What We're About to Re-Learn the Hard Way

Both of the nonentities running for the Presidency are fans of tariffs, one much more so than the other. Unfortunately, the one who seems more likely to win imagines that trade wars are the path to prosperity, the Great Depression to the contrary.

Economist Don Boudreaux has been debating the matter with a Trump-aligned commentator, with one of his salvoes being titled, "Tariffs Don't Save Industries." The whole thing is worth a read, but most notably for the following warning and factual correction it contains:

If for whatever reason American consumers come to attach less value to (say) American-made aluminum, artificially arranging to keep resources tied up in producing aluminum in America will prevent resources from being channeled into uses that are more productive. Because the productivity of resources determines their market values, and because the result of artificially protecting industries from competition is to lower overall productivity of the nation's industrial base, the protectionism championed by Oren Cass would decrease, not increase, the economic size of America's industrial base.

Not only is Cass's economics wrong, so too are the facts that he presumes. In reality, America's industrial capacity -- the ability of the American economy to produce value in the form of industrial outputs -- is today at an all-time high. This capacity is now 11 percent larger than it was in December 2001, when China joined the World Trade Organization, and 145 percent larger than it was in 1975, the year in which America last had an annual trade surplus. This reality is very difficult to square with Cass's assertion that under a regime of free trade economic decision-makers fail to appropriately value the factories, mills, mines, and other inputs that form the nation's industrial base. [italics in original, bold added]

Given a President's ability to change tariffs unilaterally, Trump's economic platform (if you can call something so dependent on one person's whims a platform) is potentially far worse than Harris's, given some of the hikes he has touted from the stump.

It is too bad that the left has behaved so irresponsibly in its hegemony over our cultural institutions: To the degree that its past misdeeds inure average people to such warnings and even to simple statements of fact, it will share responsibility with the monster it created for whatever difficulties we end up facing during a second Trump term.

-- CAV