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Thread: Ron's argument against Tariffs is sound philosophically, but is it practical?

  1. #1

    Ron's argument against Tariffs is sound philosophically, but is it practical?

    Sometimes I wonder if his stance on the *current* tariffs situation is the libertarian principle which has the biggest hole in it.

    I am not a historian on tariffs, so my insight is limited. But if I contrast today with when the North forced all those tariffs on the South leading up to the Civil War, it seems like two radically different situations.

    The Lincoln tariffs (or whatever they should be called) were a pure play to raise money for the empire, correct? Disgusting, but it had nothing to do with the welfare of the citizens or protecting them from negative effects of other countries. The tariffs were not enacted to fight evil abroad, but to grow evil at home.

    The Trump tariffs are not about the empire, they are about giving American citizens a level playing field. How are we ever supposed to get to free trade when we allow other countries to destroy us? Trump wants zero tariffs, he already offered it to the EU and they balked. Are we supposed to sit back and just pray that China et al will eventually show us mercy and kindness, after all these years/decades?

    Ron talks about the debt and the financial system and how we have to steer it to fail gracefully (i.e. transition away from it while accepting some short-term pain) in order to avoid a long-term catastrophe. Why can't the same be said about today's tariffs? Why can't we deal with some short-term difficulties to correct a diseased trade relationship?

    I assume Ron's argument is about how the trade deficit isn't the problem, it's monetary policy, income tax, regulations, etc. So tariffs are an attempt to suppress a symptom, not eradicate the disease. But the Fed is not going to be shut down, the income tax will not be repealed, and regulations are still killer (despite Trump's/Pruitt's strong efforts).

    This brings me to something Nassim Nicholas Taleb retweeted earlier today. Taleb is a legendary option trader, world-renowned, unequaled probabilist (and polymath), and one of the great thinkers of our time (the best IMO). A self-described "libertarian-localist," he is quite close with Ron, has been on Liberty Report twice, spoke at Ron's media and war conference a few months ago, and dedicated his latest book, Skin in the Game to Dr. Paul. Some of you may know him from his earlier works, perhaps The Black Swan. There is a comic currently being produced by a fan of his on twitter, called The Black Swan Man, which enthusiastically illustrates Taleb's views on risk, math, history. In today's strip, the comic has Eric Schatzker (of Bloomberg) asking Taleb in an interview about Tariff Man.

    https://twitter.com/black_swan_man/s...03202472914945
    [?TWEET?]1070403202472914945[/?TWEET?]

    Now I've never heard Nassim say this exact sentiment personally, but it is 100% in line with his views on globalization, and he did retweet it.

    Taleb, who does not compliment lightly, called Ron "a Roman among Greeks" in his book's tribute to Dr. Paul. But it appears on the issue of present-day tariffs, Ron's standard libertarian philosophy does not account for the risks that accompany trade in the era of globalization.
    Last edited by kona; 12-06-2018 at 01:01 AM. Reason: Trying to embed tweet. Help!



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  3. #2
    Quote Originally Posted by kona View Post
    Sometimes I wonder if his stance on the *current* tariffs situation is the libertarian principle which has the biggest hole in it.

    I am not a historian on tariffs, so my insight is limited. But if I contrast today with when the North forced all those tariffs on the South leading up to the Civil War, it seems like two radically different situations.

    The Lincoln tariffs (or whatever they should be called) were a pure play to raise money for the empire, correct? Disgusting, but it had nothing to do with the welfare of the citizens or protecting them from negative effects of other countries. The tariffs were not enacted to fight evil abroad, but to grow evil at home.

    The Trump tariffs are not about the empire, they are about giving American citizens a level playing field. How are we ever supposed to get to free trade when we allow other countries to destroy us? Trump wants zero tariffs, he already offered it to the EU and they balked. Are we supposed to sit back and just pray that China et al will eventually show us mercy and kindness, after all these years/decades?

    Ron talks about the debt and the financial system and how we have to steer it to fail gracefully (i.e. transition away from it while accepting some short-term pain) in order to avoid a long-term catastrophe. Why can't the same be said about today's tariffs? Why can't we deal with some short-term difficulties to correct a diseased trade relationship?

    I assume Ron's argument is about how the trade deficit isn't the problem, it's monetary policy, income tax, regulations, etc. So tariffs are an attempt to suppress a symptom, not eradicate the disease. But the Fed is not going to be shut down, the income tax will not be repealed, and regulations are still killer (despite Trump's/Pruitt's strong efforts).

    This brings me to something Nassim Nicholas Taleb retweeted earlier today. Taleb is a legendary option trader, world-renowned, unequaled probabilist (and polymath), and one of the great thinkers of our time (the best IMO). A self-described "libertarian-localist," he is quite close with Ron, has been on Liberty Report twice, spoke at Ron's media and war conference a few months ago, and dedicated his latest book, Skin in the Game to Dr. Paul. Some of you may know him from his earlier works, perhaps The Black Swan. There is a comic currently being produced by a fan of his on twitter, called The Black Swan Man, which enthusiastically illustrates Taleb's views on risk, math, history. In today's strip, the comic has Eric Schatzker (of Bloomberg) asking Taleb in an interview about Tariff Man.

    https://twitter.com/black_swan_man/s...03202472914945

    Now I've never heard Nassim say this exact sentiment personally, but it is 100% in line with his views on globalization, and he did retweet it.

    Taleb, who does not compliment lightly, called Ron "a Roman among Greeks" in his book's tribute to Dr. Paul. But it appears on the issue of present-day tariffs, Ron's standard libertarian philosophy does not account for the risks that accompany trade in the era of globalization.
    Here is how to embed a tweet:

    1st post the full link for those of us who can't see tweets on this site: https://twitter.com/black_swan_man/s...03202472914945

    2nd copy the number at the end: 1070403202472914945

    3rd press the small blue t button and generate a pair of tweet boxes: [?TWEET?][/?TWEET?] ("?s" added)

    4th paste the number between the boxes:
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  4. #3
    It is actually "free" trade with countries that subsidize their industries or utilize slave labor that masks a symptom, the frog never jumps out of the pot because he doesn't realize how much wealth has been stolen from him because he can buy cheap Chinese junk with his devalued money.
    Tariffs do a rough job of restoring natural market conditions without the effect of foreign government meddling so that people can not only compete in the marketplace and rebuild wealth but also understand how much they have been robbed to pay for wars, welfare and oligarchical plunder.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  5. #4
    How to Look at Tariffs
    By Murray N. Rothbard
    Mises.org

    The best way to look at tariffs or import quotas or other protectionist restraints is to forget about political boundaries.

    Political boundaries of nations may be important for other reasons, but they have no economic meaning whatever. Suppose, for example, that each state of the United States were a separate nation. Then we would hear a lot of protectionist bellyaching that we are now fortunately spared. Think of the howls by inefficient, high-priced New York or Rhode Island textile manufacturers who would then be complaining about the “unfair,” “cheap labor” competition from various low-type “foreigners” from Tennessee or North Carolina, or vice versa. Fortunately, the absurdity of worrying about the balance of payments is made evident by focusing on interstate trade. For nobody worries about the balance of payments between New York and New Jersey, or, for that matter, between Manhattan and Brooklyn, because there are no customs officials recording such trade and such balances.

    If we think about it, it is clear that a call by New York firms for a tariff against North Carolina is a pure ripoff of New York (as well as North Carolina) consumers, a naked grab for coerced special privilege by inefficient business firms. If the 50 states were separate nations, the protectionists would then be able to use the trappings of patriotism, and distrust of foreigners, to camouflage and get away with their looting the consumers of their own region.
    Fortunately, interstate tariffs are unconstitutional. But even with this clear barrier, and even without being able to wrap themselves in the cloak of nationalism, protectionists have been able to impose interstate tariffs in another guise. Part of the drive for continuing increases in the federal minimum wage law is to impose a protectionist device against lower-wage, lower-labor-cost competition from North Carolina and other southern states against their New England and New York competitors.

    During the 1966 Congressional battle over a higher federal minimum wage, for example, the late Senator Jacob Javits (R,NY) freely admitted that one of his main reasons for supporting the bill was to cripple the southern competitors of New York textile firms. Since southern wages are generally lower than in the north, the business firms (and the workers struck by unemployment) hardest hit by an increased minimum wage will be located in the south.

    Another way in which interstate trade restrictions have been imposed has been in the fashionable name of “safety.” Government-organized state milk cartels in New York, for example, have prevented importation of milk from nearby New Jersey under the patently spurious grounds that the trip across the Hudson would render New Jersey milk “unsafe.” If tariffs and restraints on trade are good for a country, then why not indeed for a state or region? The principle is precisely the same. In America’s first great depression, the Panic of 1819, Detroit was a tiny frontier town of only a few hundred people. Yet protectionist cries arose-fortunately not fulfilled-to prohibit all “imports” from outside of Detroit, and citizens were exhorted to “buy only Detroit.” If this nonsense had been put into effect, general starvation and death would have ended all other economic problems for Detroiters.

    So why not restrict and even prohibit trade, i.e. “imports,” into a city, or a neighborhood, or even on a block, or, to boil it down to its logical conclusion, to one family? Why shouldn’t the Jones family issue a decree that from now on, no member of the family can buy any goods or services produced outside the family house? Starvation would quickly wipe out this ludicrous drive for self-sufficiency.

    And yet we must realize that this absurdity is inherent in the logic of protectionism. Standard protectionism is just as preposterous, but the rhetoric of nationalism and national boundaries has been able to obscure this vital fact.

    The upshot is that protectionism is not only nonsense, but dangerous nonsense, destructive of all economic prosperity. We are not, if we were ever, a world of self-sufficient farmers. The market economy is one vast latticework throughout the world, in which each individual, each region, each country, produces what he or it is best at, most relatively efficient in, and exchanges that product for the goods and services of others. Without the division of labor and the trade based upon that division, the entire world would starve. Coerced restraints on trade-such as protectionism-cripple, hobble, and destroy trade, the source of life and prosperity. Protectionism is simply a plea that consumers, as well as general prosperity, be hurt so as to confer permanent special privilege upon groups of inefficient producers, at the expense of competent firms and of consumers. But it is a peculiarly destructive kind of bailout, because it permanently shackles trade under the cloak of patriotism.
    Excerpted from Protectionism and the Destruction of Prosperity.

    Murray N. Rothbard (1926–1995) was dean of the Austrian School, founder of modern libertarianism, and academic vice president of the Mises Institute.
    There is no spoon.

  6. #5
    Political boundaries of nations may be important for other reasons, but they have no economic meaning whatever.
    That is absolute nonsense and it makes everything else that follows nonsense.

    They do have economic meaning because the economics of the different nations are different due to the actions of the governments that control them.
    Last edited by Swordsmyth; 12-06-2018 at 03:02 AM.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  7. #6
    Trade within the US is different from external Trade because the Constitution and Federal law (whether it should or not) create a minimally level playing field.

    In spite of that the enforced free trade between states was one of the worst features of the Constitution, the states should have been free to impose tariffs within limits set by the Constitution.

    The war of Northern aggression and many other ills were the result of the economic domination that is allowed by the enforced free trade within the US.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  8. #7
    So why not restrict and even prohibit trade, i.e. “imports,” into a city, or a neighborhood, or even on a block, or, to boil it down to its logical conclusion, to one family? Why shouldn’t the Jones family issue a decree that from now on, no member of the family can buy any goods or services produced outside the family house? Starvation would quickly wipe out this ludicrous drive for self-sufficiency.
    There is an ideal range of territorial size where people can live under the same government and rules and that is also the size where it is best to have internal free trade because everyone is playing by the same rules, if the government unit is larger the citizens will not get along under the same rules and the unit will experience civil war or secession, if the unit is too small then it will suffer economically because its trade is too restricted, if the free trade is extended beyond the boundaries of the unit then economic warfare will ensue even if only by accident as the different rules give one domain advantage over the other.

    Economic warfare not only can directly destroy a nation but it can also hobble its ability to defend itself against conquest or seduce its people into socialism and a welfare state.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  9. #8
    Low tariffs are a good thing as a general rule but not if the rest of the world isn't playing fair and the only way to convince them to play fair is to tariff their goods.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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  11. #9
    Quote Originally Posted by Swordsmyth View Post
    Low tariffs are a good thing as a general rule but not if the rest of the world isn't playing fair and the only way to convince them to play fair is to tariff their goods.
    Yes, if other countries are screwing over its own people with tariffs, the fair thing for any country to do is to also screw over its own people with tariffs. Just to be fair
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Rand Paul (Vice Pres) 2016!!!!

  12. #10
    Quote Originally Posted by TheTexan View Post
    Yes, if other countries are screwing over its own people with tariffs, the fair thing for any country to do is to also screw over its own people with tariffs. Just to be fair
    They use tariffs and subsidies etc. to destroy our economy, they may damage themselves as well but we will be destroyed if we allow them to get away with it.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  13. #11
    Quote Originally Posted by Swordsmyth View Post
    They use tariffs and subsidies etc. to destroy our economy, they may damage themselves as well but we will be destroyed if we allow them to get away with it.
    Yes, having access to cheap electronics and other manufactured goods is a terrible thing. Because they weren't made in America!
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Rand Paul (Vice Pres) 2016!!!!

  14. #12
    Quote Originally Posted by TheTexan View Post
    Yes, having access to cheap electronics and other manufactured goods is a terrible thing. Because they weren't made in America!
    What does welfare do to the ghetto?

    Something for little or nothing is the bait in almost every con game, it never goes well for the sucker.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  15. #13
    Quote Originally Posted by Swordsmyth View Post
    What does welfare do to the ghetto?
    Are you calling America a ghetto? -rep
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Rand Paul (Vice Pres) 2016!!!!

  16. #14
    Quote Originally Posted by TheTexan View Post
    Are you calling America a ghetto? -rep
    China and the globalists are trying to turn it into one.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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