I am going to spend many hours writing blogs about Trump/MAGA which is probably not good for my health and a waste of time and energy, but I do find many folks asking me things and being the thoughtful guy and excellent economist I am going to share. I am going to provide a daily series of bite sized tidbits about tariffs to start.
Ask a macro economist what the singular most important factor is for a country to achieve and maintain a high standard of living and they will tell you productivity. If you can produce more with less then you will have a higher standard of living. There are many things that help an economy be more productive, from infrastructure to a highly educated work force to rule of law and even the old Protestant work ethic (can I say that without risk of being canceled?). Something that absolutely makes an economy more productive is having to face competition. Its a basic tenant of capitalism--think Adam Smith and animal sprits and creative destruction and all that stuff. If a business (or an entire country) is sheltered from competition what drives them to innovate? Guess what protects businesses (and entire countries economies) from competition? Tariffs. Want to see an economy that is protected from international trade--take a peak at North Korea. When team Trump talks about tariffs being a tool to make America great again--more like make our businesses less competitive by protecting them from global competitors. And that will lower productivity which will slowly but surely eat away our standard of living. Make America Great Again is clearly a great slogan but Tariff man would be more accurate to say Make America More like North Korea. MAMLNK---an ugly word just like tariffs.
No comments:
Post a Comment