71–80 of 81 posts
> I don't know if you're being intellectually dishonest on purpose That crosses into personal attack. Please edit such bits out of your comments here, and follow the rest of the guidelines as well: https://news.ycombinator.com/newsguidelines.html . Edit: We detached this subthread from https://news.ycombinator.com/item?id=17718957 and marked it off-topic.
> I don't know if you're being intellectually dishonest on purpose That crosses into personal attack. Please edit such bits out of your comments here, and follow the rest of the guidelines as well: https://news.ycombinator.com/newsguidelines.html . Edit: We detached this subthread from https://news.ycombinator.com/item?id=17718957 and marked it off-topic.
Edited
> I don't know if you're being intellectually dishonest on purpose That crosses into personal attack. Please edit such bits out of your comments here, and follow the rest of the guidelines as well: https://news.ycombinator.com/newsguidelines.html . Edit: We detached this subthread from https://news.ycombinator.com/item?id=17718957 and marked it off-topic.
Earlier quoted context omitted.
Yes this is critical - free trade benefits the economy/country as a whole but the benefits do not accrue evenly across society. Laymen have basically been saying this for years while being ignored by the ruling elites but economists have been slowly starting to get on board. Even post Trump I suspect that the global attitude toward free trade will become much more nuanced than it had been over the past 20+ years.
No economist has ever claimed that global trade is Pareto-optimal inside nations. It's well known fact that some industries suffer and some thrive. It's just that the total sum is positive. The trade shocks should not be handled with tariffs or restricting trade. It's domestic policy issue.
Earlier quoted context omitted.
No economist has ever claimed that global trade is Pareto-optimal inside nations. It's well known fact that some industries suffer and some thrive. It's just that the total sum is positive. The trade shocks should not be handled with tariffs or restricting trade. It's domestic policy issue.
The issue is that distributional losses historically have been significantly underestimated in terms of scale and persistence or glossed over as insignificant. Economists traditionally have held that workers who lose their jobs to free trade, while losing their job in the short term, find a new job elsewhere and ultimately are better off. This is turning out to not be the case, some workers persistently remain worse…
So of course the worker who over-invested in job A and was compensated based on that over-investment is going to be worse off in job B when he/she has under-invested in the skills needed for job B.
The fields that are best for workers today are those that have built in required continuing education, or fields in which rapid change is widely acknowledged and understood by the workforce (software engineering, etc.)
Earlier quoted context omitted.
In which case, I'd much rather we increased taxes on income and/or wealth to a) help workers move up the value chain, and b) provide a safety net for people who lose out on trade. A tariff on "cheap shit from Amazon" is a heavily regressive tax, and acts to reduce total delivered value. Whereas taxing the well-off to pay for education and encourage investment increases total delivered value.
How does taxing the well-off to pay for education encourage investment?
But I'm thinking we would use the money to more directly encourage investment. Small business programs are good here, including classes, mentoring, and small-business loans.
Earlier quoted context omitted.
I believe that brookhaven_dude means that low US tariffs are good for US consumers because that keeps prices low for them. Whereas high foreign tariffs on US goods are in effect a tax on foreign consumers, meaning they get less for their money.
> Whereas high foreign tariffs on US goods are in effect a tax on foreign consumers, meaning they get less for their money. When prices are higher, consumers buy less. So those foreign consumers are indeed getting less for their money- so they will buy less US Goods, reducing the money coming to US producers. Instead, those foreign consumers will buy local goods at lower prices.
For the benefit of HN readers, no serious economist supports tariffs in any form. Tariffs appeal to the naive idea that trade imbalances between two nations are a bad thing. They simply are not a bad thing. But due to the political history of tariffs it becomes possible for politicians to claim (falsely) that tariffs will benefit the economy, when in fact they are (at best) a handout to specific industries. What real…
> The understanding that tariffs are foolish is a universal among economists and is not remotely a partisan issue. The obvious endgame is not for the US to keep these tax increases. The administration stated the goals fairly clearly, and almost(?) none of them are controversial: https://www.whitehouse.gov/briefings-statements/president-do... Tariffs are leverage. Economists not liking them is a lot like an economist…
We're told that finally a master negotiator is at the helm and that he will renegotiate trade deals that leave the US at a disadvantage.
One data point that offers evidence counter to that view is the president's vocal opposition to NAFTA, a deal that resulted in a large (mostly) free trade zone and lower tariffs on US goods than on those from the other participants.
I think the most likely explanation is that the tariffs are viewed as a way for the executive branch to unilaterally redistribute wealth to key swing states that have been hit hard by globalization.
If your speculation is true, then the administration must believe not just that escalating tariffs will move trade negotiations to the brink and will allow the US to negotiate freer trade... but it must also believe that the negotiated freer trade will be economically significant nationally AND to the swing state areas hit hard by globalization.
It is my understanding that if the above is true about the administration's beliefs, that the numbers quite obviously do not add up.
So while the US would certainly be better off with freer trade, the economic cost of tariffs is not enough to move the needle economically in a significant way (per an analysis done by Reason magazine). This directly contradicts the claims made by the administration.
So unless there is a deep factual discrepancy between the analysis conducted by Reason magazine and the analysis the administration is doing, the tariffs seem intended mainly as a tactic to rally key groups of voters, and there appears to actually be no broader strategic significance or possible negotiated outcome that would achieve the goals the administration claims will be possible via the tariff escalation.
That said, the tariffs are probably a smart way to try to win a few elections. They allow the public to view other nations as adversaries and to rally behind the US "winning" over other nations. They also prop up the fiction that trading partners are in fact adversaries rather than cooperators. Such adversarial rhetoric is obviously a useful political tool.
So since this kind of us vs them, zero-sum rhetoric has been such a key element of the administration's message, I find it unlikely that it would ever seem desirable to remove the tariffs and to reframe the US relationship with other nations as constructive rather than as adversarial. Why give up such a useful enmity if it's working politically?
My concern is that the tariffs will cause unexpected and sudden economic harm, which could quite suddenly cause a lot of the players to lose their perspective and actually begin to act adversarially.
FWIW tariffs also reduce trade cooperation between nations and reduce the disincentive for armed conflict.
Earlier quoted context omitted.
Yes this is critical - free trade benefits the economy/country as a whole but the benefits do not accrue evenly across society. Laymen have basically been saying this for years while being ignored by the ruling elites but economists have been slowly starting to get on board. Even post Trump I suspect that the global attitude toward free trade will become much more nuanced than it had been over the past 20+ years.
No economist has ever claimed that global trade is Pareto-optimal inside nations. It's well known fact that some industries suffer and some thrive. It's just that the total sum is positive. The trade shocks should not be handled with tariffs or restricting trade. It's domestic policy issue.
This is an important point, and I think plays into the question about tariffs (which, to be clear, I think are probably net negative).
The conventional argument is that free trade is a Kaldor Hicks [0] improvement, not a Pareto improvement. KH means that the sum of benefits and costs is positive, and it would be possible (in principle) to tax the beneficiaries and pay off the people harmed and create a synthetic Pareto outcome.
You could view tariffs as a clumsy attempt to apply the Kaldor-Hicks concept. I personally think there are much better ways, but I think the argument is at least plausible.
[0] https://en.wikipedia.org/wiki/Kaldor%E2%80%93Hicks_efficienc...
For the benefit of HN readers, no serious economist supports tariffs in any form. Tariffs appeal to the naive idea that trade imbalances between two nations are a bad thing. They simply are not a bad thing. But due to the political history of tariffs it becomes possible for politicians to claim (falsely) that tariffs will benefit the economy, when in fact they are (at best) a handout to specific industries. What real…