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Post by graybeard on Sept 25, 2010 20:34:23 GMT -6
Finally, a common sense approach to tariffs: ..."Leaving aside the bogeyman of a trade war--which China is unlikely to start as the nation running the trade surplus and thus the nation having something to lose--this raises the obvious question of whether tariffs are a plausible long-term solution to America's trade problems. What would happen, that is, if America reverted to its historical norm (from Independence to after WWII) of being a tariff-protected economy?" "The obvious question here is what kind of tariff are we talking about? As I have documented in other articles and in the book Free Trade Doesn't Work, there are any number of valid criticisms of the economics of free trade. There is not one thing wrong with it, but at least half a dozen things, and they get complicated very fast. As a result, the nightmare that haunts criticisms of free trade in this country is this: what if these criticisms imply that America needs a complicated technocratic tariff policy? This seems to be suggested by the complexity of the defects in free trade and by the fact that the nations which have most successfully repudiated free trade actually have complicated technocratic tariff policies. That would spell trouble, as the political difficulties of achieving such a solution in America are no secret. The dangers of a special-interest takeover are not imaginary. Even if America has in the past done a lot more successful picking of winners than laissez faire ideologues are prepared to admit, it's so hard to convince people of this fact that we might as well take the pessimistic assumption that this is not feasible as our baseline, and if it later turns out to be feasible, treat it as gravy." www.huffingtonpost.com/ian-fletcher/is-a-flat-tariff-the-answ_b_738956.htmlwww.usbic.net/ianfletcher------ I commended Mr. Fletcher in an email, and his maybe automated reply asked about me and whether I had seen his book. Here's my response: I'm a retar'd avionics engineer who has agonized over watching our catastrophic imbalance of trade grow over the last 30 years. I'm glad to finally see some honesty on the subject, and I'm pleased to see the positive comments to your article on Huffpost. Sorry, haven't seen your book, and I'm not a book buyer or reader. I will visit your site and link it to another site of like minded people, however. 100% inspection of imports - paid by the importers - may be easier to sell to conservatives than tariffs, and it will accomplish much the same, while increasing safety. It can be done. GB
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Post by unlawflcombatnt on Sept 26, 2010 2:39:10 GMT -6
I say we raise Tariffs to a level we anticipate will completely eliminate our non-oil trade deficit. And to start with, we err on the high side, with Tariffs that are higher than what we anticipate will be needed.
As a guideline, we would start with 100% Tariffs on everything that comes in from China. So if they export $320 billion into the US, then their total Tariff would be $320 billion. We could impose this across the board on every single item imported from China--a 100% Tariff on everything.
If that level proves to be too high after say 5 years, then we would lower it some.
Of course this violates WTO rules--which is just another reason why we should withdraw from it--ASAP.
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Post by fredorbob on Sept 26, 2010 5:51:32 GMT -6
100% inspection of imports - paid by the importers - may be easier to sell to conservatives than tariffs, and it will accomplish much the same, while increasing safety. It can be done. GB A) No it won't be easier to sell to the Neocons, they are thickheaded fuckwads. B) It won't generate revenue.
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Post by waltc on Sept 26, 2010 11:01:21 GMT -6
Conservatives in general will oppose any and all measures that will impede trade with China.
As far as they are concerned it's perfect as it is.
About the only way you can get tariffs or trade reform of any sort through, is for the Conservatives in this country to slit their collective throats, because they will fight tooth and nail to allow China to continue dumping toxic and low quality goods into the country.
And no they don't care if the goods kill Americans, they only care that some rich man is making a fat profit. That's been proven time and time again.
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Post by fredorbob on Sept 26, 2010 19:12:12 GMT -6
Conservatives in general will oppose any and all measures that will impede trade with China. They're neocons, not conservative.
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Post by waltc on Sept 26, 2010 20:38:46 GMT -6
Fredorbob
It's a distinction without a difference since the GOP is owned by Wall Street and the bankers just like the Demoncrats are.
Sure you'll find a few conservatives/Republicans that are concerned but they certainly out numbered by the fanatical free trader supporters. Because of their low numbers, concern isn't reflected by any GOP politico or even the Tea Party types, let alone the party platform.
All the years I was I republican I never heard a one the GOP commentator ever condemn free trade or urge trade reform. Ducan Hunter is the only one who had the balls to condemn it, but he's shunned by the party faithful.
It's a cryin shame too.
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Post by fredorbob on Sept 28, 2010 9:11:21 GMT -6
Fredorbob It's a distinction without a difference since the GOP is owned by Wall Street and the bankers just like the Demoncrats are. Sure you'll find a few conservatives/Republicans that are concerned but they certainly out numbered by the fanatical free trader supporters. Because of their low numbers, concern isn't reflected by any GOP politico or even the Tea Party types, let alone the party platform. All the years I was I republican I never heard a one the GOP commentator ever condemn free trade or urge trade reform. Ducan Hunter is the only one who had the balls to condemn it, but he's shunned by the party faithful. It's a cryin shame too. Sorry, I don't speak newspeak.
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Post by unlawflcombatnt on Sept 29, 2010 10:26:42 GMT -6
Graybeard,
I went to the Huffington Post and actually read the entire article about Flat Tariffs. It's actually pretty good and makes some good arguments.
A flat Tariff on all imports would reduce claims of favoritism of one industry over another. This would rebut many of the arguments that it's "unfair" to some industries. It would be much simpler to administer and harder to game the system.
It would also give domestic industries only a fixed amount of protection, thus not allowing them to raise prices without limitation, lest they raise the price to a higher level than the post-tariff price of the import.
I'd exclude only Aluminum, Oil, and critical Rare Earth Metals from Tariffs--since we don't have sufficient supplies of these in this country, and never will. (I would not exclude either coffee or bananas, as these could likely be grown somewhere in this country if the incentive was high enough).
I'd start much higher with the Tariffs than the author's suggested 30%. The US has gone many years with Tariffs over 40%, sometimes even as high as 45%.
We should start at a minimum of 40%. Add to that the 100% inspection of imports, or at least something close to that.
And we could still outright embargo selectively, if the situation called for it--especially for safety reasons. For example, there should be permanent embargo on Chinese-produced heparin. There should be a permanent embargo on Chinese-produced children's toys and pet food.
We could also implement some highly-selective temporary embargoes--to help "jump-start" (or re-start) some of our domestic industries and create jobs in those areas. For example, we could temporarily embargo fully-assembled computers--thus instantly increasing the demand for and employment of American computer assemblers.
On the other side of the coin, a 40% Tariff on imported Chinese pharmaceuticals would not keep most of them out, since they cost only a fraction of the retail price to actually produce. This would prevent the massive price-gouging that occurs today with US Big Pharma.
(On a side note here, as per US Customs law, an American pharmaceutical company can legally import a cheap Chinese drug into the country. But the same is not true for an individual or a retail pharmacy. Neither an individual nor a retail pharmacy can purchase the same drug import. In other words, only the manufacturer of a specific drug can import his competitor's less expensive version of his own drug.)
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Post by graybeard on Sept 30, 2010 5:23:58 GMT -6
Thanks for reading and reporting, unlc. I, too, am guilty of failing to read a link before commenting on it. I like you added ideas, and share your frustration with Pharma.
GB
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Post by fredorbob on Sept 30, 2010 23:44:57 GMT -6
Graybeard, I went to the Huffington Post and actually read the entire article about Flat Tariffs. It's actually pretty good and makes some good arguments. A flat Tariff on all imports would reduce claims of favoritism of one industry over another. This would rebut many of the arguments that it's "unfair" to some industries. It would be much simpler to administer and harder to game the system. It would also give domestic industries only a fixed amount of protection, thus not allowing them to raise prices without limitation, lest they raise the price to a higher level than the post-tariff price of the import. I'd exclude only Aluminum, Oil, and critical Rare Earth Metals from Tariffs--since we don't have sufficient supplies of these in this country, and never will. (I would not exclude either coffee or bananas, as these could likely be grown somewhere in this country if the incentive was high enough). What? Oil Shale, coal to oil, and tarsands competes at about 70 dollars a barrel. Nobody is going to invest because oil regularly drops below 50 dollars a barrel. There is enough to last a thousand years. An adjustable tariff to keep oil imports at just above competition price for these alternatives (real alternatives not glassy eyed Green Commie alternatives) would work. When oil gets real cheap on the worldwide market (which it would if the US didn't import so much), then the feds could buy up huge quantities to fill up the strategic oil reserves at a bargain basement price. We'd fuck these camel jockeys instead of them fucking us. And aluminum is the most common element in the earth's crust, it just takes huge amounts of energy to purify.
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Post by unlawflcombatnt on Oct 1, 2010 2:12:59 GMT -6
What? Oil Shale, coal to oil, and tarsands competes at about 70 dollars a barrel. Nobody is going to invest because oil regularly drops below 50 dollars a barrel. There is enough to last a thousand years. An adjustable tariff to keep oil imports at just above competition price for these alternatives (real alternatives not glassy eyed Green Commie alternatives) would work. The point is that an adjustable Tariff would be difficult to pass and implement because everyone subject to it would be whining that those not subject to were being singled out for preferential treatment. A flat Tariff reduces such claims, if not eliminating them entirely. Since we are importing much of our oil--for whatever reason--and that this is not likely to change in the near future, we need to exempt oil from the flat Tariff. The same holds true for aluminum. Regardless of what the reasons are for our non-production of aluminum, we import almost all of what we use, and thus need to exempt it from a flat Tariff.
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Post by jeffolie on Oct 1, 2010 5:36:57 GMT -6
I agree that Flat Tariffs are good.
Flat Tariffs meets the KISS standard = keep it simple, stupid
Flat tariffs just may have a chance in politics because voters get bored with numbers and ignore political arguments based on numbers but may agree to a trade war using flat tariffs. I see that in California one campaign ad that is being repeatedly shown against a US Senate TeaBagger with very big private funding is that the TeaBagger laid off 30,000 workers (the ad shows a video of the TeaBagger admitting to the layoffs and the TeaBagger suggests that this work should be done overseas) and sent those jobs to China. This tells me that the financially weaker Democrat is spending scarce money on a jobs/trade issue and gives me hope for Flat Tariffs as a political issue.
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Post by graybeard on Oct 1, 2010 8:10:26 GMT -6
It's simple enough to exclude all raw materials from the Flat Tariff. Importing crude oil, aluminum, copper, etc., means we are doing things here to add value to them - a good thing.
Extracting oil from shale is environmentally worse than coal, from what I've seen lately, and extracting natural gas is poisoning water supplies, and also worse than mining coal.
Imported raw food products, especially, need 100% inspection.
GB
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