Protectionism, and the promiscuous and capricious government interventions that inevitably accompany it, is , always and everywhere, crony capitalism. But he is spot on about the incompatibility of America’s new darker system and the rule of law:
“Everyone depends on the whim of the administration. Who gets tariff protection? On whim. But then you can apply for a waiver. Who gets those, on what basis? Now you can get subsidies. Who gets the subsidies? There is no law, no rule, no basis for any of this. If you think you deserve a waiver, on what basis do you sue to get one? Well, it sure can’t hurt not to be an outspoken critic of the administration when the tariffs, waivers and subsidies are being handed out on whim. This is a bipartisan danger. I was critical of the ACA (Obamacare) since so many businesses were asking for and getting waivers. I was critical of the Dodd-Frank Act since so much regulation and enforcement is discretionary. Keep your mouth shut and support the administration is good advice in both cases.”
.. Protectionism — government coercion supplanting the voluntary transactions of markets in the allocation of wealth and opportunity — is socialism for the well connected. But, then, all socialism favors those adept at manipulating the state. As government expands its lawless power to reward and punish, the sphere of freedom contracts. People become wary and reticent lest they annoy those who wield the administrative state as a blunt instrument.
.. Tariffs are taxes, and presidents have the anti-constitutional power to unilaterally raise these taxes because Congress, in its last gasps as a legislature, gave away this power.
.. Noting that some Trump protectionism is rationalized as essential for “national security,” Cochrane, who clings to the quaint fiction that Congress still legislates, suggests a new law stipulating that such tariffs must be requested — and paid for — by the Defense Department: “Do we need steel mills so we can re-fight WWII? If so, put subsidized steel mills on the defense budget. If defense prefers to use the money for a new aircraft carrier rather than a steel mill, well, that’s their choice.”
Don’t Believe the Hype About Trump’s Trade Deal with the European Union
maybe intending it as a compliment—craftily packaged together a number of small concessions and previously agreed upon initiatives which allowed Trump and his allies to hail the agreement as an American win. “This is a real vindication of the President’s trade policy,” Wilbur Ross, the Secretary of Commerce, told reporters as he travelled to the Midwest with Trump on Thursday.
In reality, the Europeans gave up little except their prior refusal to negotiate under threat.
.. Juncker’s pledge that the E.U. would import more U.S.-grown soybeans, for instance, formalized something that was likely to happen anyway. After Trump imposed hefty tariffs on Chinese steel and aluminum products, earlier this year, China responded by imposing equally hefty levies on U.S. agricultural exports, including soybeans. That made American soybeans prohibitively expensive for Chinese buyers
.. Brazil, traditionally the E.U.’s largest supplier, is now shipping more of its produce to China, encouraging the Europeans to shop elsewhere. “While China concentrates its purchases on Brazil, the rest of the world turns to the U.S.,
.. Looking years ahead, Norway’s reserves have plateaued, and the Europeans will eventually need alternative suppliers. U.S. producers could well be among them. But, again, such a result may well have occurred without Wednesday’s agreement.
.. hopefully nobody tells Trump that these concessions were largely illusory.
.. Both sides provide subsidies or tax breaks to politically powerful groups, such as farmers, and to industries they deem strategically important, such as commercial-aircraft manufacturers in the E.U. and military contractors in the U.S. These policies proved sticking points when the Obama Administration and the E.U. engaged in unsuccessful negotiations about a transatlantic free-trade treaty, and they will almost certainly prove to be sticking points again.
.. One way to think of the outcome of Wednesday’s meeting is that Trump is happy to declare a victory whenever he can get away with it. However, a more optimistic reading of this week’s developments is that Trump has finally realized that he needs the E.U.’s support in his campaign against China’s much more overtly mercantilist trade practices, and that, in this area at least, the United States and Europe have common interests.
.. E.U. officials wanted to persuade the Trump Administration to pursue grievances against China through the World Trade Organization (W.T.O.), the global ruling body for trade disputes, rather than by dishing out tariffs unilaterally. The article also noted that Robert Lighthizer, the U.S. Trade Representative, a key player in the Trump orbit, is not necessarily averse to this idea.
.. “Comfortingly, there is mounting evidence that Mr Lighthizer is not out to torpedo the WTO,”
.. If Lighthizer could persuade Trump to go down this route, and his negotiating team could construct a common front with the E.U., there is a possibility that, sometime in the future, China might be persuaded to make some real concessions in areas like opening its markets and respecting intellectual-property rights. If that did occur, the Trump Administration could claim a genuine victory.
Who Cares about Truth Anymore, Anyway?
For Plato/Socrates, the philosopher is the guy who breaks free of the cave’s shackles and sees the reality behind the shadows.
.. Consider the articles of impeachment filed against Rod Rosenstein this week. I am not disputing that there are serious people with serious complaints about Rosenstein. But this was not the work of serious people. I would think that reasonable people could agree that impeaching any government official is a serious thing. Impeaching this official in particular, given the stakes and the controversies associated with him, is a particularly serious affair.
.. Impeachment, moreover, is not an appropriate remedy for Rosenstein’s alleged transgression of insufficient transparency. He, after all, works for the president, who is ultimately responsible for the information the Justice Department gives to Congress and who can order Rosenstein to disclose more on threat of removal. Congress is overstepping its authority in micromanaging the executive branch by seeking to impeach an official for refusing to turn over information that the president has not ordered him to turn over. Congress appears to have only once used the impeachment tool against an executive-branch official other than the president — in 1876, when it impeached Secretary of War William Belknap after he resigned for accepting bribes and kickbacks in office.
If the impeachers were seriously outraged — truly, seriously, outraged — by the executive branch’s behavior, they might be moving to impeach the executive.
.. Or, at the very least, they would be imploring the president to order Rosenstein to hand over these materials or to fire Rosenstein for refusing to do so.
They’re not doing that. Why? Because they’re putting on a show. This impeachment effort is a prop in the passion play, a talking point for Hannity’s opening monologues and the president’s Twitter feed.
.. for Trump, when we buy things from abroad — and by we, I mean individual citizens and firms in a free country — we are literally being “robbed.” Jacob Sullum on the president’s Iowa speech yesterday:
“Our trade deficit ballooned to $817 billion,” Donald Trump said during a speech to steelworkers in Granite City, Illinois, yesterday. “Think of that. We lost $817 billion a year over the last number of years in trade. In other words, if we didn’t trade, we’d save a hell of a lot of money.”
According to the U.S. Census Bureau, the president exaggerated the size of the 2017 trade deficit by 48 percent. But that’s a mere quibble compared to his fundamental misunderstanding of what that number means, which in turn reflects a zero-sum view of economic exchange that does not bode well for the outcome of a tariff war supposedly aimed at promoting free trade.
.. Trump’s trade defenders offer a verbal Escher drawing in defense of Trump’s trade policies. “Tariffs are great!” they say. “But Trump doesn’t really believe in tariffs, he wants “free trade,’” they add as well.Well if tariffs are great, why favor free trade? Why favor free trade if tariffs would save us a hell of a lot of money?
.. And the economists who say “that’s not how any of this works”are reduced to the nitpickers who complain that the most implausible thing about the TV series 24 is that the traffic in L.A. would make the whole story impossible. The nitpickers are right — it’s just that no one wants to hear it.
.. charismatic personalities have replaced — or are replacing — traditional institutions as sources of information, morality, and politics. There’s no better example in the moment than Alexandria Ocasio-Cortez, who strikes me as a kind of lame reimagining of a young Barack Obama with a woman in the lead. Cortez doesn’t know a lot about economics, beyond some handy buzz-phrases and shibboleths. She likes to brag about how she knows what the Gini coefficient is but thinks unemployment is low because people are working two jobs.
Trump’s Fake Fix for a Bad Economic Policy
What is driving the president’s apparent eagerness to impose tariffs is a simple and wrongheaded idea that plays to a large part of his base: A trade war will spur job growth in America. He is trying to use tariffs to give a leg up to American industries against countries that manufacture the same products that we do — whether steel, aluminum or cars — but more efficiently. And who could be against that if it creates more jobs?
.. In reality, however, creating jobs alone does not make for a strong economy. What we really want is to increase production. And to achieve that, we need to allocate labor as efficiently as possible.
.. One way to do that is to ensure that if other countries can make certain goods more efficiently than we can, we trade with them for these items, rather than manufacture them ourselves. The result is cheaper goods, which is to our advantage.
But tariffs do nothing to improve this efficient allocation of labor. They also do not increase or decrease employment. They just shift jobs around, and almost always in a manner that hurts the economy.
.. That is a $12 billion bailout using taxpayer funds for a problem the president himself created.