor, Jones, pokes gun at your head to order you to pay to him a fine if you continue to have your lawn mowed by a company located across town rather than by his teenage son, would you not immediately understand such coercion to be unethical? Of course you would. Now I challenge you to explain to me how Donald Trump’s actions on the trade front differ in any essential ways from those of this hypothetical Jones.

I can think of no essential difference. Sure, Trump was elected to a grandiose political office. So what? Suppose that a majority of your neighbors vote to empower Jones to threaten you with violence in order to discourage you from buying your lawn-care services from someone outside of your neighborhood: would you then think that Jones’s actions are ethical? I wouldn’t.

I understand that government has long interfered, and in many different ways, in the peaceful affairs of private citizens, from telling blacks where they could and couldn’t sit on buses to confiscating large chunks of citizens’ incomes for transfer to corn farmers, airplane manufacturers, and other politically powerful groups. I regard all such interference to be unethical. But because Trump trumpets so loudly and so proudly his promise to interfere in Americans’ commerce with non-Americans – and for no reason other than to enrich some Americans at the expense of other Americans – I focus much of my attention on this particular instance of vile, inexcusable behavior.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

[ajax]

Do we ever get any mention of the Constitution, the legal limits of government power, or the rights of the individual?

No worries, says our benefactor, he will make great deals for us.

[Silver]

Yes, Trump Is Unethical
http://cafehayek.com/2017/01/yes-trump- ... hical.html" onclick="window.open(this.href);return false;

Here’s a letter to a long-time Cafe Hayek reader:

Mr. Eddie Nunez

Mr. Nunez:

Thanks for your e-mail.

You say that while I might be correct that Donald Trump doesn’t understand the economics of trade, I am “out of bounds to write as though it is unethical for our new President to favor additional trade restrictions.”

I disagree for many reasons. But I’ll here offer only my chief one. Mr. Trump’s ethics tell him that he (or other state officials) have the right to restrict the ways in which I may peacefully spend my own income. But my income belongs to me; it does not belong to Trump; it does not belong to the government; it does not belong to the country or to ‘the People’; it does not belong to American corporations or to American workers. It belongs to me and to me alone. And of course what’s true for my income is true for the income of every other peaceful person. Yet Trump bellows as if it is not only appropriate, but downright noble, for him to interfere in my and others’ peaceful commercial affairs, conducted with our own incomes, for the sole reason that some of those affairs are with non-Americans. Such interference is unethical.

You likely doubt me, so let me ask: If your next-door neighbor, Jones, pokes gun at your head to order you to pay to him a fine if you continue to have your lawn mowed by a company located across town rather than by his teenage son, would you not immediately understand such coercion to be unethical? Of course you would. Now I challenge you to explain to me how Donald Trump’s actions on the trade front differ in any essential ways from those of this hypothetical Jones.

I can think of no essential difference. Sure, Trump was elected to a grandiose political office. So what? Suppose that a majority of your neighbors vote to empower Jones to threaten you with violence in order to discourage you from buying your lawn-care services from someone outside of your neighborhood: would you then think that Jones’s actions are ethical? I wouldn’t.

I understand that government has long interfered, and in many different ways, in the peaceful affairs of private citizens, from telling blacks where they could and couldn’t sit on buses to confiscating large chunks of citizens’ incomes for transfer to corn farmers, airplane manufacturers, and other politically powerful groups. I regard all such interference to be unethical. But because Trump trumpets so loudly and so proudly his promise to interfere in Americans’ commerce with non-Americans – and for no reason other than to enrich some Americans at the expense of other Americans – I focus much of my attention on this particular instance of vile, inexcusable behavior.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

I would sincerely like to hear a rational argument that can defeat the common sense in this article. I simply want what is best for the rights of others and me. So is there anyone on LDSFF, and not necessarily a Trump supporter, who can skillfully and logically argue for more interference from the government into a sovereign individual's economic choices?

Let's strip away the hyperbole. In its most basic elements, should the government be able to tell us from whom we can buy something and for how much? Please assume that I am talking about transactions involving fruits and fishes and cars and clothes, not atomic bombs or nuclear-powered submarines. I want to discuss general rules and not exceptions. Let's have a real discussion with intellectual honesty.

[Thomas]

looks like a few people don't understand their place in this world. Let me give you a hint. You are not the master.

[harakim]

I'm really uninterested in pragmatics. I come to the Freedom Forum to defend the principles of liberty, unabashed.

Uninterested in pragmatics? How interested are you in having food or electricity? Under the Ajax plan, we will allow our enemies to make all of our core goods and hold them ransom. I don't like that plan. I much prefer the one where I can buy a radio or a light bulb to light up my house because I'm not living in a country full of academics who think free trade is better than freedom. And then when it brings back jobs with it, that's a bonus. Did you know that every dollar that we keep in America generates, on average, 7 dollars before it leaves our economy? So when you save 20 dollars on a 100 dollar radio, we come out $20 ahead but we also come out probably 200 dollars behind for a net of 180 dollars lost. It's stepping over dollars to pick up pennies.

Manufacturing is the biggest national security threat we have. Ask a researcher at a national lab what they are working on. If they tell you, there is a chance you'll be surprised just how much of a threat it is.

[harakim]

Yes, Trump Is Unethical
http://cafehayek.com/2017/01/yes-trump- ... hical.html" onclick="window.open(this.href);return false;

Here’s a letter to a long-time Cafe Hayek reader:

Mr. Eddie Nunez

Mr. Nunez:

Thanks for your e-mail.

You say that while I might be correct that Donald Trump doesn’t understand the economics of trade, I am “out of bounds to write as though it is unethical for our new President to favor additional trade restrictions.”

I disagree for many reasons. But I’ll here offer only my chief one. Mr. Trump’s ethics tell him that he (or other state officials) have the right to restrict the ways in which I may peacefully spend my own income. But my income belongs to me; it does not belong to Trump; it does not belong to the government; it does not belong to the country or to ‘the People’; it does not belong to American corporations or to American workers. It belongs to me and to me alone. And of course what’s true for my income is true for the income of every other peaceful person. Yet Trump bellows as if it is not only appropriate, but downright noble, for him to interfere in my and others’ peaceful commercial affairs, conducted with our own incomes, for the sole reason that some of those affairs are with non-Americans. Such interference is unethical.

You likely doubt me, so let me ask: If your next-door neighbor, Jones, pokes gun at your head to order you to pay to him a fine if you continue to have your lawn mowed by a company located across town rather than by his teenage son, would you not immediately understand such coercion to be unethical? Of course you would. Now I challenge you to explain to me how Donald Trump’s actions on the trade front differ in any essential ways from those of this hypothetical Jones.

I can think of no essential difference. Sure, Trump was elected to a grandiose political office. So what? Suppose that a majority of your neighbors vote to empower Jones to threaten you with violence in order to discourage you from buying your lawn-care services from someone outside of your neighborhood: would you then think that Jones’s actions are ethical? I wouldn’t.

I understand that government has long interfered, and in many different ways, in the peaceful affairs of private citizens, from telling blacks where they could and couldn’t sit on buses to confiscating large chunks of citizens’ incomes for transfer to corn farmers, airplane manufacturers, and other politically powerful groups. I regard all such interference to be unethical. But because Trump trumpets so loudly and so proudly his promise to interfere in Americans’ commerce with non-Americans – and for no reason other than to enrich some Americans at the expense of other Americans – I focus much of my attention on this particular instance of vile, inexcusable behavior.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

I would sincerely like to hear a rational argument that can defeat the common sense in this article. I simply want what is best for the rights of others and me. So is there anyone on LDSFF, and not necessarily a Trump supporter, who can skillfully and logically argue for more interference from the government into a sovereign individual's economic choices?

Let's strip away the hyperbole. In its most basic elements, should the government be able to tell us from whom we can buy something and for how much? Please assume that I am talking about transactions involving fruits and fishes and cars and clothes, not atomic bombs or nuclear-powered submarines. I want to discuss general rules and not exceptions. Let's have a real discussion with intellectual honesty.

Because the government is supposed to provide for the common defense.

[ajax]

I'm really uninterested in pragmatics. I come to the Freedom Forum to defend the principles of liberty, unabashed.

Uninterested in pragmatics? How interested are you in having food or electricity? Very interested. Was at the grocery store today. Amazing the food from all around: California, Florida, Mexico, South and Central America, What wonderful choices. Electricity is by necessity a local product, so irrelevant. Under the Ajax plan, we will allow our enemies to make all of our core goods and hold them ransom. Sorry, but this does not follow from voluntary trade. Do you try to hold others ransom for products you supply them? I don't like that plan. I much prefer the one where I can buy a radio or a light bulb to light up my house because I'm not living in a country full of academics who think free trade is better than freedom. Um free trade falls under the banner of freedom by definition. And then when it brings back jobs with it, that's a bonus. Did you know that every dollar that we keep in America generates, on average, 7 dollars before it leaves our economy? So when you save 20 dollars on a 100 dollar radio, we come out $20 ahead but we also come out probably 200 dollars behind for a net of 180 dollars lost. It's stepping over dollars to pick up pennies.

Manufacturing is the biggest national security threat we have. Ask a researcher at a national lab what they are working on. If they tell you, there is a chance you'll be surprised just how much of a threat it is. Manufacturing is doing just fine. It is still our economy's largest sector. Less manufacturing jobs, but that is because of increased technology and automation which has led to vastly greater output.

[Silver]

Yes, Trump Is Unethical
http://cafehayek.com/2017/01/yes-trump- ... hical.html" onclick="window.open(this.href);return false;

Here’s a letter to a long-time Cafe Hayek reader:

Mr. Eddie Nunez

Mr. Nunez:

Thanks for your e-mail.

You say that while I might be correct that Donald Trump doesn’t understand the economics of trade, I am “out of bounds to write as though it is unethical for our new President to favor additional trade restrictions.”

I disagree for many reasons. But I’ll here offer only my chief one. Mr. Trump’s ethics tell him that he (or other state officials) have the right to restrict the ways in which I may peacefully spend my own income. But my income belongs to me; it does not belong to Trump; it does not belong to the government; it does not belong to the country or to ‘the People’; it does not belong to American corporations or to American workers. It belongs to me and to me alone. And of course what’s true for my income is true for the income of every other peaceful person. Yet Trump bellows as if it is not only appropriate, but downright noble, for him to interfere in my and others’ peaceful commercial affairs, conducted with our own incomes, for the sole reason that some of those affairs are with non-Americans. Such interference is unethical.

You likely doubt me, so let me ask: If your next-door neighbor, Jones, pokes gun at your head to order you to pay to him a fine if you continue to have your lawn mowed by a company located across town rather than by his teenage son, would you not immediately understand such coercion to be unethical? Of course you would. Now I challenge you to explain to me how Donald Trump’s actions on the trade front differ in any essential ways from those of this hypothetical Jones.

I can think of no essential difference. Sure, Trump was elected to a grandiose political office. So what? Suppose that a majority of your neighbors vote to empower Jones to threaten you with violence in order to discourage you from buying your lawn-care services from someone outside of your neighborhood: would you then think that Jones’s actions are ethical? I wouldn’t.

I understand that government has long interfered, and in many different ways, in the peaceful affairs of private citizens, from telling blacks where they could and couldn’t sit on buses to confiscating large chunks of citizens’ incomes for transfer to corn farmers, airplane manufacturers, and other politically powerful groups. I regard all such interference to be unethical. But because Trump trumpets so loudly and so proudly his promise to interfere in Americans’ commerce with non-Americans – and for no reason other than to enrich some Americans at the expense of other Americans – I focus much of my attention on this particular instance of vile, inexcusable behavior.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

I would sincerely like to hear a rational argument that can defeat the common sense in this article. I simply want what is best for the rights of others and me. So is there anyone on LDSFF, and not necessarily a Trump supporter, who can skillfully and logically argue for more interference from the government into a sovereign individual's economic choices?

Let's strip away the hyperbole. In its most basic elements, should the government be able to tell us from whom we can buy something and for how much? Please assume that I am talking about transactions involving fruits and fishes and cars and clothes, not atomic bombs or nuclear-powered submarines. I want to discuss general rules and not exceptions. Let's have a real discussion with intellectual honesty.

Because the government is supposed to provide for the common defense.

You lost me. Do you care to explain in more detail?

[ajax]

http://cafehayek.com/2017/01/quotation- ... -1964.html" onclick="window.open(this.href);return false;

If a gang appears at your door and threatens to unleash violence on you if you insist on conducting your economic affairs along the peaceful lines that you judge best, rather than along the lines demanded by the gang’s leader, you quite correctly do not regard this gang as a “protector” or, indeed, as anything other than a crew of common criminals. And if the gang’s leader then proceeds to attempt to justify the gang’s actions with accounts of how he and his gang are the benevolent servants of this particular seller, of that particular business, or of those particular workers – or, indeed, of you yourself – your assessment of their threats of violence against you does not change: you continue, properly so, to recognize and regard these brutes as the dangerous criminals that they are.

But if the gang’s leader gets all dressed up in a suit and boasts a gaudy political title, and if the gang itself isn’t just a few neighborhood thugs but several thousand well-dressed or impressively uniformed “officials,” somehow, by some strange magic that I do not comprehend, their threats of violence against you become, not criminal activities to be condemned, but “trade policy” to be respected. Papers and books are written to assess the merits or demerits of this “policy.” Econometricians amuse themselves and the media with various reported quantitative measurements of the “costs” and “benefits” of this “policy.” Debates rage over whether or not the “benefits” of the “policy” outweigh the “costs” of the policy.

Yet such “policy” is and remains the coercive interference by the powerful with the peaceful commercial affairs of the less powerful. The only real difference between the neighborhood gang at your front door and the horde of government officials carrying out “trade policy” is that most victims of the latter, unlike the former, are eager to be duped into believing that their victimization is really their economic salvation.

[ajax]

Why Trade Restrictions Always Backfire
https://fee.org/articles/why-trade-rest ... -backfire/" onclick="window.open(this.href);return false;

When the U.S. imposed a tariff on magazine paper from Canada in 2015, workers at a financially troubled paper mill in Maine cheered. Less than two years later, their jobs are gone and the mill is closed.

It wasn’t supposed to happen that way. Tariffs, protectionists tell us, help the domestic economy, or at least certain industries. The truth is that restrictions on imports almost always backfire. By suppressing competition, they make domestic industries less efficient; they raise prices both on imports and the competing domestic products; they don’t spur us to fix our own problems or products but instead, they make us sloppy; and they hurt consumers who face higher prices and often fewer choices.

With so many people calling for tariffs or quotas or other protectionist restrictions on trade these days, perhaps we’re overdue to re-learn some important lessons.

The Importance of Trade

Why trade at all? If we really wanted to, we could behave like a national Robinson Crusoe—keeping foreign goods out and making everything ourselves. But people trade because they want to acquire things that are cheaper or better or even unavailable at home. The fundamental principle of trade is that both sides to the transaction benefit or they wouldn’t have traded in the first place.

The most painful lesson in America’s trade history came in 1930. To combat rising unemployment at the start of the Great Depression, Congress and the President imposed the highest tariffs in a century. The thought was that if we made those foreign imports more expensive, then Americans would buy more domestic-made goods and thereby put people back to work. But foreigners retaliated by imposing tariffs on the U.S. A full-scale trade war resulted.

Trade is a two-way street. Closing the door to imports closes the door to exports. If foreigners can’t sell here, they can’t earn the dollars they need to buy here. When the 1930 tariff caused Americans to buy fewer imports, foreign sellers stopped buying American goods. As a result, American agriculture, dependent then as now on exporting farm produce, suffered plummeting prices and huge losses in the 1930s.

Americans last year imported about $2.3 trillion in physical merchandise. More than half of the total were not finished goods. Rather, they were raw materials, capital goods, industrial supplies and component parts for things like automobiles. Make all those things costlier through tariffs and you simultaneously hurt American industries that buy them. A tariff on foreign goods should be regarded as a consumption tax on Americans citizens and companies.

What About Fair Trade?

Foreign governments don’t play fair, you say! Yes, others from time to time do impose tariffs on us. But retaliating in kind is liking cutting off your nose to spite your face. It just makes things more expensive to us.

Yes, China has manipulated its currency to help its exports but does anybody think America’s central bank doesn’t manipulate the dollar, as well as interest rates? And when China reduces its currency’s value to help its exports, the flip side is that we get a lot of stuff from China at cut-rate prices that we can use to both save money and make our own industries more competitive. American automakers may not like cars coming from Japan but they sure like cheaper parts coming from China or wherever.

Freer trade causes short-term issues and necessitates adjustments in production and employment, for the same reasons the automobile challenged the buggy industry. But imposing costs and barriers to trade creates problems of its own. Trade is, and always has been, a vitally important way to strengthen an economy and give choice to consumers.

Lawrence W. Reed is president of the Foundation for Economic Education, http://www.fee.org" onclick="window.open(this.href);return false;, in Atlanta.

[eddie]

looks like a few people don't understand their place in this world. Let me give you a hint. You are not the master.

:ymapplause:

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One Weird Trick To Destroy Prosperity and Progress
https://fee.org/articles/one-weird-tric ... -progress/" onclick="window.open(this.href);return false;

On his first Monday on the job, President Trump invited business leaders to the White House, fed them breakfast, called them “great people,” and then lowered his protectionist boom. “If you go to another country” and cut U.S. jobs, “we are going to be imposing a very major border tax” on that product, he told the executives. During his campaign Trump defined “major” as 35%.

A couple days before, the new President shouted his dystopian vision of America to a quarter million or a million or whatever number of brave souls who braved a wet Washington day to hear his inaugural address. The wasteland of empty factories and unmet hopes and dreams stops today, he said to a smattering of applause, with the ghosts of Reed Smoot and Willis Hawley, the grandfathers of economic isolationism, flanking his either side.

It’s 1930 all over again and Trump has been channeling his inner Hoover since descending down his golden escalator a year and a half ago. During his 1928 election campaign, Herbert Hoover pledged to help farmers by raising tariffs on agricultural products. However, once the farmers looked to be getting protectionist help, industry big and small also wanted theirs.

“When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history,” Capitalism.org explains.

Please Don’t Do This

“I almost went down on my knees to beg Herbert Hoover to veto the asinine Hawley-Smoot Tariff,” J.P. Morgan partner Thomas Lamont recalled. “That Act intensified nationalism all over the world.” Trump, and his supporters, not being students of history, or oblivious to the notions of comparative advantage and the division of labor, are leading America down the same path, at the same time nationalism grows in Europe and Japan.

More than a thousand economists in 1930, including Frank Fetter and Frank Taussig, petitioned against the bill. Fetter recalled, “Economic faculties that within a few years were to be split wide open on monetary policy, deficit finance, and the problem of big business, were practically at one in their belief that the Hawley-Smoot bill was an iniquitous piece of legislation.”

Theodore Phalan, Deema, Yazigi, and Thomas Rustici, in a 2012 FEE article, explain why economists united against Smoot-Hawley.

The protest included five basic points. First, the tariff would raise the cost of living by “compelling the consumer to subsidize waste and inefficiency in [domestic] industry.” Second, the farm sector would not be helped since “cotton, pork, lard, and wheat are export crops and sold in the world market” and the price of farm equipment would rise. Third, “our export trade in general would suffer. Countries cannot buy from us unless they are permitted to sell to us.” Fourth, the tariff would “inevitably provoke other countries to pay us back in kind against our goods.” Finally, Americans with investments abroad would suffer since the tariff would make it “more difficult for their foreign debtors to pay them interest due them.”

Of course the Great Depression quickly followed the bill’s passage and “most of the empirical discussions of the downturn in world economic activity taking place in 1929–1933 put Smoot-Hawley at or near center stage,” write Phalan, Yazigi and Rustici.

Stealing and Stealing Back

President Trump believes America’s jobs are being stolen and thinks he can steal them back with government force, with the public’s jingoistic support, to fulfill his promise to “Make America Great Again.” Of course someone must pay the cost, and that someone will be U.S. consumers.

In “Making Economic Sense," and countless other writings throughout his life, Murray Rothbard explained the problem:

protectionism is not only nonsense, but dangerous nonsense, destructive of all economic prosperity…. Coerced restraints on trade—such as protectionism—cripple, hobble, and destroy trade, the source of life and prosperity. Protectionism is simply a plea that consumers, as well as general prosperity, be hurt so as to confer permanent special privilege upon groups of less efficient producers, at the expense of more competent firms and of consumers. But it is a peculiarly destructive kind of bailout, because it permanently shackles trade under the cloak of patriotism.

In 1930 about a quarter of the working population worked in agriculture, so Hoover wanted to make farmers happy. Now, only 2% work on farms. Today, 20% work in industrial jobs and Trump wants to protect those jobs at our expense, despite industrial employment peaking around 1950 and declining ever since, with employment in the service sector continuing to climb.

Ironically, Trump’s protectionist program is being praised by the hard-core left. Sahra Wagenknecht, the parliamentary group chair of the Left Party in Germany, is quoted by Peter Schwartz on the World Socialist Website.org,

“Apparently a Donald Trump even has more economic policy sense than you,” Wagenknecht told the assembled deputies. “Because at least the man has understood that state-led industrial policy is better than low-wage service sector jobs and that budget cutting does not help crisis-ridden and collapsing infrastructure, but only a well-funded programme of public investments.”

Mr. Schwartz goes on to explain, “This recalls the argument that Hitler’s policies initially were not so bad because he built autobahns and financed other public investments.”

Adam Smith long ago explained the very simple rationale for extending the division of labor as widely as possible, and by means of a simple analogy: “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.”

And it’s not only about prosperity. It’s about peace and civilization. “The philosophy of protectionism is a philosophy of war,” Ludwig von Mises wrote in “Human Action.” “The wars of our age are not at variance with popular economic doctrines; they are, on the contrary, the inescapable result of a consistent application of these doctrines.”

Should Trump attempt to back up his bravado about America winning again and being rich again with protectionist nationalism, it will indeed be “dangerous nonsense.” The kind that will make the entire world poorer and less safe.

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From the Concise Encyclopedia of Economics:
http://www.econlib.org/library/Enc/Inte ... Trade.html" onclick="window.open(this.href);return false;

"The noneconomic views of trade all seem to stem from a common root: the tendency for human beings to emphasize tribal rivalries. For most people, viewing trade as a rivalry is as instinctive as rooting for their national team in Olympic basketball."

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A funny thing happened at the inauguration:
http://www.jeffjacoby.com/19603/trump-b ... omic-folly" onclick="window.open(this.href);return false;

Cheering in the crowd as Trump spoke, reported Reuters, were numerous supporters wearing his signature "Make America Great Again" baseball caps — many of which were imported from China, Vietnam, and Bangladesh. Made-in-America Trump hats were available for purchase on the official Trump campaign website, where they sold for up to $30 apiece. But as Reuters noted, the imported versions being offered by street vendors in Washington cost only $20 — one-third less.

What distinguished the cheering onlookers rocking a domestic "Make America Great Again" hat from those wearing an imported one? Only one thing: Those who bought the US-manufactured product for $30 ended up with $10 less of purchasing power than those who spent $20 to buy an import. Trump supporters whose caps came from overseas had money left over to spend on other purchases from other vendors.

There, in a nutshell, is the folly of "Buy American."

He goes onto say:

Protectionism amounts to the claim that everyone benefits when choices go down and prices go up. The only reason more Americans don't dismiss that claim as self-evident crackpottery is because it comes cloaked in the language of nationalistic resentment. Such as Trump denouncing "the ravages of other countries making our products" and urging patriots to support him in "rebuilding our country with American hands and American labor."

Not even Trump claims there is anything unpatriotic about selling American-made products to Mexico or China. So how can it be unpatriotic to buy products from Mexico or China? Trade is by definition a two-way proposition: Stifle imports and you stifle exports. The only way foreigners can acquire the dollars they need to purchase American goods and services is for Americans to buy their goods and services. The more we trade, the more we gain.

It is no more "patriotic" for American consumers and manufacturers to restrict their economic activity to American soil than it would be for residents of a state to confine their spending to their own state. When people in Massachusetts do business with people in New Hampshire or New York or New Mexico, it isn't evidence of the Bay Staters' disloyalty or weak self-esteem. Everyone understands that Americans trade across state borders because it increases economic opportunity and improves our standard of living.

Mandatory "Buy American" rules make no more sense for America than mandatory "Buy Massachusetts" rules would make for Massachusetts — or mandatory "Buy New Bedford" rules would make for New Bedford. Prosperity doesn't come from confining trade behind boundaries, but from expanding it beyond those boundaries. That's true of neighborhoods, cities, and states. It's no less true of countries.

More than perhaps any previous president, Trump has done business around the world. He has invested, hired, purchased, and built in other countries. Hundreds of products sold by Trump were made overseas. On the website of his now-defunct Trump University, he explained how "outsourcing help companies be more competitive and more productive." If anyone should understand how beneficial trade across borders can be, Trump should.

Cynical protectionism may be good politics. But one thing it will never do is make America great again.

The whole article well worth the read.

[Ezra]

I lived in Alberta Canada for about 6 months. At the time their economy was booming. Their dollar was worth about 30 cents less then ours. So I bought a lot of stuff while I was there. While I was there almost everyday I saw a Lamborghini or some other very high end car on the road. Jobs were so plenty that it caused wages to go up. Which caused more wealth. Which caused more jobs.
I didn't have a work visa yet found work so easily. And was payed really well. Literally I made one phone call and got a 20+ dollar an hour job in a field that I had no experience. Just because I was willing to work. US dollar that is.
Because people had money new house construction boomed. Which created more jobs more wealth and more housing being built. This all started as I understand because oil prices were up at the time. That boom lasted quite a while. Americans wouldn't be hurt by haveing a market with lots of jobs. By making it easy for business to do business in the USA is a good thing.