Why Smart People Are Rightly Confused About Tariffs | Mark Thornton

[@spacepan]

I refuse to believe any smart person is confused about tariffs

[@markthornton9128]

What percentage of the population would you consider economically literate?

[@spacepan]

@@markthornton9128 Everyone understands that making things more expensive makes things more expensive. It's an indoctrination problem more than an illiteracy problem

[@LeonidRosenboim]

This podcast is a perfect example of a very smart person caught in his ideological narrative, hence unable to offer objective analysis. Ergo confused.

[@Oatriumph]

​​@@LeonidRosenboimNo, you're confused. No, he's confused... 🥱

[@Oatriumph]

It's only morality that confuses them.

[@tcoursey2315]

If tariffs are “always” bad, where is the discussion about US exports being tariffed by other countries???

[@markthornton9128]

Excellent question! I may have to do a separate minor issues episode on this topic. Thank you for bringing it to my attention.

[@jakelm4256]

That’s to the detriment of those countries imposing the tariffs. Think of a hypothetical city where the people produce goods for the entire country- yet they altogether refuse to buy any goods made by everyone outside the city. They’re essentially engaging in slave labor to make the whole country wealthier since they are not exchanging the money they received for goods themselves.

[@lights473]

Of course that's also bad, but leading by example is what Britain did even while other countries had tariffs and overtime tariffs in those countries also lowered or went away. Tariffs are a response to conflict between countries rather than cooperation. Lead by example, show you're not the enemy and others will follow. And even if they persist, Americans are still better off when you have fewer tariffs.

[@BlackJesus8463]

Two wrongs don't make it right.

[@markthornton9128]

@@lights473 bingo! That is an excellent response.

[@craxd1]

What's so complicated about it? A tariff is essentially an import charge (duty) levied on an imported good, which the Gov keeps. It's designed to either equalize the price of what that import sells for, when compared to a US product, or to make the import higher to protect manufactured goods in the US.

[@markthornton9128]

There is just tons of propaganda out there by historians, unions, etc.

[@lumpyrex007]

Those manufacturing jobs are still not coming back. Labor costs too much. All you're doing is making it more expensive and increasing the cost of living.

[@darbyheavey406]

@@lumpyrex007Will China build US Navy aircraft and frigates? Of course not. We need an industrial base and if Apples profit margins need to shrink that’s the price we pay.

[@user-nn6gy4rd3z]

A lot of the people arguing for tariffs in this comment section apparently want a large and powerful government to intervene in the economy, using tariffs to manipulate prices and play favorites. It is pretty sad to see so many people not believing in the free market anymore. I guess it is the Trump effect.

[@rockstarofredondo]

@@lumpyrex007 they will be forced to come back and the factories will end up in low-wage states, right where that infrastructure already exists.

[@DonaldDeCicco]

A tariff has a simple definition and it has a simple purpose. However, threat of a tariff is more complex and nuanced.

[@BlueWaterSTAX]

We will pay the tariff. More inflation

[@ironcityblue]

Tarrifs on imports are far superior to an income tax.

[@user-nn6gy4rd3z]

Yes, but the income tax needs to be eliminated before enacting the tariffs. Otherwise, you are just being double taxed. Unless the income tax is abolished simultaneously, I wouldn't be so enthusiastic about supporting Trump's proposed tariffs.

[@BlackJesus8463]

Can't tax income when tariffs make your job unprofitable.

[@markthornton9128]

@@ironcityblue I dress this at length in the podcast episode. Tariffs financing a teenie federal government is indeed preferable to an income tax that can fund an immense Leviathan sized government - - 19th century America.

[@ironcityblue]

@ that's half of the equation. The other half of tarrifs is to increase the costs of cheap foreign labor and to recoup the deep losses of copyright theft from China. From Washington to Jackson to Lincoln the "American system" aimed to incentivize internal production.

[@Oatriumph]

​@@markthornton9128Unless the tariffs help establish the power to then levy an income tax.

[@BlackJesus8463]

American tariffs can and will ruin American jobs. In a race to the bottom when you have to compete with foreign labor they'll take out any profit left.

[@LeonidRosenboim]

Huge miss: reciprocity is the key word of the forthcoming tariff policies. Foreign governments intervention in our exports and imports should not be ignored. The lesser aspect being ignored is the art of the deal - not all announcements are intended to result in corresponding policies on our part, but to influence foreign governments to change theirs.

[@HarrisonCountyStudio]

Free market economy ….with tariffs. Gold standard and the lack of a central power at the FedGov level was a big key to the growth of the American economy.

[@AKeyearea8]

Rather have tariffs than income taxes

[@user-nn6gy4rd3z]

Yes, but the income tax needs to be eliminated before the tariffs are enacted. Otherwise, you are just being double taxed. Unless the income tax is abolished simultaneously, I wouldn't be so enthusiastic about supporting Trump's tariffs.

[@AKeyearea8]

@user-nn6gy4rd3z I agree

[@BlackJesus8463]

You'll have both and like it!

[@Oatriumph]

​@@BlackJesus8463Klaus Schwab has entered the chat...

[@classiclibertarian]

tariffs are a neccesary protection against foreign industrial policy. if there are natural cost advantages to, say, making steel in the great lakes (abundance of all neccesary materials, very cheap shipping via water routes, ample agricultural land to support large populations neccesary to populate the area), then the free market would choose to make steel there over other locations like, say, hawaii or new york city, or wyoming. if another country subsidizes their industry (direct cash payments + overlooking/totally ignoring environmental concerns) like china and they have to naturally import a large stock of their base materials all across the globe and otherwise lack the nearby domestic market to sell the steel (in other words, their industry is a complete artifice designed to obliterate their competitors based on centeal planning), then tariffs by other countries on chinese steel make sense. it accelerates the revealed malinvestment of the chinese government in steel and minimizes damages and capital misallocation in the countries affected (eg. steel mills in the golden horseshoe would remain more profitable and work down sunk costs in plant and equipment)

[@jdaviddiehl]

Mark -- I hear you, but the argument only holds up if borh parties are based on free market economies. If your using it as a protection from "bad actors" (e g. government-subsidized steel from China in the 90s), would that be justified?

[@BlackJesus8463]

You don't have to do your best because other people are bad?

[@Oatriumph]

What if you don't need good steel? Like if you make rakes and hoes? Just don't put Chinese steel in your skyscrapers.

[@matthewmurphy4593]

Doesn't matter. Read The Candlemaker's Petition.

[@classiclibertarian]

it makes perfect sense to enact tariffs on the basis of countering another soverign country's industrial policy (including both subsidies and tariffs, and even monetary manipulation). a simple example: many poor, third world countries simply cannot produce food staples that can compete with US agricultural products. this is in large part due to many subsidies, both direct and indirect, that the US government enacts to ensure that food prices at the grocery store are otherwise cheaper than they should be, and so producers are ensured a minimum profit margin. the us can tax the rest of its very productive economy to do this while other countries can't in general, and certainly not at the scale that the US can. and so poorer countries are justified in tariffing the heavily subsidized us agcriculture sector in order to protect the few job opportunities their local, low productivity farmers actually have. otherwise they are forced into even lower productivity professions in their cities.

[@LeonidRosenboim]

Excellent callout for the overt bias expressed which doesn’t belong in the Austrian school of economics.

[@matthewmurphy4593]

Please go read the Petition of the Candlemakers by Bastiat. If the US is dumb enough to subsidize and give away food, it's enriching those who are on the receiving end. Their people will simply have to adjust production to deal with the new prices it causes. If their economy isn't free, that's going to be hard and that's what they need to fix.

[@JanBruunAndersen]

So poor countries should, through tariffs, raise the price on food stuff, so the poor have to pay more than necessary for their food stuff, making them poor? Makes sense. /s

[@classiclibertarian]

@@JanBruunAndersen yes, glad you understand! artificially lowering food prices creates massive distortionary effects that we see in large parts of the third world today. artificial incentives (foreign government subsidies) that massively distort your domestic patterns of production (eg. agriculture) and encourage malinvestment in some areas (non-agriculture) while discouraging investment in areas that should be invested in (agriculture) is clearly against what a free market would otherwise promote in that country. keeping in mind, also, that labor is heterogenous and not easy to shift between fields/careers, and with no guarantee that rhe new fields/careers are more lucrative or internally fulfilling is another consideration Austrians gloss over. I think we should correct that!

[@LeonidRosenboim]

@ so if you insist, let’s dive into morality - buying cheap stuff from China supports slave labour there. Is that moral?

[@jfausset]

It sounds to me as though the commentary here is deeply tainted by vested interest in foreign trade. If it were unbiased, I think the benefits would’ve been weighed and vetted more thoroughly.

[@BlackJesus8463]

If you have to screw your neighbors to be rich you don't deserve the money. And it's not even real money!

[@Oatriumph]

The benefits of forcing the citizens to act in a certain way because Washington knows more about foreigners than the population?

[@matthewmurphy4593]

No, it's just logic. Read The Candlemaker's Petition.

[@ConfusedAbyssinianCat-oi4fh]

When the tariff is very high it prohibits certain things from being imported.

[@AsaBlaze]

This is a micro explanation of tarrifs. You have to take into consideration the trickle down advantages of replacing other taxes such as employment taxes. People will have more options with their money similiar to a fair tax law. Also the FED caused the great depression not tarrifs.

[@Saratogan]

Tariffs are good in the sense that they are totally voluntary. Don't want to pay the tariff? Don't buy the imported good. Sales taxes are good too. They are voluntary. That's why, if we must have taxes, I personally prefer consumption taxes.

[@user-nn6gy4rd3z]

I would agree that tariffs are less evil than an income tax. However, the income tax needs to be eliminated before the tariffs are enacted. Otherwise, you are just being double taxed. Unless the income tax is abolished simultaneously, I wouldn't be so enthusiastic about supporting Trump's tariffs. Tariffs are not consistent with a free market because the government is forcing the consumer to pay more for a product. You can either pay more for the imported product because of the government imposed tariff, or you can over pay for a domestic product that is made with over priced labor (assuming it is even available). Either way, the government will be forcing the consumer to pay more by enacting tariffs.

[@ForProfit-x100]

All taxes are compulsory.

[@Saratogan]

@@ForProfit-x100 true. But not all taxes are equally evil.

[@BlackJesus8463]

@@Saratogan Socialism is 100% evil.

[@Oatriumph]

​@@Saratogan"Equally evil" is not a functional concept. Evil is not something of degree, and consequences are seen and unseen.

[@johnx983]

Tariffs will most certainly lead to stagflation. If I have to pay 3x for an electric car, I won’t get an electric car. Perhaps they should focus on how impossible it is to run a business in America. All the rent seekers levying taxes and insurance. Never mind the high cost of living. How about all those dam lawyers shaking everyone and everything down for the take? You can get sued for just about anything. Now try running a business and hire employees. Oh, did I mention the insane regulations and employment laws? Fix all that and perhaps we have a chance in hell competing with China. “Bring those jobs back to America” my foot. Those jobs were lost by automation and for a very good reason. To think tariffs will make America competitive to chinas manufacturing is beyond naive. Everything comes from China today because their quality is improving while the costs stay low. American companies rely on protectionism rather than creating value and quality, which is sad.

[@vooteimer1234]

Smart people will pay this new tax to pay for the tax cuts

[@chrislucastheprotestantview]

Lol, tax cuts. 80 million voted for Biden. Then in this election, 80 million voted for Trump who gave away 8 trillion dollars of taxpayers money. There are not enough smart people that tax even matters. Turn on any youtube show but mine, who is even pointing out how ridiculous it is to spend 8 trillion on c@vid19 or anything without first at least doing a cost benefit analysis? It is all broke. Tariffs are a petty thing to worry about considering the mis-spending that is being done at a trillion dollar level

[@user-nn6gy4rd3z]

You should not support tariffs unless the income tax is eliminated first. Otherwise, you will just be double taxed. Unless the income tax is abolished simultaneously, I would not be so enthusiastic about supporting Trump's tariffs. Don't believe any politician who says that they will raise some taxes now in exchange for cutting other taxes in the future.

[@josephsummerhays4650]

Its just plain wrong to claim foreigners "won't pay the tariffs". The exact amount paid by the foreign seller and the domestic buyer is determined by the elastisity of supply and demand. When supply is perfectly elastic (there are many alternatives to this supplier), then the supplier will pay the tax. If supply is inelastic the buyer will pay the tax. That is the correct statement. To claim foreign sellers will never pay the tariff is to claim all supply curves are perfectly inelastic, a ridiculous statement.

[@Oatriumph]

Blah blah blah.

[@lowersaxon]

Wrong, tariffs can be justified under certain circumstances, -> A. Hamilton, F. List (German economist). This is textbook wisdom and is shared by a significant majority of professional economists. Of course, the negligable amount of so called „Austrian“, i.e. ultra liberal, economists disagree here as on almost all fundamentals of economic theory.

[@chuck-wv9nh]

So, if China (or Zilchville Island somewhere.. ) makes everything, what do we do as laborers? What work do we do? How do we earn a living...and don;t say fixing up houses, or service work....because all that is being "insourced" as in the cheap labor is being forced in by open borders democrats and corporatist republicans.. The tech stuff is going the way of the dodo too...basically anything a human does for work is being farmed out to the rest of the world..or farmed in with the massive immigration. Are we supposed to equalize with the rest of the planet in terms of living standards, because that's what it seems like you libertarians or pure free-market guys want. What happens to America? We just get absorbed by a snarling mass of desperate people willing to take any job for any price just to eat? (I got the term "Zilchville" from a guy named Murray Rothbard btw......, in the Founding of the Federal Reserve..... )

[@classiclibertarian]

learn to code!

[@classiclibertarian]

I swear economists don't understand that labor is heterogenous and not perfectly retrainable or interchangeable.

[@chuck-wv9nh]

@@classiclibertarian Sure.... i think ill just fix up houses and learn spanish..

[@Oatriumph]

We don't have a free market here. Probably should start with freedom at home.

[@jasonanthonywilper]

You are absolutely correct - without tarifa your country will turn into detroit - because their is nothing produced except emails, spreadsheets and powerpoint presentations.

[@mbboisvert]

I completely agree with your premise but disagree wholeheartedly with your conclusion. Tariffs are bad, war is bad, taxes are bad. No kidding. But China is already putting tariffs on us. Tariffs in lieu of income taxes would shift some of the tax burden from the American income earner to the American consumer, sure. But the second order effects will be twofold: 1 - to force China to the negotiating take to reduce their tariffs, benefitting Americans. 2 - incentivize American consumers and business to build and consume American, benefitting the people.

[@NiktoPH]

Love you mark ❤

[@richdobbs6595]

Sigh. The problem with just thinking of tariffs as taxes on imported good and not more, is that unlike with most taxes, you are directly dealing with powerful players and the strategies that they take. These ideas where developed prior to investigation of game theory, and don't seem to have been updated to factor in the impact of dealing with largely authoritarian governments, nor the domestic behavior of not investing in insurance against disruptions because folks assume that they will be bailed out by the government when you have a mixed economy.

[@sevenRyeh]

🥂

[@CrudelyMade]

it seems a lot of people just see this as a false dichotomy of "import from china or make it in the usa" where what a tariff of "goodA from china" is really meant to do is incentivize someone other than china to make goodA. it might be the usa, or it might be someone else. the goal can actually be to get a country that isn't as potentially hostile to US interests to make the product does it still raise the cost of the good in the USA? temporarily, certainly. but a product made in mexico instead of china, given a similar factory in both places, can possibly reach similar prices. or maybe india instead of china. the difference is whether a good is tariffed from everywhere, or a specific country. if a tariff targets a country, this is incentive for production to shift to anywhere else in the world. and this can be used to shift the production power away from china. and then the question becomes "is it better for the USA if production is concentrated in china, or more distributed around the world?" and this is a more complicated question than "does it cost a penny more?" because if that penny goes to china, that is different than that penny going to Kenya, or canada or mexico. it's the difference between buying from a business owned by "Mr Potter" in "its a wonderful life" vs buying from a business not owned by mr potter. mr potters interests do not align with the locals, as we see the kind of businesses he creates when given the opportunity. yes, it might be 'cheaper' in the short term to do business with him, but there's more to life than "1 penny richer". just ask the richest man in that town. ;-)

[@mayibuye2908]

He is obviously talking about tariffs from a purely economics point of view, and he is right. The other side of reality is that tariffs can be used as political or geopolitical tools, which is what you are talking about, and you are right too.

[@carolwq]

What if the other country’s low-cost products are the result of slavery or severe exploitation of workers?

[@spacepan]

I love how it sounds like you're saying "terrorists". That's the word you should be using. Nobody can get "confused" if they understand that that's what's being suggested when people support tariffs

[@srb1855]

This was interesting albeit a bit long winded. Regarding your objection to tariffs and endorsement of free trade - don’t you think you are looking at this from a somewhat theoretical point of view. If everyone is playing fairly and according to the rules then I agree with you that free trade is desirable and appropriate. However, if we look at a contemporary issue - battery electric vehicles. We know that the Chinese state subsidizes this sector and enjoys the advantage of mineral resources and processing that is prohibitively expensive in the West. Now the USA and Europe stupidly have imposed quotas and mandates on BEV production by domestic manufacturers that limit the manufacture of ICE vehicles - with the intention of banning them outright. Your position - I think - is that we should ignore all of this and allow China to freely export all their EVs to the US and EU regardless of the consequences to the western manufacturers who are constrained and forced to manufacture a product where they are not competitive. Adding insult to injury, the West has demonized hydrocarbon fuels while China enjoys a situation where 60-70 of their electricity is supplied by coal power plants. And they also have hydro and nuclear as part of their dispatchable energy mix. So all I am saying is that before advocating for a free-trade-for-all, wouldn’t it be better to highlight these inequities and call for all parties to correct these as an enabler/precursor to what you described as free trade? Please let me know if I have it all wrong.

[@spicole2937]

Do u think people are stupid

[@BlackJesus8463]

YUP!!

[@Oatriumph]

In Men in Black, Tommy Lee Jones says it best. A person is intelligent. People are dumb, stupid animals and you know it.

[@drakeeblis]

❤❤❤

[@kmg501]

How am I supposed to bring this to people who are being systemically replaced? Because a lot of those people equate protectionism directly with saving their job. I heard zero offerings here that is going to get those people on board when their job security and future prospects are being given zero consideration.

[@user-nn6gy4rd3z]

Free market capitalism always works better than government central planning. Tariffs are a way for the government to manipulate prices and play favorites. This is government central planning at its worst. When productivity increases and prices drop because of foreign trade, everyone becomes wealthier because they pay less for things. This in turn causes the economy to grow and more jobs to be created in other areas. Yes, some jobs may be lost, but other jobs will be created to replace those. Don't believe the socialist propaganda. We don't need the government to "protect" jobs.

[@Oatriumph]

Suggest freedom is more moral than becoming a dependent?

[@kmg501]

@@Oatriumph How does that logically hold up? If you can't feed and house yourself/family what freedom have you won? My problem with this video is that I don't know how to bring it to any American labor who have been getting screwed out of private sector jobs for decades now. Nothing was offered here to those people. Theories and history is all great and fine right up until you are facing homelessness and hunger.

[@Oatriumph]

@@kmg501 What laborers do you know that ate facing homelessness and hunger? Maybe you do, but that certainly sounds like hyperbole. Suffering I'll bite. But probably not starving. I don't know what to tell you. My father does landscaping and he believes illegal immigrants are stealing his jobs. Even though it's clear that income taxation, sales taxation, health insurance requirements for employers, etc are the real culprits. Increasing the prices of the factors of production via tariffs will make things worse, not better. Now, if the laborers you know are in favored industries, then I guess their votes are bought and paid for. But that's not very honorable, for sure.

[@kmg501]

@@Oatriumph I never claimed that tariffs would make things better, so you are missing my point. I've asked several times, how do I bring an economic argument to people who have been getting screwed for generations from almost every angle. The only thing we have gotten is cheap consumer goods which when compared to broad base productive job loss, wasn't worth it. Thornton et al can talk in economic and historical terms but that is going to fall on deaf ears when people are facing destructive circumstances that is imperiling their present and future. Either come up with something for these people or don't pretend to be surprised when they reject your argument in favor of something that sounds like it stands a chance to work for them. On a related note, look up homelessness. It is on the rise to put it mildly...

[@nunereclipsereborn]

Tariffs can be a positive thing as a negotiating tactic.

[@markthornton9128]

Possibly true, but that could also backfire badly, and it will eventually be almost guaranteed to backfire. It doesn’t represent a winning long-term strategy.

[@seanclark8452]

@@markthornton9128 Doing nothing about exploitive trade policy fails too. Once a trade partner goes down that path you're in a trade war already, the question is whether you preemptively surrender or not. Ideally a compromise is reached after the bluster because protectionist policy is terrible. Unfortunately, tariff bluster only works if it looks like you think they're a good idea - which is really a catch-22 when picking domestic leaders.

[@72dodge340]

@@markthornton9128 Is handing all our manufacturing and security to foreign interests a winning long-term strategy? Sometimes you have to play the long game and play tough. Let's hope it's not already too late.

[@Oatriumph]

So we are now talking about the utility of threats? This country has a lot of learning to do and probably not enough time to do it.

[@silvermoneydude2044]

Trump is an economic ignoramus

[@Oatriumph]

Scarier is all the apologists for him.

[@chuck-wv9nh]

I'm confused by the thought that Im going to listen to this bore.

[@markthornton9128]

Try increase the playback speed! 😂

[@chuck-wv9nh]

@@markthornton9128 That's better.

[@JanBruunAndersen]

What a load of drivel.

[@rezakarampour6286]

Who Rules America ? .kzbin.info/aero/PLnvd7EdJK2hiItqqwuNxFDej3ruqL5nTd