January 2017 Archives

A New Tariff in Town? Not a Bad Idea

| | Comments (0) | TrackBacks (0)
Recently, opponents of President Trump's plan to construct a wall along the Mexican border and finance its construction with a protective tariff on Mexican imports have voiced a concern that this tariff will lead to increases in the prices of automobiles, groceries, and many other necessary goods. However, in their haste to criticize these proposals, they have overlooked several facts that make both the wall and the import tax a national imperative.

First, the argument that tariffs will raise the cost of living in America is based on the specious assumption that our manufacturing and agricultural requirements will continue to be outsourced at the same rate after these plans go into effect. This exhibits a fundamental misunderstanding of the purpose and practical impact of protectionist measures. Clearly, the border tax is designed not to penalize U.S. consumers but to reverse the rapid attrition of the national labor market. Furthermore, the slowing of international trade may actually reduce the cost of many food items, since domestic farmers will easily be able to meet our consumers' needs and American purchasers will no longer have to compete with Chinese and Mexican wholesalers willing to buy up U.S.-grown grain at exorbitant rates. The return of well-paying manufacturing jobs will also increase the availability of basic necessities by restoring employment to pre-NAFTA levels and creating real career paths for Americans currently stuck in the service sector due to the paucity of domestic jobs. For all of these reasons, the imposition of protective tariffs will boost the national economy.

Additionally, those criticizing these plans on the grounds that they are allegedly inimical to our democratic ideals are ignoring one of our most important national values: self-reliance and the willingness to prioritize our common interests over the convenience of luxury imports. Leading up to the American Revolution, our ancestors were prepared to sacrifice their own comfort as consumers in order to further the cause of our independence by boycotting British-made goods and products subject to arbitrary taxation. Nearly two and a half centuries later, it is hard to believe that our citizens have not inherited their devotion along with their achievements; that during the short period of economic transition that will follow the implementation of these proposals, we will not gladly invest in our collective prosperity and accept any temporary inconveniences caused by the preservation of American jobs.
The change has happened slowly, but its effects are visible everywhere. The economic rebound our country is supposedly experiencing no longer carries with it the promise of prosperity for anyone willing to work; prices of everyday items are rising as salaries remain stagnant; upward mobility is severely limited by the scarcity of jobs; and the very existence of the middle class is threatened. Last night's 20/20 broadcast "My Reality: A Hidden America" examined the growing problem of income disparity by following the lives of several working-class individuals and families, and posited that a $12 or $15 minimum wage would help solve these problems. However, though this may temporarily ameliorate the desperate conditions faced by many workers, it does nothing to address the underlying flaws in our national policy that allowed this climate to develop.

Two interlinked forces have shaped the modern economy to the greatest degree. Untrammeled consolidation and collusion between corporations has artificially raised the cost of living and reduced the number of available positions; while injurious trade deals such as NAFTA have outsourced the remaining opportunities to foreign factories and rendered the traditional image of middle-class careers - manufacturing jobs paying enough for employees to purchase a home and support a family - obsolescent.

The reduction in the number of open jobs affects employees in two ways. Firstly, it lowers salaries outright by increasing the number of willing candidates for even the least desirable positions, and denying applicants the opportunity to work for a rival company that was either transferred overseas, acquired entirely, or driven out of business by these national trends of monopolization and outright exodus. Secondly, in the absence of free competition, the emerging conglomerate has almost complete control over the prices of its products, decreasing the purchasing power of already meager wages.

While these conditions exist, statutory increases in the minimum wage will fail to materially better our current predicament. First, drastic inflation will quickly ensue as noncompetitive industries remain the same, but the prices consumers will pay for their products rise; second, small enterprises with modest profits bear most of the burden but only receive a disproportionately small amount of the additional commerce produced by workers' augmented earnings; third, as long as tariffs on imports from Asia remain relatively low and trade with Mexico remains free, far more jobs will be created south of the border for $3.88 a day than here at home for $15 an hour. If our antitrust laws are enforced and protective tariffs are established, natural competition will raise wages and lower prices until our past prosperity begins to reemerge; but artificial salary hikes create as many problems as they solve.

About this Archive

This page is an archive of entries from January 2017 listed from newest to oldest.

December 2016 is the previous archive.

February 2017 is the next archive.

Find recent content on the main index or look in the archives to find all content.