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For this (very) rare Sunday Ricochet Podcast, we’ve assembled our original cast as Rob Long, Peter Robinson, and James Lileks gather ’round their respective audio capture devices to chat about current events. Also stopping by, That Sethany Show hosts Seth and Bethany Mandel (the latter is of course also a Ricochet Editor and a member of The LadyBrains Podcast). Guns and due process, trade tariffs, kids and politics, the Oscars are all on the docket in this wide ranging conversation. Listen in!
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Bethany said: “Fear for the future of humanity that these are the people that are breeding.” LOL funny, initially, but actually that is pretty serious.
An analogy to oil production should be considered. The ability to produce oil in the U.S. has given significant foreign policy benefits, such as freedom from Saudi and Russian interests. Steel from Canada is initially produced in China, and China is compelled to over-produce to keep state-sponsored industries alive. U. S. . steel and aluminum production is almost gone, so to work toward independence from Chinese production in another key area the steel industry requires support. Even if nominal allies provide steel you could still see benefits that would mirror our current oil situation, if we are not fully reliant on others for steel. I’m certain other nations have propagandized against tracking in order to minimize U.S. oil production, so I expect the same.to hold as to steel production.
If you want to understand free trade, how it affects “the deplorables”, and the proper policy prescriptions, listen to to David Stockman interviews on the Tom Woods Show and Contra Krugman around 9/16. That’s how the GOP can get some permanent political leverage and actually help their fellow man.
@RobLong says , “a moderate democrat, a normal one”. Hmmm, not too many of those in the media or politics these days. Am I wrong?
Seth and Bethany Mandel are yet another smart and conservative young couple on Ricochet in the long tradition of Mollie and Mark Hemingway. However, I don’t think that the “Sethany” couple moniker captures the legacy of Ricochet spouse teams or the very cool fact that they have 3 young kids and keep Kosher. How about “The Chemingways”
(PS Yiddish is hard to fake spell)
Gee, Peter, how exactly did China become such a threat to the US in so short a time? The Chinese did not practice reciprocal free trade and actually thought Milton Friedman was crazy when he visited that country.
Now, Peter, I seem to recall that we gave China “Most Favored Nation” status in trade and easy access to our market. I also understand that our subsequent huge trade deficits with China fully fund Chinese defense expenditures and military expansion, which now worry you so much.
So did protectionist policies fuel China’s economic rise?
Did our free trade policies feed the growth of a rival superpower which now threatens us, rather than making us more secure?
Explain to me again the benefits of free trade.
No one understands this, and I’m not going to explain it here, but China got all of these jobs and this business business way faster than they should have because of Western Central bank easy money since about 1996.
Welcome back, Rob!
And it was nice to hear Peter talking about Trump the way he did. And that he thought his trade policies were awful. I really began to think that Peter just would stand up for the President no matter what. Glad I was wrong!
* in past eras, such technology was held as state secrets because of the ready translation into manufacture of weapons of war. Did not the Clinton Administration give permission to transfer missile technology to China so that they could successfully launch satellites for American companies, whic directly led to their ability to drop nuclear warheads across our whole nation instead of NORK-like only the West coast?
**Jordan Peterson often says something to the effect: the question isn’t why some people become addicted to drugs, but why everyone isn’t using them all the time? – given how they work on our brains.
– continued
3. I do not know what @roblong is talking about with the idea that a handful of big companies and trade unions were what industrialized America was like. In fact, what I know from direct knowledge is that the Midwest was full of small towns and cities – populations 5k-50k – that were full of small factories that each employed from a few dozens to a few thousands up into the late-90s when outsourcing started to get going. Those little factories produced a large portion of everything we bought and used. My home town of 10k had at least a dozen such factories stamping out baking pans, making electrical devices, machining parts that went into cars, trucks, & airplanes. The giant electrical manufacture for which I work has moved production from about a dozen Midwestern and Southeastern cities to Mexico since 1999 because of marginal improvements in the cost of production. That’s all it takes – a few % improvement – because everyone who makes real things is under constant pressure to improve the contribution margin a little bit each year for every product they manage. It doesn’t take 50% or 100% tariffs (such as the politically powerful Ag Sector still has enforced to this day) to tip the balance in favor of production in the US. The reduction of the corporate tax rate should help tip the balance in some cases. Playing with some tariffs could help in others.
John Cornyn’s statement against the steel/Al tariffs noted his concern that countries could slap tariffs on our Ag Sector. Yes, exactly, the Ag Sector is ever favored while manufacturing is treated as expendable – in the long run, this seems like a way for a civilization to commit suicide when some form of a major war eventually comes again.
If we had this free trade orthodoxy in the Reagan Administration would the Japanese auto makers have built all the assembly plants and supporting parts suppliers in the US or just shipped 100% Japanese-built cars with no fear of tariffs? This ideology is ahistorical – about 1/3 of federal tax revenue before the imposition of the income tax was from tariffs; freetrade-ism has become as rigid as socialism in focusing on the theory and ignoring the real world consequences that manifest themselves when the theory comes into contact with real people, institutions, and competitor nation states.
I do not favor these product/sector-focused retaliatory or protectionist tariffs. They are subject to abuse/graft/rent-seeking and allow protected industries to stagnate while taking advantage of consumers. I recognize that those are excellent reasons to have completely free trade. However, something of a uniform tax on imports has the advantage of balancing the incentives/interest groups for having high and low import tax levels.
Some level of import tax would be advantageous to incentivize domestic employment without re-creating the worst of the 70’s Detroit.
Might we abolish monopoly Wagner Act trade unions AND public sector unionism, too??
Actually I think analogizing to the oil industry is exactly wrong. The logic behind increasing domestic production stems from political volatility in oil producing states combined with a fear of limited territorial oil reserves. There was a fear that OPEC could continue to decrease supply this raising the price artificially. But that ended badly for OPEC as we easily ramped up domestic oil production.
But at least with oil, there was a fear about placement of physical reserves (incorrect as it turns out.) No such fear exists with steel. We already produce 70% of our steel consumption. Even if that were to decline it hardly can be counted as a strategic threat. Let the Chinese fritter away their money selling us cheap steel. That only helps our manufacturing and construction industries giving us more money to spend on defense should we wish. It’s both idiotic and corrupt to implement the trade barriers as proposed.
Our political system, government and economy is based on never-ending inflation and (more or less) asset bubbles. It quit working after NAFTA, China opening up, and robots. The global cost of labor etc. is lower than here. The “deplorables” take it in the shorts.
We need less central bank activism and government created cartels or anything that government gets in the way of the price going down. Human progress is “better living through purchasing power” not government. Especially, now.
Welcome back Rob!
Heh. I enjoyed how James Lileks worked in a Heinlein reference–the secret “call and response” pass-phrases used by members of the long-lived Howard Families to identify each other–to celibate Rob Long’s return to the podcast. Thus our segway master is ever so.
Donald Trump is not “in their faces”. He’s living rent-free in their heads.
Do you know what’s also idiotic and corrupt?
If we can survive useless and expensive doctors, powerful predatory lawyers, deadbeat teachers and corporations that lobby the government for special favors, we can survive more expensive steel.
Another Hendrix (properly spelled no less) who reads R. A Heinlein?! Gotta be long lost cousins or something.
Hi Joseph,
I tried to find an argument within your comment and came up empty handed. But I have a few questions for you and maybe they will help flesh out how you disagree with my reaction.
First, I’m unclear how primary care doctors are both idiotic and corrupt. I rather like mine and the doctor who cares for my daughters is brilliant and charges reasonable fees.
On to lawyers. Everyone hates them until they need one. But hey, I’m biased there. Still, not sure how that relates to analogizing steel tariffs to oil production so do explain. Ditto for public sector unions.
So “corporate welfare” I’m guessing is a good thing? I’m against it as was fairly obvious by my comment but I’m happy to hear why you are in favor of it.
I’m equally confused by your “government procurement” note. It’s good? Bad? Mixed?
I’ll end with this. Please explain why the existence of idiocy and corruption elsewhere justifies taking further idiotic and corrupt action.
Keep ’em rolling!
If we can tolerate rent-seeking for doctors (much of what primary care doctors do can be done by nurse practitioners), trial lawyers, public teachers (who educate our kids!) and lobbying by corporations, why can’t we tolerate rent-seeking by steel workers?
There’s a huge amount of rent seeking in our society. Why are doctors allowed to hijack public policy to boost their wages at the expense of consumers? They’re incredibly successful at using the political system to keep the supply of doctors at a nice, low level. Or take lawyers: Americans sue each other over the most absurd things, often enabled by legislation lobbied for by lawyers.
I fail to see how steel tariffs are any different.
At 15:10 @jameslileks used the word “ikkar.”
Joseph is is right. The problem is it’s all bad. People want their cut of the statist Keynesian stupidity. Now we are getting Trump good and hard. When are we going to wake up?
Trump is s symptom of a bad economic and political system. Why ask people to “behave better” and listen to Ben Sasse? It’s a waste of time. It started 25 years ago at least. We literally have to get rid of all cartels that jack up the price of everything. The virtuous anti-Trump RINOs just want to get rid of some of them. The price of globalized labor and land is just too cheap compared to the USA. The Fed has to stop with the supposedly benign 2% inflation, too.
I’m not saying any of this is easy; I’m just saying it’s reality.
#DavidStockmanIsGod
Cartels + Central bank inflation + globalized labor and robots = We get Trump good and hard.
Here @peterrobinson is in very good company with Adam Smith and many others. The Wealth of Nations is a long read, but full of examples which I sum up as “Free trade benefits every nation which practices it, even if its trading partners do not.”
As for the short term pain of many individuals, Smith is aware of it and gives this caution in the case of returning to free trade:
“Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home-market as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable. It would in all probability, however, be much less than is commonly imagined.”
Alan Greenspan sent jobs to China in fast gradations. What we got in return was purchasing power and a housing bubble. And Chinese power and belligerency. (It’s a freaking kleptocracy, BTW. Swell.)
So the deplorables swallow opioids with their SSI lawyer and vote for Trump.
#MAGA
You’re certainly right about rent seeking. Though I’m less sure that steel tariffs are indistinguishable from the professional cartels you mentioned. And you seem to indicate these behaviors have detrimental economic and social impacts. So let’s say there is no difference between steel tariffs and other rent seeking behavior. That is a pretty bad argument in favor of permitting more rent seeking. Or are you saying rent seeking is good and more interest groups should get in the game?
The anti-Trump RINOs or whatever you want to call them need to understand this dynamic better. The days are over when you could just say “trade is good” without looking at the whole system very, very critically.
This is a really bad deal. People have no idea.
Rather than tariffs, what we need to do is go back to a pre-Fed deflationary economy. 99% have no idea what I’m talking about or they think it’s insane.