All of the usual suspects are freaking out over Trump’s decision to impose tariffs on steel and aluminum. Most of it is by silly people. Some of it is simply the innumerate throwing yet another tantrum about the bad man who vexes them. Some of the hysteria is due to the fact that people in the chattering classes were sure they had talked this bit of reality into going away for good. Reality, however, is that thing that does not go away when you stop believing in it. The reality of trade is now back.
The amusing thing about trade debates among the chattering classes is that they never bother to mention the trade-offs that come with trade policy. Trade is like any other public policy. It is all about trade-offs. Our rulers, however, were sure they had sacralized their preferred set of trade-offs a long time ago. It turns out that the only people on whom this worked were the innumerate numskulls in the press. The rest of us remain skeptical about “free trade.”
Trade between countries is a net benefit to both countries. Open trade with Canada means they can sell more beaver hats and hockey sticks to Americans, thus making the typical Canadian richer. Similarly, it means Americans can sell more apple pies and boomsticks to Canadians, thus making the typical American richer. In reality, there will be Canadians who suffer from free trade with America and Americans who also suffer in the exchange. That is how the world works.
While the hockey playing folks of northern Virginia will benefit from cheap hockey sticks from Canada, the suddenly unemployed hockey stick makers in Minnesota are the ones paying the price for it. Similarly, the apple growers of Canada get stuck with the bill for the suddenly cheap apple products in Toronto. The hidden cost of free trade is a lot of people you do not know losing their jobs. When you are the guy getting the pink slip, the cost is not hidden and that has a social cost, as well.
Now, trade can be beneficial to both countries in that it promotes efficiency. The lazy and unscrupulous hockey stick makers in Maine, suddenly have to compete with the crafty canucks. This means better hockey sticks, but also less waste. Protectionism, like all public polices, comes with a cost too. That cost is more often than not carried by the consumer. Worse yet, it often promotes the sorts of corruption of public officials that erodes public trust in institutions.
That is why the ruling class is in a panic over the Trump trade policies. It is not about the cost of steel and aluminum. It is not about the possibility of retaliation. The real fear here is that Trump is re-opening the debate about trade. It means all of these trade-offs that come with trade between nations will have to be discussed. The billionaire class that has benefited from the current set of polices, is in no mood to defend their fiefs from the rabble. So, in waddles the clown army.
The current trade regime, has proven to be the boondoggle critics like Pat Buchanan warned about 30 years ago. Open trade with Canada, an English-speaking first world country, is mostly beneficial. Trade with Mexico, a third world narco-state that now operates as a pirate’s cove, has been a disaster. NAFTA has made Mexico a massive loophole in American labor, tax, environmental and trade policy. A loophole ruthlessly exploited by alien predators like China.
The current trade regime is also at the heart of the cosmopolitan globalism that seeks to reduce nations to a fiction and people to economic inputs. This neoliberal orthodoxy has eroded social capital to the point where the white middle class is nearing collapse. It is not just America. The collapsing fertility rates in the Occident are part of the overall cultural collapse going in the West. Slapping tariffs on Chinese steel is not going to arrest this trend, but it does open the door a debate about it.
That is the reality our betters would like to avoid. What defines France is the shared character and shared heritage of the people we call French. What defines a people is not the cost of goods or the price of labor. What defines a people is what they love together and what they hate together. It is the collection of tastes and inclinations, no different than family traditions, which have been cultivated and passed down from one generation to the next.
Even putting the cultural arguments aside, global capitalism erodes the civic institutions that hold society together. Instead of companies respecting the laws of host nations and working to support the welfare of the people of that nation, business is encouraged to cruise the world looking for convenient ports. There is a word for this type of work. It is called piracy. Global firms flit from port to port, with no interest other than the short term gain to be made at that stop. Globalism is rule by pirates.
That is the reason for the panic in the media. To question “free trade” is to question the arrangements that keeps the current regime in place. It may seem like a small thing, tariffs on steel, but it is the sort of thing that can unravel the entire project, because it legitimizes the sorts of questions that threaten the regime. To his credit, Trump seems to get this, which is why he has pressed ahead with this. He is flipping over an important table in this fight.
I import foreign steel for a living, lol.
Anybody got a job?
I had nothing to contribute to the discussion until I thought about US Oil production/Fracking etc.
All the regulations and “Gubmint Wisdoms” from our Global betters….
I still remember the “power of the Market” the day some self absorbed Trader sent the Future Price of Oil to a new Record. So he could frame his options….
Govt should do as little as possible. But always in the interests of the American people….
Fracking/Oil boom provided lots of jobs. Good pay. Hard hours & conditions. People went for that. Because it made sense to ‘them’. NOne of them asked what GlobalBetters thought. They moved/worked for their own advantage. The Global Orchestra doesn’t like peons organizing their own music….
IF it pisses off the ‘right’ usual suspects, it may just be good policy….
Do I discern a pattern here? Some jobs can’t just be transferred overseas. For the loggers, we need to use environmental restrictions like the spotted owl to put them on the unemployed roles. For the Roughnecks, drilling bans. Coal miners, environment again. Is somebody out to impoverish us?
The endgame of globalism is a social caste system in which a small cadre of elites rule over a slightly larger technocratic, managerial, and governmental class, another slightly larger group of professionals and specialists, and then everyone else is relegated to being drone worker bees (obedient, dependent, hive-minded). They need to take us there incrementally and by subterfuge, lest we notice and revolt. They are counting on the stupidity epidemic to enable this.
President Reagan put a tariff on Japanese motorcycles because Honda was dumping their bikes into the US at below cost.
They were making so much money on their cars they could afford to do this. The tariff gave Harley-Davidson ( the last american motorcycle company ) breathing room to retool and compete in the modern day market.
Forgive my simplistic blue collar observation to global economics, but when a foreign government operates in a manor to undermine a domestic manufacturer we owe it to our fellow citizens to protect their jobs.
“Trade with Mexico, a third world narco-state that now operates as a pirate’s cove for Chinese and American business, has been a disaster.”
Quite. The part I never hear mentioned is the fact that moving labor elsewhere, especially to third-world basket cases such as Mexico, was made profitable because the Democrat party and the federal government made Americans artificially expensive through ridiculous taxation, minimum wage laws, unionization, environmental ham-fistedness, etc; free trade just made moving labor elsewhere possible.
Another thing you pointed out with more words is that we are both producers (of our labor) and consumers.
When almost anyone talks about “free trade”, they say consumer goods would cost more. But they say nothing about the price of your product – your wage.
Free trade means working for a minimum wage with $5 T-Shirts, where as it used to be working a good wage with benefits where one earner could raise a family, but T-Shirts were $10. Cutting my wages by 3/4, but cutting my expenses by 1/2 is a losing propositon.
Using Canada for free trade is perhaps both a good and bad example as our legal systems are (or were) very similar. Way back when, you could cross over the border, e.g. Port Huron, MI to Sarnia, ON and the differences were hard to see, or subtle.
Canada has similar environmental and work safety and other regulations as America.
China does not. China doesn’t care if their workers get hurt. It lets the businesses dump toxic junk into the air and water. The government prints capital and gives land to factories.
Similar with Mexico.
You mean you actually want to wear safety glasses and use a safe lathe to cut metal – and get unemployment and health benefits? That costs money! Labor in China does without these things for a few dollars a day!
I ususally use the example of the store that has cheap T-shirts “made in China” and say I can get them for half that. We agree, and I go in, and return pulling out the package of T-shirts from under my coat. You object saying I shoplifted. I point out you have no idea how I got the shirts, and you don’t ask Fence-Mart how they got the shirts so cheap. I say it is all free trade and you can’t ask or bother with questions on why things are cheaper.
LOL – “free” trade. Whenever a “State apparatchik” “intervenes” in “trade”, what the HELLo is “free” about it?! Since the beginning of “mercantilism” with the ” Brutishs’ ” defeat of the Spanish Armada, COL (City of London) int’l corporatism has/is/will continue to dominate. The “United SNAKES Corp” is nothing more than the military enforcer of said. But, the Russians and Chicoms have had enough, and economically, financially and militarily, they be [justly] readying to “make amends”. Hoo-wah.
I made the free trade arguments while I was in grad school for econ. They’re pretty straightforward and, I now think, basically mistaken. Everyone who lost a job as some lower-level of manufacturing value was supposed to get an even better job at higher value manufacturing. Or maybe learn how to be a graphic designer.
It didn’t happen because it turns out most people simply can’t re-train themselves to do something different after having learned one type of skill. Somebody who has spent 20 years making carpet is supposed to learn to make airplane engine parts, or something?
Didn’t work. Mea culpa.
The good news is that all the local electricians, carpenters, painters, plumbers, floor refinishers, equipment dealers, roofers, masons, real estate agents — the whole kingdom of entrepreneurs who ground themselves in the community and earn local trust — are making great money these days; the transient globalist employees finding themselves in our town (a pleasant suburban village much sought after by white professionals) to satisfy their corporate masters, to raise their kids in a safe school, to pay off their absurdly expensive vehicles, and intent to sell their homes a few years from now at a profit, trust the recommendations of their neighbors and friends and hire the “local names”.
A great boon is right there, in front of our faces; the boon to young people who don’t care about ‘status’ but care – quite naturally – about well-paid work. No welder loses sleep over the robotics revolution. No decent housepainter or furniture refinisher does either. A couple of the hotter waitresses working the local diner probably make more dough in a week than the professionals “in transition”, trying to figure out what trick they have to learn to stay in the circus.
I know engineers who’d rather be searching for work for ten months than help a roofing contractor. And the pay is good; the thing is, they’ve been “programmed” to see themselves as ‘X’, and to not do ‘X’ violates the whole system of self-guilding. Better a proud if penniless guild-member than a dirty and exhausted prole making a grand a week while looking for “the right job”, and getting a good tan and six-pack abs in the meantime.
Well, I am an engineer, but a long time ago (…in a galaxy far, far away…) I did roofing.
It was, running away, the hardest work I have ever done. And it did NOT pay all that well – at least compared to engineering.
I am here to tell you that, if I have some other income and will not starve, You’re damn right I would rather not be a roofer. It’s not a matter of being programmed or “self-guilding”, it’s that at my age I wouldn’t last a day up on a hot roof – I would die of heat-stroke or from falling off.
Please don’t misunderstand me. I am not denigrating roofers. Far from it. The guy I worked for was a real professional who knew his stuff. (He was the go-to guy in our city for difficult roof jobs like church spires.) He made good money and hired a lot of people. But that job was definitely not for me.
The Fundamental Theorem of Free Trade is that “producing and distributing a product at the lowest cost” is good for humanity in general; it is Taylorism writ large. There is no room for local, regional or national loyalties and affections if the sole purpose of being alive is to produce and consume at maximal efficiency.
Free trade within, say, a town, is good; it means farmer Brown can’t charge a dollar more for a bushel of carrots than farmer Jones. But global free trade means that neither Brown nor Jones can raise carrots at all at a profit, because ADM is positioned to wipe both of them out. So they lease or sell their property and their former employees work at the local Dollar Store, where the glory of free trade is in full display: Chinese-made pens and lighters and toilet tissue, all for a buck.
“Socialism” within a town is also good; it means that the ill-favored among us get watched over and taken care of, that people don’t starve or freeze or lack company, that elderly widows get their sidewalks plowed. On the local level, “socialism” is nothing more than paying attention to people you know. We used to call this “church”. But of course “church” – never mind ‘religion’ – is getting kicked around from all sides; it is a stubborn ‘intermediate institution’ that impedes both global profit and global rule.
Capitalism and Socialism can live together in a town; “global” capitalism, and “global” socialism cannot live at all, because they choke our nature.
The tired old juxtaposition between ‘capitalism’ and ‘socialism’ must be stamped out, and quick. The war – I’ll call it the war of the human soul – is between gigantism and localism, not between doctrines.
So absolutely correct. Both capitalism and socialism work pretty well from the bottom up. But not from the top down, as there is too much room for massive graft and a big “skim” to be taken in the top-down versions.
The Federal government, by definition, is a “top-down” exercise. Hence the Constitutional structure and push for some level of autonomy at the state and local levels.
There was a time in the 90s, after the USSR stopped existing and books like Fukuyama’s ‘The End of History’ were read without laughter, when the ‘new world order’ stuff made sense to those of us “decompressed” by the end of the Cold War.
To admit that “free trade” agreements were music to our post Cold-War ears is like admitting to a porn addiction, and couldn’t possibly sound like anything but madness to young ears today. We were Americans; they are Oceanians. They just don’t know the distinction.
USSR or Oceania? Give me the USSR. Anything but what is to come.
Nice Philip K Dick quote
Your weight of the Canadian ‘apple grower’ is a distortion of real trade dynamics. Free trade could work if those are the only factors, i.e. the American hockey stick maker would switch to apple pie making, Canadian apple pie maker switches to hockey sticks. There shouldn’t be a loss of jobs on either side. The problem is governments subsidize the given industry making their costs lower than the free market would set. They cheat. It’s not free anymore, that’s how we get an imbalance. That’s what Trump is fighting. The hysteria will settle down and return to reality in time.
Why sure!! After all, the capital equipment for making hockey sticks and apple pies is identical, right? Just as are the regulatory hoops, right? And hell–ANYONE can run FDA-compliant QC after having QC’d hockey sticks for 20 years.
Yup. Piece of cake. Or pie.
In my real life, I have been ranting that everything you see around you is fake and manufactured. This tariff thing is one of them. Over at Conservative Treehouse they do a great, but interminably long and detailed, explanation of how “free trade” has been usurped by a gaggle of huge multinational enterprises, to squeeze the profitable segments of commerce from the ultimate end-users and the ultimate suppliers of products back to themselves, as the oligarchy of middlemen that own the system. The Trump tariff move is an opening shot to break down that oligarchy.
The other “fake news” of the day is the whole “school shooting/NRA/corporate shunning of weapons” movement of the last two weeks. Ace of Spades cites David Hines in a very important discussion of how the Left uses pre-positioned knowledge and strategies incorporating information warfare. It is a strategy of disarming potential enemies and shaming them over to their side of things. Delta Airlines fell for it, as did a bunch of others. The CNN hyping of these school kids did not just happen, it was mapped out in advance (they did not know which school would get hit or when it would happen, but they knew an opportunity would present itself). Hence the “scripted questions” and the quick assembly of an “anti-gun advocacy” round table program with the kids, disguised as news. Fake, fake, scripted and mapped out. Moving the window away from legal gun ownership. Anyone wanting to know how the world really works today must read this piece.
Sure enough, this morning’s Financial Times headline: “Consumers force businesses to take stand against NRA”. Wrong, wrong, wrong. Lies, knowing that they are lying (FT is the mouthpiece of the corporate oligarchy and the political elite). The information warfare element of the Left tricked businesses into criticizing and shunning the NRA, and the actual, real world consumers are now banging away, one by one, to let those businesses know how they really feel (one person commented that it took him three hours on hold to get through on Delta’s consumer input phone line to complain).
There is a level of mass deception and manipulation going on that is absolutely unbelievable in scope and breadth. Everything is fake. When the internet gets locked down, which it will (see China for how that is going to be done), we will really be in the dark. Enjoy and arm yourselves with free information while you can, because it will be gone soon.
“….The billionaire class that has benefited from the current set of polices, is in no mood to defend their fiefs from the rabble.”
Case in point, headline from today’s Omaha World Herald: “TARIFFS WOULD AID STEELWORKERS AT EXPENSE OF MANY OTHER. Larger industries from autos to aerospace and their 6.5 million workers could be hurt by move”.
The Omaha World Herald (among other newspapers) is owned by BH Media…….BH as in Berkshire Hathaway……..meaning Warren Buffett. Meaning readers can anticipate much more of this in the coming months.
By the way, great article today Z-Man. So if you haven’t kissed and made up with Trump over the 2A matter, as you at least holding hands? I’m thinking you are.
In Theory, free trade allows nations that ‘specialize’ to produce goods for other nations that specialize in something else. In reality, however, first world nations are universally ‘generalist’, it’s virtually a defining characteristic that they are self-sufficient.
Free trade attempts to destroy self-sufficiency.
Ok, I never took an economics course in my entire life so I’m a dope, but wasn’t it always possible to buy foreign specialty products? Which would mostly consist of luxury items like French wine, I suppose. I think G.K. Chesterton had a theory (distributism?) that the ideal is self-sufficiency of the community right down to the village level, which is sounding pretty good these days. Just don’t know how you would get there from here .. without an economic collapse, at least.
Tariff manipulation and time
So another policy or issue that was settled and done with actually isn’t. Good.
Say goodbye to the last of your libertarian friends Z, this stuff is sacrosanct even for the Mises institute guys, or should I say, especially.
“There’s a word for this form of capitalism. It’s called piracy. Global firms flit from port to port, with no interest other than the short term gain to be made at that stop. Globalism is rule by pirates.”
After reading that all I could think of was Monty Python’s Crimson Permanent Assurance. 🙂
Cheers
The old term for pirates was hostis humani generis, enemy of all mankind and the usual punishment was hanging
Wisdom of the elders I guess
The non-tariff trade barriers have affected me a lot more during my business years. I saw them strangle a lot of innovative young companies, on the front end because they couldn’t sell into Europe and E. Asia, and on the back end after the Asians had mastered the tech and took away their domestic sales.
Very hard to counter since “safety,” “environment,” or “RF interference” are usually the justifications.
I should add that the non-tariff barriers destroyed the sorts of high-tech jobs in high-growth industries that the free traders claimed would take the place of the old manufacturing jobs. I suspect that the non-tariff barriers are responsible for a fairly large fraction of wage stagnation of the past 45 years. I would guess third after flooding the job market with female labor, and illegal immigration.
not to mention cheap h1b programmers
This is another example of judging Trump by what he does, not what he says. He actually did this, on the gun issue he just said stuff. For me I’m still not sure if Trump is a genius or idiot, but when judged by what he does I still say he’s the best POTUS of my life. I’m 60.
It may turn out to be a bad marriage – but one hell of a honeymoon. To ponder the faces of the defeated in 2016 was to glimpse paradise.
Yes this. That alone was worth it even it’s the only part of the dowry we get to keep. That and a little time
“The fact is, a nation is its people.”
This is something our (((betters))) know and they get, first, the left, and then the right to deny. “A people” becomes “diversity”, which is more important than the nation. “Conservative values” is just another phrase to deny reality and celebrate intangible descriptions that have nothing to do with reality. The (((elite))) know that words have specific meanings. That’s why they spend billions to deconstruct those meanings and apply other words that, through their repeated use, become synonyms with reality based words. As Orwell prophesied, words are disappearing. The (((elite))) make words disappear, or at least the public usage of them disappear. They do this to eliminate heretical thoughts. How can you rebel when you have no words to communicate what you think? Can you even think that for which there are no words? Bad is ‘ungood’ and extremely bad is ‘doubleplus ungood’. This is how abortion, or murder, becomes “choice”. This is how “love” becomes that which agrees with the narrative, and “hate” becomes disagreement. This is a form of cognitive dissonance, and can lead to thoughtcrime for the few that have the God given ability to think. Everyone else just follows the herd and engages in the two minute hate for guns, homophobes, micro aggressions, racism, or whatever is the new fetish.
Israel has a lot of de-facto protectionism, because its neighbors won’t trade with them. Lebanese are excellent at business, as Latin America will attest.
Excellent post.
Economist Ian Fletcher has written about how the free trade orthodoxy doesn’t even work in economic theory much less practice.
The theft of intellectual property from American companies manufacturing in China is a known problem as is intellectual theft by Chinese students studying here.
The Pentagon admitted a few years ago that some of its supply chains just disappeared overseas. Even a free trader like Adam Smith acknowledged that defense needs came before free trade.
To all libertarians, conservatives and neoliberals out there, when it comes to trade among nations all trade is Government Managed trade. Free trade is a misnomer, even in Somalia.
It is necessary always to keep in mind that economic values are not the only values.
Tons of Boomers think the stock market gains will enable them to finally retire.
We have a WEENAH!
I was wondering when the root-of-all-evil “Boomers ™” were going to start coming out of the woodwork.
Besides which, at an average of about 200lbs apiece, it only takes 20 of them to equal “tons”.
And yet you still can’t eat an idea.
That is why economic values come before all of the other ones for an awful lot of people.
Thank you.
Note that NONE of the tariff critics ever mention such things as FLSA, EPA, EEOC, and US taxes (to name only a few burdens torturing businesses here.) NONE of them propose to eliminate–not just ‘reduce’–any of these costs.
That ought to be a hint about “who is really a Statist”, eh?
Yes or the social benefits freeloading by these companies that pay their employees minimum wage and who supplement it with SNAP, Food Stamps, and Medicaid – all of which are paid for by the US tax payer. Cost shifting at its finest.
I have an advanced degree in economics and know all the technical arguments for free trade. But I believe you have laid out the full perspective very well. One additional factor in favor of free trade is the exchange of advances in technology and medicine. However, since the US is dominant in this area, this benefit is enjoyed much more by other countries than us, and as you point out, is exploited by the pirates in China. There is also the real possibility that other countries will back down and lower their tariffs without significant retaliation.
The thing that never gets discussed is the impact on social capital. Cheap appliances in suburbia are half the transaction. The other half is the collapse of small towns and communities when the manufacturing base goes overseas. it’s not just the hard costs of welfare, unemployment and lost utility. It’s the cost of alienating the population from itself. Social democracy assumes a high degree of social trust. Remove it and the whole things starts to wobble.
Back in the early 90’s, working as a salesman, I sold a product to Fruit of the Loom. They had several manufacturing plants located in the Mid-South. I took a tour of one of the plants in one of the small towns. I think it was Campbellsville, Kentucky. It was a clean facility with a lot of folks, mostly black women, with sewing machines making underwear. It looked like a pleasant working environment.
A couple of years later, the CEO of Fruit of the Loom announced that they were moving all of those plants down to Central America because their competitors, such as Hanes had already done so. He stated that he didn’t want to do it, because of the job losses for Americans, but he had no choice.
I immediately thought of all of those black women, and what kind of jobs they could now possibly get in rural Kentucky and the devastation this caused to their families and the community.
This is why I have migrated from free trade libertarianism to the perspective Zman has laid out so well. We have wiped out good jobs for the hardworking lower class to benefit the elite. The extra fraction of GDP is not worth the loss of social cohesion. I worked for a shoe company in the 1990s as we closed dozens of Midwestern factories. Watching the nicest, most hardworking people in the country lose their jobs was heartbreaking. The opioid crisis is another side effect.
Same here. I grew up in Cleveland during the 79s and 80s and witnessed the collapse of industry and the subsequent social breakdown. The region has not and prob will not recover.
The funny thing is a Right Wing populist dictatorship could actually create a decent recovery
In the 1930’s 93% of the US economy was internal only and a government able and willing to basically gut trade and force work sharing could create a functional economy
It won’t be as prosperous as the post war period because of efficiency though, automation means we need less labor which means lower wages and less workers and do to global supply chain, we can’t export surplus production
An example highly non technical it might have taken 10 men to make 1000 units of steel and the demand was say 1000 with an export of a 1000 as well.
This allowed us to hire 20 guys (guy being all the guys we hire obviously)
Now it takes maybe 4 guys and we have no room for exports,
So even without Chinese steel we have 20% of the staff requirements and this effects every well paid trade
Short of smash the machines, there isn’t much hope forward till the energy runs out either.
We can’t even use social credit or handouts, that just leads to more of the rat utopia we already have.
Also without people having kids we don’t have much need for future consumption either. Despite the enormous size of Gen Y they have much less sex (twice as many have none at all) and nearly no babies with absolute numbers being at a record a few years ago
The only reason its functional at all is late term Gen X moms and medical science aside there can’t be that many
if a revolution occurs, it won’t help either, It could mean a having of the population and mass ruin in the cities . scaving more than manufacturing seems like a growth industry to me
That’s very interesting, connecting the opioid crisis to the lack of gainful employment for those best suited to various labor jobs. Self-respect and pride in a job well done are being stolen from millions of our upper lower classes by global pirates. It’s disgraceful.
Another thing: If acting in concert Americans quit buying “Chinese,” we’ll be accelerating the effect of tariffs, wouldn’t we? I’m asking the more economically erudite among us if I’m right on this one.
I blame the people putting shit into their bodies – not the “global pirates” who sell them the shit. This is (again) another case of “who drives the market – producer – or consumer?” – if you can’t get that right – then you can’t make any sensible economic calculations.
Want to piss people off? Then tell them they could easily make their lives better by doing one simple thing: stop moving their goddam arms.
Stop moving their arms shoving food into their already overweight bodies.
Stop moving their arms bringing another bottle of beer attached to the mouth on their already drunken bodies.
Stop moving their arms to bring the needle up to their armpit with no more good veins
Stop – just stop.
If you don’t understand what drives the market I’d suggest the following exercise: go start a business with your own hard earned money and try to sell a product that nobody wants. After you’ve pissed thru a few years of time and all your money trying to make it work: you will understand that it’s consumers that drive the market – NOT producers.
The next lesson in that exercise – is if the business actually starts working and growing – try hiring employees who are actually not screwups or outright stoned or drunk on a daily basis.
I have worked in high tech and specifically in start ups for a few decades now. You either show up and do the job – or you’re out. That’s the way it works. The pay is good though because of that. I have worked in other industries however – and know other people who run their own businesses – and I can tell you that there’s an awful lot of people with “arm problems” out there.
Any REAL discussion of economic problems in this country has to touch on the fact that there’s an awful lot of people out there with “arm movement issues”. There is something to be said from the business side of things – in dealing with a population that has a government boot on their neck – and therefore has none of those arm movement problems.
I personally believe the economic issues – are correlated with the political and social issues – and relate back to that saying attributed to Franklin (although I think somebody else actually said it) – where he said we had a government only fit for a good and virtuous people. You can’t run have a government that isn’t a tyranny – or a productive economy – when you’re dealing with a bunch of corrupted immoral people. So the economic problem talked about in this column also relates back to the same issues Zman also talks about constantly : the immigration issues and rise of all the other leftist crap.
A good and moral people probably would not have ANY of these issues – no matter how hard the cloud people tried to push it on them.
The devil only sells his bullshit to people who are willing to listen.
“If acting in concert Americans quit buying “Chinese,”
People have understandably advocated for this from the beginning; decades ago. “Buy American”
But the problem is game theory. First movers suffer (thru loss of buying power) and just can’t/won’t sustain it. And too many just won’t, as they’ll make the choice that maximizes their own buying power. Cheap stuff is just too enticing.
And so we need top down measures to put everyone on the same footing, and then reap the longer term and more society-wide advantages.
The other side of that equation is: Are people willing to pay more for underwear made by black women in Kentucky?
I doubt it. When people go to underwear store they’re typical buying behavior is: ” The Hanes are cheaper than the Fruit of the Loom – I don’t give a shit if a bunch of fat black women in Kentucky lose their jobs”
One of the only places I’ve seen a concerted effort to retain local industry – is coming out of what are typically lefties. Around here – it’s not uncommon to see “No Farms No Food” bumper stickers. They’re usually on a Subaru driven by a lesbian. But at least they put their money where their mouths are and they buy local. Many towns around here have farmer’s markets – and have setup land conservancies to prevent farm land from falling into the hands of developers who use them to put up sub divisions.
Local news and lifestyle programs will also very commonly have segments about local farms, breweries – etc. Where things are made local.
This is why I mentioned that machine tool thing in my other post here. There is an underground revolution seemingly brewing in manufacturing. With things like 3D printing slowly getting better – and the spread of inexpensive machine tools – and the ability to share CNC programming over the internet – it’s becoming feasible to have actual local manufacturing – where instead of having to ship shit by the containerload from China – you might just buy a design – and have your local CNC house churn out whatever product it was that you wanted.
Like I said before: more complicated than you think.
They will if the answer is less welfare, less social dysfunction and better communities. The people in charge, our so-called elites, are supposed to make these arguments. They are supposed to explain the trade-offs.
The trouble is our elites lied to us and now we are facing a huge bill that may never be repaid.
Yes, less welfare, less social disfunction, and better communities. And it’s not just the towns that the Fruit of the Loom plants are located in. We sold them the little paperboard inserts that kept the package of underwear rigid. Many millions of those pieces. Think of all the other suppliers and materials from other companies in other communities and the families that were involved in producing a product like underwear. It’s a domino effect.
“The people in charge, our so-called elites, are supposed to make these arguments. They are supposed to explain the trade-offs.”
But, but, MUH MARKETZ..
I would add that QUALITY is a “sell-able” difference. Notice that the pockets in your jeans are smaller than they were 10 years ago? That the light jacket you wear only has 3 pockets in front, not four?
That the el-cheapo underwear chafes because it’s smaller by a few centimeters?
Yes – to *some* people. But when you don’t know or don’t perceive what the quality differences are – you buy on price. The real way to get high prices – is to sell on status.
Women will pay $1000 for a pair of Louboutins – when most other manufacturers can’t sell a pair of women’s shoes for more than about $100. Mercedes used to sell for a high premium over here – even though almost the exact same car could be bought in Germany cheap enough to be used as a taxi. Look at what Apple does with their products. They’re getting a premium because people perceive a status value attached to them.
I learned long ago to not buy crap. It’s *usually* not worth it. I buy a lot of equipment and tools – and learned many decades ago that cheap crap will burn you one way or another. But – I don’t see an awful lot of people with the same attitude. They buy on price. That’s why price drives the market.
You must be dealing with different people than I deal with. People are economically ignorant – otherwise they wouldn’t think that they could continuously add to the national debt without any bad affects.
I have had the tax debate with more people than I care to remember over the last 3 decades – and made the same exact point you just made above: namely that we should cut taxes and get people off welfare and the almost universal response goes something like ” OMG! – cut taxes – we won’t have any roads! People will die in the streets! How will the old people have healthcare!!”
The urge to “get a good deal” overrides pretty much everything else in my experience. From watching the wife cut coupons and feed us crappy food just because it’s cheaper, to dealing with probably hundreds or thousands of people selling stuff personally on places like Craigslist and Ebay as well as in my professional life dealing with customers in a business setting………. the push for “cheaper” is relentless. It’s only after people get screwed over numerous times by buying cheap shit – that they finally wake up.
The issue here is : who drives the market? Customers – or manufacturers?
There’s already a lot of data out there that women drive something like 70 to 80% of consumer purchases. Which is in the end what drives the economy – so how much sense do you think is being put into 70 – 80% of purchases? Pretty much all the women I know are one of two things: either relentless cost cutters and coupon clippers – or – they’re relentless spenders who think that spending makes them look better.
I’ve also made the case with numerous people that the costs in this country are out of control because of government spending. Therefore your wages are high – and make you uncompetitive with the rest of the world – because of the taxation levels necessary to support that. I think it was a column of yours that alerted me to a column of Vox Day detailing how much black welfare costs the average white family over time. Combine that with the cost of all the wars and assorted other govt. programs – and you can pretty easily see where the problem is that makes us uncompetitive on wage rates.
Then there’s the workers. We are where we are for a reason. Anybody who’s been alive long enough to have driven American cars back during the 70’s 80’s or 90’s – knows what pieces of shit they were. When I bought my first new car – I looked VERY hard at all the options available out there – and bought Japanese. A large part of that was due to previous experience with US built automobiles – AND having known *union* auto workers and their attitudes.
I didn’t see any reason why I should be busting my ass to buy crappy product made by overpaid people with bad attitudes. If some Japanese guy wants to bust his ass and die at his desk building me a high quality product – more power too him. Better than sending my money to an overpaid Democrat voter in Detroit.
Like I said before : more complicated than you think.
I’ve seen a discussion of building cars (CARS!!) to order with 3D printing. Multiple small shops, only 5-10 employees, just-in-time “pull” theory manufacturing.
That’s a ways off, if it ever happens–but that’s how much 3D is influencing thoughts on production.
The 3D printing thing is still a ways off in regards to building parts of the same quality as we get now out of the traditional methods IMHO. It’s good for prototyping and making small plastic parts – but large runs of metal parts are still better made using currently existing methods.
Manufacturing however has changed enough that it is possible to get “specialty” cars built with almost the same level of quality that you can get from any of the large auto companies.
Some classic American muscle cars – like Mustangs and Camaros – can now be built from the ground up using *almost* all parts as brand new. The body shells are being stamped out overseas – and all the other components to produce the car are also being produced. This is because there was such a high demand for restoration of the originals – that over time an industry grew up to manufacture replacement parts or suitable substitutions. The revolution in machining tools and CNC technology – which made the machines affordable (which means they come from China or other places overseas) – has helped hugely to make this possible.
There’s also “kit” car companies like Factory Five – who build quality cars that hobbyists can build in their garage. They are good cars – far better quality than the “kit” cars people think of from the 1970’s. But – they are basically loophole vehicles. Not substitutions for mass produced vehicles. They COULD be substitutions as their quality is high enough that I believe that locally built vehicles could be produced – BUT government regulation prevents this. Modern vehicles are highly complicated and expensive to replicate as a DIY exercise in your garage. The complication is in large part driven by government regulation. Go ahead and try to buy a vehicle off the showroom floor with no airbags, no ABS, or any of the other “safety” features that are now MANDATED.
I know the custom / hot rod / kit car / performance automotive market pretty well having followed and been involved in it since the early 1980’s – and I can tell you for a fact that it would not be anywhere near where it is now (SEMA says it’s a $41 billion dollar market) – without the ability to source things overseas.
Again: this issue is more complicated than you think
Ultra local manufacturing is the end of modernity as the only need we have for scale is making the manufacturing machines themselves
If a community makes all it needs locally or nearly all of it, what use is D.C as its configured
None really which is why D.C. will use violence if they can to keep control
Reminds me of V is for vendetta
If I am sure of anything, Mr Finch, it is that this government will not survive if it is to be subject to your feelings. Mr Dascombe, what we need right now is a clear message to the people of this country. This message must be heard on every radio, read in every newspaper, seen on every television. This message must resound throughout the entire InterLink! I want this country to realise that we stand on the edge of oblivion. I want every man, woman and child to understand how close we are to chaos. I WANT EVERYONE TO REMEMBER WHY THEY NEED US!
It’s more complicated than that. The manufacturing base is coming back – just not as big smokestack industries. Because of the spread of relatively inexpensive CNC equipment that runs on open source G-code – there are small machine shops popping up all over the place. These people are reliant on machine tools largely manufactured in China or Taiwan – since there is almost no lower end machine tools available any more that are built in the US. If you go up past say $40k – then you will start finding machining centers built by Haas – and others , right here in the US.
High quality machining is spreading literally into people’s basements because of companies like Tormach which manufacture lower end CNC equipment that sells in the $7k to $20k range. This is affordable for people as a “hobby”. I tell people this – and they ask me what I’m smoking. “Who can afford $20k ?? ” – is the typical answer.
Every idiot who buys a Harley is my response. Or go look at how many people buy ATV’s – now go research pricing. $60k for a pickup truck. $5k TV sets. It’s not about affordability – it’s about choices. Some people choose to spend $10k on a machining center and make shit in their basement. Like “ghost guns” – which is another bugaboo of the left.
These things would not be happening – without affordable machine tools – which pretty much universally come from China.
This is why I say – the problem is more complicated than that.
The problem with attacking the “free market” is that it’s not (a free market that is). Like most things the cloud people have gotten hold of – the words used to describe it mean nothing because they’re a propaganda lie used to sell whatever it is they’re really doing.
Cue Bastiat’s “seen vs. unseen” observation. Of course, in the case of US trade policy, it’s “seen vs. what they don’t want you to see”.
More like oscillate like a brigde with broken wires
The weak social democracy in the US is in part do to our lack of common culture, Black/White race issues of course played a hefty factor but so did mass European immigration
A US that was basically entirely Anglo and Protestant would be much higher trust even than the 1950’s were not that we had that for more than a couple of decades
This kind of ties into the gun control push as well
The cloud people desperately want to disarm the dirt people before the dirt people make them pay for wrecking the country
An example,. New York which because no one will obey the gun laws there wants to limit ammunition sales to 20 rounds every 90 days which is highly unconstitutional to say the least
Its getting to where I hear “we may lose the fight but the body count will be epic.” as a regular thing as well as shifting to an understanding that big corporations and groups are the problem as well,
It won’t be that much longer before people realize that its not an “individual” problem with an individual solution but a collective one with a collective action, collective solutions and collective punishment by voluntary groups a must
This will lead to very dirty war and the worst part a lot of people will be fine with this and will relish killing Commies (short hand here for cultural and practical Marxists, globalists ,Leftists , foreigners et all) too. Its a long time coming
Ignoring the obvious domestic nightmare I can’t imagine the effects on the globe, China maybe if they get smart could benefit as could Russia but everyone else is going to go tits up and thew world will go batshit crazy if the guaranteer of global peace ends up going Bosnia x Rwanda and worse ends up either crippled from the fight (the Left somehow ekes out a victory) split into many nations or simply exhausted and completely inward focused , poor and near autraky
I wonder if the consolidation of economic power is tied to the free trade ideology. We’ve had a massive centralization of financial and economic power in this country. Apparently no one believes in antitrust any more, and global trade is what these firms want. Interestingly enough, Robert bork played a role, and not a good one, in this.
http://www.theamericanconservative.com/articles/robert-borks-america/
Steel policy in the first GWB administration is one of the few things I look back on and think was done right. He put a tariff on imported steel and the WTO eventually forced us out of it, but it lasted long enough to allow the remaining US steel companies to regroup and retool with electrical and gas equipment to remain viable in the race of the dumping that was and is still going on. He took a ton of flak mostly from the “right” over that. The Chinese know that no country without its own steel industry, or lacking in resources, can be a viable war threat. It was why it was so wrong for us to be exporting steel to Japan in the 1930’s.
I had an argument with one of my son’s economics professors over it. A libertarian against any trade restrictions at all. He would not acknowledge the practical or strategic side of the argument. At the time I didn’t know it, but he was requiring his students to buy textbooks and workbooks that he himself had written. A monopoly. No free trade there. Hypocrite.
Another point is that free trade as it is usually discussed is highly theoretically utilitarian and justified retrospectively with respect to any controls.
Compare the corn laws of England to the grain policies of France in the eighteenth century. English policy seems to have been directed towards giving incentives to domestic production and rewarding it with bonuses for surpluses allowing exportation and mild, but effective tarrifs. It was strategic.
French policy focused almost exclusively on prices and was reactive to both external and internal pressures, and resulted in periodic shortages and bread riots off and on, despite having much more arable land. The lack of incentives towards productivity resulted in the primitive state of agriculture described by Arthur Young. One thing mentioned by almost no one is the fact that the disincentives were so bad (there was a tax on having teams of horses for plowing, but not on oxen– much slower and less efficient) that I would go so far as to say that, in addition to the Bank of England, agriculture policy decided the Seven Years War.
By the time Cobban and his allies got the corn laws repealed these strategic considerations had become irrelevant. If they had been repealed earlier England would have lost the Seven Years War, or in the next case would have succumbed to Napoleon’s Continental System.
Free trade exists only in the vacuum that is the libertarian mind.
Trump buddies were told prior to the announcement that he would lower tariffs, so they liquidated their interests in the nick of time to avoid losing money.
Hmmmmmmmm.
The problem I have with Globalist/Eeeeevil Joooo conspiracy theories is that the supposed conspirators and their leaders often aren’t smart enough to find their ass with both hands!
We have to remember the cloud-dwelling globalist oligarchs are at each other’s throats the way Canadian hockey stick manufacturers are with their counterparts in Maine. They are not yukking it up in the bar after work together – although their pawns and peons might. They may work together occasionally, but you can bet they have a plan to kill their adversaries when the time is right.
The production glut is now acute. America has no real need to trade in manufactured goods, nor do Canada or anyone else in the first world. Our manufacturing centres can fulfill all our own market requirements plus those of our external markets in the 2nd and 3rd world. Problem is – those markets are shrinking now too as they become more industrialized themselves. There are adverse pressures and market upheavals that even the billionaires have to deal with.
I think our Cloud people will be going to war shortly – and taking us along with them for the ride.
Its not a conspiracy. Just a commonly held set of strategies, beliefs and objectives. When you get enough people who believe and act in a similar way, what you get looks and functions like a conspiracy.
This is actually how a hive works..every ant does its own thing. There is no central command. But the actions of every ant are controlled by instincts, and since every ant shares the same instincts and behaves the same way, you get emergent behaviors. Every ant functions like a single neuron, and the interactions of every ant turn the hive into a kind of brain.
Yes! Too many people (even some quite smart ones) just don’t understand emergent order/phenomena. Therefore everything ends up looking like a conspiracy of “those who rule us all.”
Of course that doesn’t mean there aren’t some conspiracies carried out by evil actors. In fact I’d say that many of these situations start out as emergent phenomena and then are exploited by the evil actors.
An ethnic mafia that specializes in working close to the throne and across borders is exploiting a niche. Anyone outside the Family is just a mark. No need for unnatural genius in any of this.
Apple receives millions of used iphones on trade-ins every year in Europe, USA, etc.
Consumers in India generally cannot afford new iphones.
Apple planned to resolve these two issues by selling used iphones in India for $100 each.
India was appalled at the threat to its local industry. Its response was not a tariff – it simply banned Apple from selling used iphones in India.
Trump is doing a terrible job selling his trade-retaliation – there are many disgraceful practices like the one above, especially in India and China, that he should highlight. The U.S. has the most open markets in the world – to call retaliation against China etc. “protectionism” is absurd.
Larry: To say anything about used cell phones in India would be rayciss.