Well then it doesn't work, right? Here's the thing though, unfair trade practices do exist. If governments want to subsidize my competitor, frankly I could care less if that competitor is Walmart getting a propert tax abatement from a municipality, Amazon getting subsidies from state economic development agencies, Tesla which gets federal favoritism since its customers get tax credits or if you're a foreign company, like say, LG, Samsung, Bombardier, Airbus (name the trade dispute, right?), the result will be the same, I will favor tariffs and consumption taxes over income taxes. I'd prefer not to have either, but taxes are going to happen, right?
Right now there are all KINDS of things that I can make in PA cheaper than China. I used to manufacture things in my workshop in NJ. Steering wheel covers, floor mats.
But under the current circumstances there's no way in hell I would ever CONSIDER investing in manufacturing in a place like Reading, PA or Wilkes-Barre, PA even though I can currently make items cheaper than they can in China.
The Chinese government can't subsidize EVERYTHING, but they can subsidize ANY GIVEN THING. I can't make an investment, put my children's future on the line just to have some government decide that my less efficient competitors deserve to win over me.
And that's no small part about why Trump is President and why the Rust Belt looks like a $#@!ing bomb hit it.
Here's Friedman discussing steel back in the 1980s
@ Minute 1 the audience member asks a question, in that time it was Japan subsidizing its steel industry.
@ 130 Friedman starts to answer
He says, "THAT WILL REDUCE EMPLOYMENT IN THE AMERICAN STEEL INDUSTRY"
So people in steel have their livelihoods destroyed. Its creative destruction. Well, more like its government selected destruction, isn't it?
Friedman makes it sound like the people in the steel industry just walk away and live happily ever after in Walt Disney World.
They do, they DO move on.
Now I believe he misses the incidental effects of investing in skewed markets from the get go. I never invested in Wilkes-Barre at all. I'm in Palm Beach County, FL, making more marginal investments.
But I'm not gonna forget the favoritism showed, in particular, to Amazon and Walmart. Now I'm not in BLM so I am not going to have a riot and burn them to the ground. But I am going to favor an FTC breakup, right? The second I can, I'm gonna stick the shiv in.
Dirigsme begets dirigsme.
And that's how political resentment builds.
If you want to let governments pick winners and subsidize peoples' competitors, you do that enough and you have a legitimacy problem on your hands.
The problem is that its EVERYTHING.
Its cars, steel, aluminum, aircraft, airlines, lumber, paper, tv cartoons even, retail, agriculture, etc etc. Its industries employing tens of millions of Americans whose livelihoods are negatively impacted.
Free trade really is the way to go, no question, but that's a garden that needs to be tended.
Let governments pick winners and you're gonna have a problem on your hands.
Bo-4 (06-30-2020)
Do you believe that individuals should make the majority of economic decisions in this country or that governments should make the majority of economic decisions?
Coming from North Jersey where slowly and surely, the socialist incrementalism amounted to 56% off every dollar I earned in local, state and federal taxation. Yes, Donald Trump was the difference between the government getting a majority of my income and me getting to spend 44% versus me getting to spend 56% and the government getting 44%.
56 me/44 govt, in North Jersey, you know what? I think that is fair.
44 me/56 govt, sorry I will vote for anybody to stop that.
Of course moving to FL cut NJ right out of that equation so its even less than that now.
Gotta know limits.
Peter1469 (06-30-2020)
Thanks for your posts.
So would you say that you're in the top 1%?
Taxes seems to be your hotspot yes??
Or is it dumb social issues and judges???
Deregulation????
OR all four?
Thanks - That'll help me to understand why anyone would even consider the embarrassment of votin' DJT