President Trump: The NEW one and only politics thread

If somebody else can make something cheaper than you, why do you *want* to make it? It's smarter to let them make it and focus your energies on something only you can make. Then you have both the thing you made and the profit from it, which you can use to buy the cheaper thing.

Do you grow your own food or do you buy it from the grocery store, where it's cheaper and easier than making it for yourself? Do you build your own car from a kit or do you buy it from someone who does it cheaper and faster? The same principle applies to countries.

"we don’t make anything anymore."

This is something that so many people believe and it's just wildly untrue. The United States is the world's second largest manufacturer. We make a shit-ton of stuff.

 

Inside Atomwaffen As It Celebrates a Member for Allegedly Killing a Gay Jewish College Student — ProPublica

 

Working on that right now.

We do both. We grow carrots, beet roots, bell peppers, cucumbers and a handful of other vegetables. Red bell peppers are EXPENSIVE AS HELL in the grocery store, and growing them ourselves (and using the seeds for next year) is much cheaper than buying them at the grocery store.

 

And that's cool. I love growing home gardens. But same principle applies. You've looked at your situation, given your available resources, and realized you have a comparative advantage there. You aren't declaring that any red bell pepper brought into your house from a grocery store must be paid for at 25% more than the official price in order to make it more fair for your home garden.

 

Buddy, old pal, look in the opposing mirror.

 

But isn't the trade-off laid-off workers who see their jobs going to $2-an-hour workers south of the border? That's a big part of the problem we're trying to solve, right?

I'm not seeing the giant conundrum here. If I can buy $125 worth of steel from an American company and the same amount of steel from Mexico for $100 with a 25 percent tariff, who's getting screwed here. (Granted, I have no idea how prices differ in the real world when vast differences in wages are factored in.)

 

Re tariffs, I suppose that it needs to be said. We're talking about Trump. Next week these tariffs may be a dead issue.

Remember two days ago when he was for gun control?

 

Most economists will tell you that the end result is that any improvement in revenue the steel industry sees from a tariff won't come from dollars that would otherwise be in Chinese pockets, but from dollars that are already in American pockets. The tariff effectively raises the price of steel in America, which positively impacts the profit margin of the steel industry, but negatively impacts the profit margin of every American industry that purchases steel to use in its products. To continue operating at current margins, those industries raise the price of their products to a level that negates the added cost of production, and the higher price of steel ends up being paid for by the consumer. In such a world, the end result of announcing a tariff on foreign steel is no different from the government announcing that all of us are henceforth required to forfeit X percent of our paycheck so that the steel industry can have it.

The reality is that the death of manufacturing in America has stemmed from the import of finished goods, not raw materials. In theory, this will only exacerbate that price difference of items manufactured at home versus abroad, because the steel in the items manufactured at home now costs more. Think about it from the perspective of an automobile manufacturer.

 

It's not that simple. Part of why overseas steel and aluminum is cheaper is that the companies there invested a lot of money in the very latest high tech manufacturing equipment which meant that they could make more product less expensively. Add in cheaper labor. The companies here ran the numbers and chose not to try to compete.

Dumping at below cost is a legit issue - although I'd submit that if they want to sell it to us cheaper than they can make it, we're winning on that exchange as well. We're just not winning on the manufacturing end of it.

 

Bell peppers are expensive, they can be almost $2 each. But if we used dirty coal to power our electrical needs we can drive down the hot house cost of producing them. Strip mining is cheaper and without those stupid environmental protections it can be even lower. Stupid solar power only works during the day, am I right? And if we drill for oil where we can find it, the shipping costs will be lowered. Just think, you can save maybe 40-50 cents a week. Also, smog, air and water pollution will come back so we will live shorter lives. Lower costs and shorter life spans will make the dollar go farther or is it further?

 

In the long run, the workers that would have been used in our steel production go do something else instead. That's how the economy grows. It's why we aren't all employed as hunter-gatherers.

In the short run, yes, it sucks for those workers. The best way to address that harm is through social programs that redistribute wealth to them. Voluntarily making *less* wealth for the country (which is what tariffs do) is a particularly stupid solution that makes the country poorer.

*You're* getting screwed, because you could have had $25 left over to spend on something else. And now the business that would have gotten that $25 from you doesn't get it. And so the supplier that would have gotten that $25 from them doesn't get it. Etc., etc. You're voluntarily shrinking the economy.

I'm trying to think of an analogy that might work for someone not versed in economics. Imagine you need to assign a story to fill 20 column inches to a freelancer. One freelancer will give you 20 column inches, the other will give you 15, for the same amount of pay. But the second one has a parent who is friends with your publisher, so your publisher forces you to hire him and fill in the last five inches with jabberwocky. You're getting less for the same resources, the readers are getting less, everybody loses except for the guy who you were forced to hire. The newspaper would be better off if the publisher butted out, you hired the best guy for the job, and you had the other freelancer go fill in agate or something.