Why Industrial Policy Is (Almost) Always a Bad Idea (with Scott Sumner) 12/9/24

Рет қаралды 2,030

Күн бұрын

Tariffs are in the air. Will they help or hurt Americans? Listen as economist Scott Sumner makes the case against tariffs and various other forms of government intervention that go by the name of industrial policy. Along the way he looks at some of the history of worrying about the economic and military dangers posed by foreign countries.
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Пікірлер: 30

@Kyzyl_Tuva Ай бұрын

Russ, it is VERY difficult to restart a manufacturing industry / process that has gone away. Case-in-point: semiconductors. There was a time when 90% of the semiconductor fabrication was dome in the US. That has been declining over the past 40 years where now it is single digit percentages. Now with the CHIPS act, as more fabs are being built in the US, the largest hurdle is finding skilled engineers and others to build these chips. There is no local memory and process experience of that industry.

@UncleV-ot7fy Ай бұрын

What a load of bull. There are plenty of engineers and workers in the US. I'm one of them. 90% of chip designs, chip making processes and process equipment, chemical and substrate inputs for the chip making are made in the US. Sending all this to TSMC is welfare for Taiwan, which has run its course. Now it's all staying in the US, ,and it's called "TSMC investment in Arizona".

@Kyzyl_Tuva Ай бұрын

@@UncleV-ot7fy You are a tiny percentage of the semiconductor workforce compared to the past. 2024: less than half what it was in 2001 (which was even less than the late 1980’s - 1990’s). I am very involved with the TSMC facility in particular and they cannot find enough qualified workers and are staffing with their engineers from Taiwan.

@UncleV-ot7fy Ай бұрын

@@Kyzyl_Tuva Yeah, it's called "autotherapeutic fantasies of being wanted. Here: www.gao.gov/assets/gao-18-69.pdf , page two is for you. They overdo Line 8 in an attempt to avoid Line 4.

@DF-ss5ep Ай бұрын

Good common sense points that are missing from the news, and sometimes even social media. Personally, I wouldn't even acquiesce to subsidies to kick start industries even when they seem like a slam dunk. They come at the cost of opening precedents and mis-educating the public, and there's money in private markets for that sort of thing anyway.

@FlamingBasketballClub Ай бұрын

Russ should do a podcast episode on the following topics for 2025: 1) 80th anniversary of United Nations. 2) The importance of medical freedoms, human rights and food sovereignty. 3) Zionism as a political ideology. 4) Regenerative Animal Agriculture. 5) The hypocritical nature of virtue signaling. 6) Lesser known geopolitical issues.

@xwarrior760 Ай бұрын

26:09 We'll put a link on that interview Never puts a link to that interview lol

@craigb4913 Ай бұрын

I'm for free trade in theory. But in practice nations manipulate currencies, subsidize producers, erect non-tariff barriers, and take advantage of our adherence to a free market ideology. It ends up increasing returns on capital at the expense of returns on labor (wages).

@bozimmerman Ай бұрын

Economists are well aware of everything you mentioned. Trade economists spend their entire lives studying and thinking about this one subject. That's what they do, and they've been doing it since Adam Smith wrote a little book on the practical impact of free trade. I recommend investigating their work and their reasoning. Listening to this podcast is a good start.

@craigb4913 Ай бұрын

@bozimmerman Thanks for the reading recommendations that you apparently think will make me think like you do. I'm familiar with many of the ideas of Smith, Ricardo, Keynes, Hayek, Friedman, Krugman, Sowell, et al. They've been right on some things and wrong on other things. Theory rarely tracks perfectly with practice. And aside from right or wrong, there are few policies that benefit every person or group of people. There's nothing more common than people (usually elites) claiming their ideology & policies are beneficial to everyone. Individuals and groups have different values and interests, aside from maximizing efficiency and GDP. The interests of different sectors need to be balanced, so should the interests of capital & labor, white collar & blue collar, producers & consumers, importers & exporters. Which individuals & groups will get the policies they want is more of a political question that economists can't make with their quantitative models and theories. Doctrinaire free traders have been promising their ideas will result in "a rising tide to lift all boats" for years. They've been tragically wrong, and many of us can see that.

@casualobserver2997 Ай бұрын

Sorry, Bo is right on this one. You out yourself by basically stating that politics should pick winners and losers. That rarely works as intended.

@dbladeford Ай бұрын

@@casualobserver2997 You didn’t articulate what Bo was right about, and Bo didn’t clearly establish his position; instead he recommended reading the work of prominent author/economist from the past instead of challenging his perspective.

@casualobserver2997 Ай бұрын

Okay so what's your perspective. You took the time to reply but didn't put forth anything.

@stevecobb2997 18 күн бұрын

Great to hear others citing my favorite examples of the USSR and Japan: those formidable chess and go players who think strategically, several moves ahead, unlike us short-term shareholder-value consumerist Americans. You'll recall that the big scary technology of HDTV, where Japan led, and which got overtaken by events and obsoleted. You guys fail to mention that while countries *overall* benefit from free trade, certain groups may benefit from restrictions, under the old familiar "concentrated benefits, diffused costs" phenomenon. Such self-interested groups will always find creative justifications for government intervention, always relying on passions like nationalism and xenophobia.

@johncronin6977 Ай бұрын

Japan and South Korea both developed under heavy government control (Industrial Policy) , or state led capitalism, not the “invisible hand“. The government actually built steel mills, chemical plants , armaments factories and heavy manufacturing businesses like shipyards and auto plants. These businesses were subsidized, funded, and sheltered by government action, NOT the free market. They were only exposed to foreign competition slowly as they matured. This destroys the free trade/free market, libertarian argument that only the private sector can grow the economy and not the government.

@Bob-be2pj Ай бұрын

The record of free trade economists is obvious: the decimation of our mfg capability, making us vulnerable in foreign conflicts, drugs and alcoholism, weak family structure and more. I've stopped listening these economists who have lost credibility.

@bozimmerman Ай бұрын

You think U.S. Manufacturing output is 10% of what it was, in, say 1960? I suspect you might be confusing Man. output with Man. Jobs. Also, blaming wildly unrelated phenomenon to one thing based on intuitions and coincidence is just silly and unscientific. Do umbrellas cause rain?

@casualobserver2997 Ай бұрын

Our manufacturing output is higher than it was during WWII, it is just more automated so employs less. Protectionists think this is bad, but if you ask if we should go back to using only manual labor for food production they will of course say no. Lots of cognitive dissonance on the protectionist side.

@johncronin6977 Ай бұрын

Bureau of Labor Statistics destroys the free trade mythology that good paying manufacturing jobs lost to free trade were replaced by better paying jobs in the “knowledge economy“. Basically we’ve traded millions of family supporting, stable, high paying manufacturing jobs for millions of unstable, low paying service jobs that can’t support families and often require the workers to go on public aid to make ends meet. Free trade libertarians are also in favor of mass immigration of cheap labor to undercut our wages and living standards… Free trade has been a disaster for average Americans but a bonanza for the elite class