I’m sure you’re right, but he has a radio show, so ANY 2nd thought you can give him, can influence a LOT of people.
Supposedly, he believes in a VERY small govt and very little foreign intervention. So he proposes many good things, but his fear of de-Americanization causes his philosophy of protecting ‘our manufacturing base’. He uses heavy-handed govt regulation of our businesses as another excuse for export/import regulation. lol
A big problem is that a lot of us fail to understand (as I’ve already said before) how deeply ingrained are some belief. People in the '80s really believed that the factories in Detroit were shutting down because the Japanese car makers were “unfair”. They didn’t pause for a minute to consider why their neighbour chose a Honda over a Pontiac. The Big Three were only too happy to blow on the fire and then government stepped in (“pro-market” Reagan).
Right now many persons step into their local Walmart or Winndixie and see aisles and aisles loaded with affordable imported goods: dried pineapple from Thailand, frozen shrimps from Vietnam, t-shirts from Mexico, lighbulbs from China etc. They then hear or read how evil and corrupt the large corporations are, enslaving their own employees and robbing honest Americans of their jobs in order to import dirt cheap foreign goods which give a higher profit. Trade unions, domestic cartels and politicians looking for a quick and easy re-election are only too happy to blow on the fire, asking for “higher trade tariffs”, “aids for our industry” all the way to trade embargoes (usually backed by humanitarian or enviromental reasons) and cash incentives to US industries.
They do not stop for a minute to think why these large chains and, in many cases, “mom and pop” shops decide to sell Chinese goods (which have high transport costs and are saddled with custom duties) instead of domestic products. Are Americans (or Europeans) uncapable to manufacture toothbrushes, combs or brooms? Are all shopkeepers plainly greedy?
The sad true is that it’s less expensive to buy a crate of toothbrushes in Guangzhou, have it shipped right here and pay the import duties than having it manufactured around the corner. Domestic manufacturers simply cannot compete because they are saddled with too many additional costs. But that’s another matter completely.
What I find ridicolous about “national” economists is their recipe for success: instead of lowering domestic production costs, hence making the national products more appealing, not only on the home market, they always ask for “higher tariffs to protect our industries” or even all-out trade embargoes.
But we’ll continue this discussion in another moment.
The protectionists should be thrilled about the declining value of the dollar–buying foreign goods will become more expensive for Americans–but they’d have to have a better understanding of economics to realize this.
Actually, I’ve had the argument of debasing one’s currency to increase exports touted at me many times. It’s part of my official curriculum. Showing figures of falling US dollar values and rising balance of trades deficits doesn’t seem to make people think twice either. I think the issue is twofold: 1) Rising exports are very short-term, as inflation catches up and raises costs of production. 2) The real problem of low exports/high imports is not the currency exchange rate, but a century of over-regulation, such as minimum wages. And until this is addressed, these short term remedies promoting debasing of currencies hurt more people than they help, and quickly bounce back in the form of inflation.
In fact, monetary policy issues related to changing interest rates often encompass the balance of trades as a key component. We are told that the central banks face a very difficult choice of either controlling inflation and destroying our exports, or causing inflation, but helping our exports. Yet another example of a catch-22 situation, and yet nobody seems to ask “Maybe it’s the system at fault here? Maybe we need to change the very essence of our monetary policy? Maybe if we start backing our currency we won’t see inflation? Maybe if we have a limited amount of money, then we won’t have unsustainable credit-fuelled consumption resulting in a bust? Maybe getting rid of the minimum wage and other regulations will make industry profitable again?” Nope, the students sit with their critical thinking skills suspended, accepting what they are told as unquestionable truths. A shame, really.
Hello, I’m rather new to Austrian school theory and am having a bit of trouble forming the bigger picture in regard to health care. I think everyone agrees that health care costs are extremely pricey these days, and though my parents in particular support more regulation and government involvement, I have come to the conclusion that the logic behind the free market approach to health care is much more sound. I have arguments with them about supply and demand and deregulation, but they think I’m crazy for supporting deregulation and the removal of, say, medical school licensing.
In the end, the argument always comes to this point: they argue that because health care is a necessity rather than a want, if there were deregulation, health insurance companies and health providers would be able to milk the consumer for outrageous sums of money, in some cases to the point of financial meltdown. Essentially, their argument is that because most will not choose death or disease over outrageous prices or financial ruin, the laws of supply and demand do not apply to health care. Demand will always be sky high because the alternative to financial distress is even more unappealing.
What is the free market argument against this? I know I’m probably missing something that’s staring me right in the face.
Thanks for the information in advance.
Ask them if food should be provided by government as well. After all, food is also a necessary product for modern living. If they reply that food stamps exist, point out that food stamps merely function as alternate government issued currency to procure a specific, nongovernmentally manufactured good, much as the pseudoprivate health insurance system they criticize does by government mandates both federal, state and local, and why, under their logic, food as a necessary good should not be provided by government but healthcare should.
Being anti-free trade is a form of arrogant nationalism and is a restriction on your freedom. It is a type of political ploy that politicians use to gain votes. What is so fundamentally different about the US trading with China or Japan versus New Jersey trading with Texas?
Many communist countries have tried to be self-sufficient and isolate themselves from the rest of the world. Turned out they had to turn to their neighbors for help. Trade barriers lower consumer choice and forces them to choose products they otherwise wouldn’t have purchased. For decades Detroit have produced cars of all glitz and marginal engineering. “Redesigns” would be nothing more than new sheet metal draped over the same underpinnings. The last few years have been different story, thanks to competition, with some of the most innovative designs coming from the Big Three.
I have difficulty understanding the concept of patriotism. Maybe it something of a personality thing. Is there something that makes citizens of one country feel superior to those living in others? Do citizens feel patriotic because of the love of their government, culture, and/or people? I always felt that people, no matter where they live, value themselves and their families just as much as we value ours.