Your predictions are antithetical to more than 100 years (1816-1967) of real world experience as the most tariff protected nation on earth.
You are clinging to an Ivory Tower theory. In the real world tariff protection made us wealthy while free trade has resulted in declining prosperity for the vast majority of Americans. Enough Americans no longer believe the myth of free trade to make #Trump president. Are you also a member of the Flat Earth Society?
If you take the real (inflation adjusted) wages of American blue collar workers from 1947 to their peak in 1972 and project the trend to today and compare that trend line number to what they have failed to gain the wage loss is greater than the lower prices, if any, from free trade. The last time I did that calculation the required wage increase was 80 percent. It varies from month to month but unlikely to change much. I used a least squared fit in a PERL script. Let me know if you get a different number.
To the extent that free trade produces lower prices then those lower prices would tend to push real (inflation adjusted) wages up yet blue collar wages today are below what they were in 1972. The inescapable conclusion from that fact is that combination of price and wages have worked to the disadvantage of American blue collar workers.
Let me also point out that there exists no peer reviewed economic analysis proving free trade produces lower price. Moreover, the lower prices argument assumes that consumer price is directly related to cost. Economic theory says that is wrong. Price is determined by what the market will bear not cost of production. Consider the margins Apple gets. If Foxconn charges them less to assemble them are they really going to reduce price below what the market will give them? The same considerations apply if #Trump requires #Apple to make them here.
First realize that you are the victim of the "Boogie Man is going to get you if we have tariff" propaganda campaign. You will know you are ill informed if any of the following is something you do not know. The first act of the first Congress was to impose tariffs on imports. All of the presidents on Mount Rushmore signed tariffs into law. That includes Thomas Jefferson who is well known to oppose tariffs. He had to pay the nation's bills. Every Republican presidential candidate from Abraham Lincoln in 1860 to Alf Landon in 1936 ran on a platform of tariff protection. From 1816 until 1967 the United States was the most tariff protected nation on earth during which time none of the Boogie Man is going to get you bad things actually happened. From the end of the Civil War and 1900 tariffs seldom went below 30 percent and occasionally went above 50 percent. During that time, contrary to the free trade shills, consumer prices went down, employment and wages went up, and we displaced free trade Great Britain as the most advanced industrial power on earth.
The only people claiming Smoot-Hawley exacerbated the Great Depression are a bunch of liberal arts majors who can not read and interpret data. International trade started to decline in June 1929. Smoot-Hawley was passed a year later in June 1930 but did not go into effect until a year after that June 1931. When Smoot-Hawley started collecting additional tariff 80 percent of the trade decline had already happened.
The United States is a trade deficit nation. As such it is not possible for us to suffer long term harm from a trade war. A trade war would benefit the American people.
Free trade is a Ivory Tower theory that is antithetical to the real world experience of the United States.
Calm down, ignore the Boogie Man, and let the good times roll.
Latest Comments
Trump Part IV – The Causes And Uses Of An Economic Crisis
Your predictions are antithetical to more than 100 years (1816-1967) of real world experience as the most tariff protected nation on earth.
You are clinging to an Ivory Tower theory. In the real world tariff protection made us wealthy while free trade has resulted in declining prosperity for the vast majority of Americans. Enough Americans no longer believe the myth of free trade to make #Trump president. Are you also a member of the Flat Earth Society?
Trump Part IV – The Causes And Uses Of An Economic Crisis
If you take the real (inflation adjusted) wages of American blue collar workers from 1947 to their peak in 1972 and project the trend to today and compare that trend line number to what they have failed to gain the wage loss is greater than the lower prices, if any, from free trade. The last time I did that calculation the required wage increase was 80 percent. It varies from month to month but unlikely to change much. I used a least squared fit in a PERL script. Let me know if you get a different number.
To the extent that free trade produces lower prices then those lower prices would tend to push real (inflation adjusted) wages up yet blue collar wages today are below what they were in 1972. The inescapable conclusion from that fact is that combination of price and wages have worked to the disadvantage of American blue collar workers.
Let me also point out that there exists no peer reviewed economic analysis proving free trade produces lower price. Moreover, the lower prices argument assumes that consumer price is directly related to cost. Economic theory says that is wrong. Price is determined by what the market will bear not cost of production. Consider the margins Apple gets. If Foxconn charges them less to assemble them are they really going to reduce price below what the market will give them? The same considerations apply if #Trump requires #Apple to make them here.
Trump Part IV – The Causes And Uses Of An Economic Crisis
Calm down.
First realize that you are the victim of the "Boogie Man is going to get you if we have tariff" propaganda campaign. You will know you are ill informed if any of the following is something you do not know. The first act of the first Congress was to impose tariffs on imports. All of the presidents on Mount Rushmore signed tariffs into law. That includes Thomas Jefferson who is well known to oppose tariffs. He had to pay the nation's bills. Every Republican presidential candidate from Abraham Lincoln in 1860 to Alf Landon in 1936 ran on a platform of tariff protection. From 1816 until 1967 the United States was the most tariff protected nation on earth during which time none of the Boogie Man is going to get you bad things actually happened. From the end of the Civil War and 1900 tariffs seldom went below 30 percent and occasionally went above 50 percent. During that time, contrary to the free trade shills, consumer prices went down, employment and wages went up, and we displaced free trade Great Britain as the most advanced industrial power on earth.
The only people claiming Smoot-Hawley exacerbated the Great Depression are a bunch of liberal arts majors who can not read and interpret data. International trade started to decline in June 1929. Smoot-Hawley was passed a year later in June 1930 but did not go into effect until a year after that June 1931. When Smoot-Hawley started collecting additional tariff 80 percent of the trade decline had already happened.
The United States is a trade deficit nation. As such it is not possible for us to suffer long term harm from a trade war. A trade war would benefit the American people.
Free trade is a Ivory Tower theory that is antithetical to the real world experience of the United States.
Calm down, ignore the Boogie Man, and let the good times roll.