Wednesday, June 20, 2018

Protectionism Without Tariffs and Trade Wars? Easy-Peasy

Looks like Trump's asinine trade war (not just with China, but also our own allies as well) has now begun in earnest.  And that does not bode well at all for our economy OR theirs, since no one really wins a trade war.  Smoot and Hawley must both be spinning in their graves right now, as any history buff will note.

You may remember that one of our previous posts outlines the TSAP's rather nuanced position on tariffs and trade, but we should also elaborate more on how it is possible to have an intelligent and rational kind of protectionism that does NOT depend on tariffs, quotas, or any other beggar-thy-neighbor policies.  For example, since our federal government is Monetarily Sovereign, they can easily afford to do the following to actually protect important domestic industries, as the ever-insightful Rodger Malcolm Mitchell notes:

  • Federal government purchases from domestic suppliers, even at higher than import prices.
  • Federal tax breaks for selected industries
  • Direct federal cash infusions (i.e. direct subsidies) to the selected companies.
And that is true because, as he also notes, a Monetarily Sovereign government like ours literally has the unlimited ability to create and spend its own sovereign currency.  All federal government spending, without exception, involves the ad hoc creation of brand new dollars every time, arcane and archaic rules notwithstanding.  No need to bring the proverbial coals (i.e. tax/tariff dollars) to Newcastle only to effectively destroy them.  And unlike tariffs and quotas, these measures result in a positive-sum game rather than a zero or negative-sum game. 

Of course, all of these things are proverbial carrots, so what about the sticks, you ask?  Even then, most tariffs (and quotas) are far too blunt an instrument, are prone to backfiring, and should be narrowly tailored and used only as a last resort (i.e. to enforce specific trade and other agreements that are being blatantly flouted, and/or for strictly Pigouvian reasons), if even at all.  If outsourcing/offshoring of American jobs is the real concern, it would be far better to start by closing the ludicrous loopholes in the corporate tax code that encourage outsourcing/offshoring of such jobs in the first place.  The latter tactic is the basis for Bernie Sanders' Outsourcing Prevention Act, which would also end or claw back subsidies for American corporations that send jobs overseas.  And his other big idea, the Rebuild America Act, would create additional jobs rebuilding America's obsolete, neglected, and/or crumbling infrastructure as well.  

Note that Trump had clearly stolen, bastardized, and ran with several of Bernie's ideas while combining it all with empty rhetoric and beggar-thy-neighbor policies.  That is, when Trump's ideas are anything even close to coherent, as opposed to the usual incoherent verbal defecation that he is famous for.

But make no mistake.  Our nation's once-great manufacturing base has been hollowed out for decades, and much of it is currently rotting and rusting thanks to the neoliberal "free trade" scam brought to us by Reagan (and Thatcher in the UK) and embraced by both corporate parties ever since.  We ignore it at our own peril.  And the genuine political left would truly do well to abandon this highly toxic and corrosive ideology yesterday.

Monday, June 18, 2018

We Condemn Trump's Deplorable Immigration Policy

We at the True Spirit of America Party hereby wholeheartedly condemn the Trump administration's ruthless, cowardly, and deplorable immigration policy.   It started out bad enough with senseless raids against non-criminal and non-violent undocumented immigrants.  But in recent weeks, things took an even darker turn.  The administration's is literally separating undocumented children (including infants and toddlers!) from their parents (which easily qualifies as torture) as a cowardly and cynical ploy to gain "leverage" over both the immigrants themselves as well as the administration's political opponents.  And even caging them in prison-like conditions on top of that while they await their questionable fate.  Seriously, how absolutely low can one get?

And for those who say that it's "not so bad" or "it could be a lot worse", we say, compared to what, exactly?  Nazi Germany?  Soviet Russia?  Because that is, quite frankly, a pitifully low bar to clear.  And it is worth noting that, not even during the internment of Japanese Americans during WWII (as deplorable as it was) were children separated from their parents.

Future generations will ask everyone who was around when this happened, "what did you know, when did you know it, and what did you do about it?" And you should hope that you can honestly say that you actually had the intestinal fortitude to do the right thing and wholeheartedly opposed such evil and despicable acts that blatantly contravene international law and all that is decent in this world.

UPDATE:  On June 20, Trump finally bowed to increasing public outrage and pressure and signed an executive order halting the deplorable practice of ICE agents separating families at the border.  But the damage is basically done already, and the rest of Trump's current immigration policy still leaves a lot to be desired overall.  And as of August, most of the separated children have still not yet been reunited with their parents even two months later.