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Not all taxes are equal. Regressive ones suck.
Edit- but I would be shocked if the net effect of Trump's tariffs weren't regressive.
Edit 2- " redistribution side can be as progressive as you want, more than offsetting regressive collection if you wish." That's an infinite money glitch if true. Tariffs increase input costs that effect many downstream things, in addition to their direct price effects.
1. Security. You make your own bullets. You're able to make and maintain your own military hardware. When another country cuts supply lines in their own self interest, you have options to advocate for yours, either through trade, making it yourself, or, yes, even force.
2. Economic opportunity for your children and grandchildren. And no, not just "factory jobs" as is commonly sneered, but a community of experience and expertise. An engineer that gets to interact with the products they design in that kind of environment is a better engineer. A country that gets to see and interact with the products it makes has a sense of pride and better social cohesion.
3. Social buy-in and consequences for companies. A Chinese car manufacturer doesn't give a shit if cutting costs killed your grandfather. A local company has to, because the executives and workers are all members of the community. I was in Germany during dieselgate, and the sense of disgust at the company was obvious. They felt that.
These things are, imo, important to the health of any country, but they can only really be valued in retrospect. So yeah, tariffs are a tax, but some things are worth paying for even if what's being purchased isn't necessarily obvious or easy to quantify.
I would guess the optimal course to those ends would include some targeted tariffs. I am damn near certain that the optimal course isn't tariff-centric. Every option in a global economy (or any economy) is coupled and never limited to the first-order obvious effect.
As a very simple example that I see ignored often on here: High paying jobs are good, but increase the cost of the ouput. Consumers are also people, they benefit from lower prices. You can never turn one dial independently. There are pretty magical dials though, like education and trade. Some dials are better than other. All dials treated coarsely are worse than dials treated as the multidimensional optionalities they are.
I generally favor increasing productivity and QoL via net-positive interactions. I default to disliking fixed-pie-slicing until convinced otherwise. With all of the caveats to this position as above.
I mean, I admit that I'm not competitive with people desperate enough to work 12 hour days, 7 days a week, while the grandparents raise the kids in a 10 person household. But I'm probably capable of more sophisticated work due to my education and ability to specialize. Removing all barriers to trade essentially forces companies to offshore and train up nations that may not have your sovereign interests at heart in order to compete and provide a return for investors. It's a short term sugar hit that erodes the nation-state. This is why we strictly limit offshoring for certain strategic industries, but the truth is that all manufacturing industries are strategic to some extent, because they form part of a logistical web.
As for whether or not such a system is sustainable, it's worked for the world's manufacturing powerhouses for decades. The reason they're all falling to China now is because enough of the global supply chain has shifted there that it's now impossible to compete. Assuming those nations don't want to become services-based economies (which has been a disaster for Australia and the UK, neither of which can manufacture a tin of beans), protectionism is the only path forward. And indeed, China is utterly diligent in protecting it's own industries. This isn't fixed-pie-slicing, it's just pragmatic recognition that a government really does want to be able to fix the fighter jets when it needs to, and at some point, that means having enough industry in place to train the guy who does it. And economists, who don't really believe in or care about the problems of nation-states, probably aren't the right people to listen to when that's a concern.
The US is great, don't get me wrong, but the 1950-70s were based on an extremely fortunate combination of circumstances. It was almost certainly an exception rather than a norm to revert to. The resulting economy and middle class and mobility is aspirational, not easily reproducible. And I am certain not by pure protectionism. I mention this because you said repeatability, which I guess I assumed meant of this time that seems most aligned with what you want.
Edit- just re-read and you agree staying global competitiveness is important. Ok, how? I don't see any route there (in manufactured goods) without going hard on automation. I'm guessing (sorry) you basically think automation is bad because manufacturing jobs. Maybe we actually align here though?
I recommend to too many people the book "how the world got rich" https://a.co/d/0ehTVbK4. It's short, it's about what the dominant, generalized correlates with growth are. My insertion is that economic growth is good for everyone and explains without much exaggeration all good societal progress. Just as one concept from here that explains an enormous fraction of global economic dynamics, look up " catch up growth". Sorry if this comes across as you not already knowing about this, I recommend it because I personally found it such a good resource.
(1) This is me inserting a projection, I don't know for sure. I would need a lot of convincing that protectionism and isolationism makes us more competitive overall. I completely understand all of your arguments about skill and knowledge and that other good stuff I already agreed was good. What I don't agree with is that your approach leads to us being to compete in a global market, especially given domestic political reality. It seems your system relies entirely on being able to export. The one thing we do export btw is services, the thing you shit on. And again, I wish we weren't so dominantly service based. I want all the good things you want that come with manufacturing and more domestic self-reliance. I just don't think you can will into existence of a manufacturing dominant prosperous middle class 60s economy that survives global competition, which your export driven plan requires.
Edit- as another aside, I believe economics is increasingly a captured field. So I probably distrust economists on policy at least as much as you, in general. But when they all agree going back a while with data to back it, I weigh it higher. I also feel bad for economists because historically the actual policy they want isn't what makes it through, to the point the preconditions for their policy to work no longer apply. So again this is perhaps something we agree on. But this doesn't invalidate a bias toward free trade is wrong. Implementation matters. See: the parts I agreed on wrt international trade policy what feels like 20 replies ago.
Edit2 - one counter to my position is that with protectionism and manufacturing we can rely more on internal market demand more because we cover more of the market needs, like China is trying to do. Just thinking out loud trying to figure where I'm wrong. A lot of the good times were driven by internal markets. And this at first glance seems more consistent with protectionism. But you want export driven so I'm not sure.
You're focusing on the US, when what I'm saying is historically true for essentially every nation that ever industrialized. Many of those countries are still industrial powerhouses today. The US had a great run from the 50s to the 70s, but it was the world's largest exporter by 1914 thanks to WWI, and didn't relinquish that spot until 2003. Similarly, Japan and Korea didn't have any such luck and still managed to both develop and maintain high living standards even through economic hardship, thanks to their industrial foundations. Taiwan uses its chip industry, again heavily export based, as a shield. China is following the same playbook today, first during China shock 1.0 20 years ago, and now with higher value goods. The only real exceptions to this rule are Singapore and Hong Kong, both of which exploited the fact that they were strategic waypoints in global shipping. Even then, Singapore is one of (if not the) largest oil refiners in the Asia Pacific region, and exports a tremendous quantity of refined petroleum products. Singapore isn't strictly protectionist, but it makes heavy use of cheap Asian laborers who will never, ever be citizens, and it engaged in massive skills transfers from other nations during the 80s and 90s (my own family was part of that wave). And of course, the major European powers all built themselves on the back of protectionism and exports. The erosion of that directly resulted in the crises we see today.
I have no issue with automation, and I agree that investors and business will always want to exploit cheaper economic conditions elsewhere. What I'm saying is that any government that wants to preserve living standards and maintain an industrial base needs to have the backbone to tell those interests "No". They are part of the social fabric of a country, and the backbone of it's defense. Investors will make less money, but I don't see that as a bad thing. They would actually have to allocate money more effectively within a country to turn a profit.
I'm not shitting on services, they're necessary. But services can't manufacture bullets when you need them, and countries always need them eventually. Not to mention, we live in a time when even services being offshored, so what's left? We build houses and make coffees for one another, while banks and mega corporations that are beholden to no border lord over us?
For what it's worth, I agree with you that economics is a captured discipline, and I applaud your devotion to testing your own ideas. But the stuff I'm pointing out isn't economics, it's history -- things that actually happened. In my opinion (and it is just that) any economic theory that is at odds with history is straight up garbage.
So there will be no build out of manufacturing capacity. You’d be a fool to spend tens of millions on that when at literally any moment the market will revert back to the norm.
This administration’s policy making is insane. I’m surprised folks are still trying to sanewash it.
I'm not a free market fundamentalist. I also don't think we ever had a free market. Implementation details always matter. My standing policy is basically small informed perturbations around free trade, included targeted tariffs. Everything has tradeoffs. Restricting lumber from canada and fucking Americans? Not smart. Letting China openly steal from us? Asymmetric trade policies hurting the US? Also not smart.
The US could theoretically start doing things again, but it is never clear how to make that happen. The people much prefer to get free stuff (who wouldn't!?). Even if you can convince them otherwise, a lot of the institutional knowledge required to do things is gone. As capital moves to where it is most economically useful, the 'free stuff' economic structure has shaped where the capital is found. To move to a 'do things' economy would require turning the capital allocation upside down. To have all the pieces fall into place to see all that align just right requires great upheaval.
Maybe tariffs really are trying to be the catalyst to convince the people that free stuff isn't the way to bring on the revolution, but even if that's the case, that's a different environment to how tariffs were used historically.
Add that to the list of things I thought I'd never hear a conservative say.
Say what you will about the man, but Trump's takeover of the mainstream conservertive movement has been thorough, and eerily cordyceps-like.
Rayiner is a bad-faith troll who thinks he is being clever by doing the whole “oh, I thought you wanted to raise taxes, liberal??” thing. He does not actually think taxes are good.
"In Sweden, about 15% of people pay the highest marginal tax rate. If that was the case in the U.S., the top tax bracket would kick in above $120,000 household income. That makes total sense. These people are very well off and should be subsidizing the rest of the country."
I’ve been very consistent in favoring the Nordic tax structure, where you soak the top 40% but have low taxes on the super rich and corporations to prevent capital flight.
U.S. elections are a dynamic equilibrium where each party is trying to get to 51%. I live in Annapolis and the WASPs with boats viscerally hate Trump. But they were a core Romney ‘12 demographic.