Hughesair (Inflection Point)

Retired physician and air taxi operator, science writer and part time assistant professor, these editorials cover a wide range of topics. Mostly non political, mostly true, I write more from experience than from research and more from science than convention. Subjects cover medicine, Alaska aviation, economics, technology and an occasional book review. The Floatplane book is out there. I am currently working on Hippocrates a History of Medicine and Globalism. Enjoy!

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Saturday, March 24, 2018

Tariffs, the Argument Against

In the world of Globalism,  tariffs must not exist, they must be hidden and indeed they are. The US for 2017 averages a 1.3% tariff which is not reported in the Daily Treasury Report, DTR. The argument against tariffs comes from all sides, but sounds more political than statistical or historic. In an ideal world, trade would be fair and balanced and yield greater economic gain for all sides. The argument continues that a trade war would cost consumers far more for products, and the jobs gained would cost far more than the economic benefit from jobs gained. Economists, academics, the media and big business all advance this argument that tariffs are categorically bad and bad for the economy, and a trade war will be bad for all of us. China has beat us in a trade war for decades. Could it get worse?

Few numbers support the argument against tariffs, other than an elaborate estimate of the exorbinant economic cost of saving a single job, but you must ask, what is a single life worth? The cost of unemployment to the tax payer runs far beyond the value of the job lost, and with families, that lost job has a multiplying effect. Furthermore, the economic loss resulting from a tariff falls all to the supply side, to the companies that exploit cheap foreign labor and move manufacturing abroad while the benefits fall entirely to the market side, increasing both the market liquidity and the GDP. The purchase of imported goods detracts from the GDP whilst the purchase of American made goods adds to the GDP. There must also be some considerable value in moving sequestered capital from the overly wealthy supply side to the market side, a redistribution that is hard to achieve in an otherwise equitable way.

Critics insist upon a harmful effect to the overal economy and people as the total population, yet tariffs have a long US history exercised at many average percentage levels. When you line up the tariff rats along side of th GDP that harmful effect is not evident; in fact, some would say the opposite.

Interesting times, the teriffs will play out one way or another and we will see.

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