XPost: alt.politics.republicans, alt.politics.trump, alt.fan.rush-limbaugh   
   XPost: sac.politics, talk.politics.guns   
   From: yourdime@outlook.com   
      
   Last week marked a key checkpoint in the restructuring of global trade   
   that President Trump initiated on “Liberation Day” back in April. Friday,   
   August 1, was the drop-dead deadline for countries facing reciprocal   
   tariffs to reach agreements with the United States and many did so, most   
   notably Japan and the European Union. As a report from the Center for   
   Strategic and International Studies (CSIS) described:   
      
   The shape of these agreements provides insight into administration   
   objectives and distinguishes this approach from previous trade policy   
   frameworks. The policy structure includes four primary components: (1)   
   uniform and significant tariff rates across most products for each   
   partner—with China as a notable exception and details still emerging for   
   the European Union; (2) retention of higher tariffs on smaller set of   
   strategic industries—including steel and aluminum; (3) acceptance of   
   investment and purchase commitments rather than requiring reciprocal   
   tariff reductions; and perhaps most importantly (4) achieving this   
   significant restructuring of U.S. tariff rates without triggering   
   widespread retaliation from trading partners.   
      
   It would be hard to overstate how much better this outcome is for the   
   United States than was predicted by economists, who have spent the last   
   four months screaming about the irrationality, futility, and disaster of   
   the entire project. As Jason Furman, chair of President Obama’s Council of   
   Economic Advisers, acknowledged in the New York Times, “economists,   
   including me, suffer from tariff derangement syndrome. We find ourselves   
   disproportionately worked up every time they are increased.”   
      
   But tariff rates last seen 100 years ago have not crashed the stock   
   market, sent prices skyrocketing and employment plummeting, or triggered   
   costly trade wars. To the contrary, the stock market is at an all-time   
   high. The consumer price index rose more slowly in the first half of 2025   
   than in the first half of 2024. The unemployment rate is unchanged. And   
   crucially, as CSIS notes, the retaliation never happened. The lack of   
   retaliation by trading partners is so important because, without it, even   
   conventional economic models confirm that tariffs can reduce trade   
   deficits and enhance welfare.   
      
   “When the facts change,” said John Maynard Keynes, “I change my mind. What   
   do you do, sir?” Perhaps not unrelatedly, later in his career, Keynes   
   abandoned his own antipathy toward tariffs and acknowledged their   
   sensibility. “Thus, the weight of my criticism is directed against the   
   inadequacy of the theoretical foundations of the laissez-faire doctrine   
   upon which I was brought up and which for many years I taught—against the   
   notion that the rate of interest and the volume of investment are self-   
   adjusting at the optimum level, so that preoccupation with the balance of   
   trade is a waste of time,” he wrote in his General Theory of Employment,   
   Interest and Money. “For we, the faculty of economists, prove to have been   
   guilty of presumptuous error in treating as a puerile obsession what for   
   centuries has been a prime object of practical statecraft.”   
      
   But if you are waiting for a chorus of refreshed analyses, rethinks, and   
   mea culpas, well… you will be waiting a long time. Instead, the commentary   
   is mostly just repetition of the same old talking points. The New York   
   Times published a long analysis of whether “trade barriers will revive   
   factories and close income gaps,” concluding the answer is “no” because…   
   prices of imported goods might rise. Which, I mean, yes, that’s true, but   
   the question is whether that’s a tradeoff worth making for revived   
   factories and closed income gaps. Mike Lind wrote a wonderful essay for   
   American Compass on this point, “So What If Tariffs Are Taxes?”, in which   
   he argued:   
      
   The regressivity of this or that specific tax—or even of the tax system as   
   a whole—is irrelevant as long as workers share equitably in the gains from   
   a growing economy and as long as the necessary functions of government are   
   adequately funded. Moreover, while creating “losers” by deregulating   
   product and labor markets is easy, raising taxes on the “winners” to fund   
   higher government spending on the “losers” is politically perilous. And   
   even when it succeeds, such transfer payments prove to be poor substitutes   
   for family-supporting paychecks. If reducing inequality is the objective,   
   the priority should be raising pre-tax wages, not after-tax subsidies. And   
   the best way to raise wages is to boost the power of workers to bargain   
   with employers, individually or collectively, so they can share more of   
   the profits of firms with managers and shareholders in an economy that is   
   growing, in part thanks to the industrial policy that well-designed   
   tariffs can support. Whether the tax code that best achieves that result   
   is a “progressive” one is rather beside the point.   
      
   But the best (worst?) piece comes from Fareed Zakaria at the Washington   
   Post, who we last saw at Understanding America in “Fareed Zakaria Has No   
   Idea What He’s Talking About.” Well he’s back, with a lament that “Trump’s   
   Tariffs Are Undermining the Peaceful, Prosperous World Order.”   
      
   What’s most remarkable about the column is its grounding in a strange,   
   fictional world where the international trading system is characterized by   
   free markets, released from government distortion, promoting competition   
   and efficient outcomes. In Zakaria’s imagination, “we were living in a   
   free-trade world” in which “countries have been moving away from arbitrary   
   government involvement and interference in global markets.” Whereas,   
   “throughout history, governments have manipulated trade, producing massive   
   distortions and creating domestic champions,” the United States had   
   “pushed back against those tendencies, demonstrating by its success that   
   it had chosen a better path. American technology companies have come to   
   dominate the world, learning from and besting market leaders such as   
   Japan’s Sony and the Netherlands’ Philips in the 1980s and 1990s due in   
   large part to a fiercely competitive global market.”   
      
   On Planet Earth, meanwhile, global industrial markets are dominated   
   exactly by domestic champions created through government manipulation and   
   distortion—from aerospace (Airbus) to semiconductors (Taiwan Semiconductor   
   Manufacturing Co.) to communications equipment (Huawei) to the   
   manufacturers of smartphones (“designed” in California but sure-as-heck   
   not made there), to EVs and batteries, to solar panels, to…   
      
   https://floppingaces.net/most-wanted/trumps-tariff-timebomb-just-went-off-   
   and-the-experts-were-dead-wrong/   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)